When times are a bit tougher, we still have the memories of the terrific times everyone could experience in the past. One of my best moments? Being a volunteer at Singapore 2010 Youth Olympic Games. What a collection of memories……
When times are a bit tougher, we still have the memories of the terrific times everyone could experience in the past. One of my best moments? Being a volunteer at Singapore 2010 Youth Olympic Games. What a collection of memories……
Whenever I entered the management team meeting at MyBank, I had my state-of-the-art PowerPoint pitch showing the performance of each department and its core processes as part of our dashboard. Every month, we got the latest underlying data together, aggregated them and displayed an overall dashboard of how the business was doing. With that, we had a clear Line-of-Sight.…
“Why do we need a Competency Profiling? We have SOPs. That should be enough” was one of the statements I heard from a colleague. Here is some rational explaining why there is usually an added value in having competencies defined in addition to Standard Operating Procedures (SOP).
Spending some days in Nanjing, the former capital of China, is enjoyable. People are nice, work is fun, food is outstanding and my hotel is awesome. Nowadays, the service in most hotels in China is world class.
Monday morning I make my way to the restaurant, expecting my usual sumptuous breakfast. I am greeted with a smile and with the usual dialogue:
“Good morning, sir. Your room number, please” requests the waitress with a sweet smile. I answer 1326.
“Smoker or non-smoker?” I opt for the first one.
“Tea or Coffee?” I answer this one as well and start toasting my bread.
On Tuesday morning, it is nice to meet the same waitress with the same sweet smile.
“Good morning, sir. Your room number, please” she wants to know again. I did not expect her to remember, of course.
“Smoker or non-smoker?” I answer as well.
“Tea or Coffee?” I answer this one, irritated.
Wednesday morning the same waitress, the same questions.
On Thursday and Friday exactly the same procedure.
I am very sure it was always the same girl. And, I am very sure I was always myself staying in the same room, being violent non-smoker who always likes coffee with milk in the morning. And I would bet she must have recognised me from Tuesday onwards. I just assume she was following her procedure and was not willing to think one step beyond.
She knew her procedure. No doubt. Even with a smile. However, I gave her a not so pleasant rating when I checked out. She was the wrong person for the job.
A friend mentioned the following story to me.
She arrived in her hotel in Myanmar on Sunday in order to work the following week. The hotel was ok. It was clean and nice but not really comparable to hotels she was used to. She went for breakfast on Monday morning and was greeted by the waiter. The waiter asked the usual questions that seemed to come from the worldwide handbook for hotel waiters. This waiter, dressed in a not perfectly clean suit, was not too busy so that he started a small talk with my friend.
“How did you sleep”, was one of his questions – in starter English. And my friend hesitated but replied truthfully that her night was not that good. Just by the way, she mentioned that her pillow was too hard.
When she returned from her client meeting, she was truly surprised. On her bed she found two additional pillows with different height and filling. Exactly what she needed. I am sure this little deed resulted in a nice tip for the waiter upon check-out.
We do not know what the SOP (Standard Operating Procedure) for the waiter in this hotel says – if they have an SOP. I do not believe it instructs him to do what he did for my friend. If he got an SOP it was surely for waiters, not for chamber maids.
SOPs describe how a task has to be performed – often step by step. Competencies describe knowledge and skills needed to perform this task. Additionally, they formulate requirements towards attitudes to apply knowledge and skills. Competencies describe WHAT it takes to complete a job successfully with the “HOW” to do it. This HOW is of less importance when the job is about repairing a car, for example. However, it is of paramount significance if the performance has to be shown in the service line of business.
SOPs and competencies combined can help delivering the best results. Job competencies often take over the instructional task of SOPs in case SOPs are lacking substance or don’t exist at all. If it serves the purpose, why not? Investing in Competency Profiling may add value to performance management as well.
Performance is achieved through application of knowledge and skills with the right attitude. The waitress in Nanjing did her job, but was lacking exactly this attitude whereas the waiter in this second class hotel in Yangon did. He displayed competencies we could summarise with Customer Orientation, Collaboration and Teamwork as well as Alignment with Organisational Values.
He sincerely listened to customer needs and translated them into actions. This attitude is completely unlike the usual “How are you?” for which no one really wants an answer. Furthermore, he showed a great degree of Collaboration and Teamwork by helping his colleagues to satisfy the needs of their customers – beyond his own scope of work. And, he exhibited his organisational values, probably without even knowing.
His mind-set made the difference between poor rating and commendation by customers.
“iPhone, Google, Samsung Mobile Phones and other products” are usually mentioned when it comes to innovation. It seems that innovation is strongly connected to new products everyone can see and even experience. The talk about Process Innovation is rather limited or left to the “process specialists”.
Doblin has shown that the Return On Investment (ROI) of product innovations is by far lower than what you get when you rethink the way you make, sell and deliver your product or service. The HOW is much more important than the WHAT.
Some years ago when we established our business in Singapore, the registration of our company was easy. We just needed to register our company with the government agency through a very simple and hassle-free online application. However, setting up a bank account for the company was not that simple. Doing it online was not possible. We made some calls to the major foreign banks like HSBC and Standard Chartered and we realised then that they were not ready to support SMEs. Then, we heard about OCBC and their new offerings for SMEs. We gave OCBC a try.
On the phone, Yu Jin, one of their bankers, explained the advantages of their new SME business account model. Everything looked very promising until he asked: “When can you come to our office to open the bank account?”
“Today is not possible since we are with clients all day.”
“What about tomorrow?”
“No way. We are with a ministry from eight to six. After that I fly out to clients in China to spend a week with them”, I answered somewhat frustrated. I could not see an obvious way to solve our problem of opening our company bank account. And – much more important – to get our business finally up and running.
Still on the phone, Yu Jin thought for a while and asked
“What do you do tonight?” And, before I could get irritated he completed his thought: “Can I come to your place to finalise this application with you?”
At eight in the evening, he arrived at my house, explained all the formalities to me and my partner, we signed the papers and … voila. Problem solved.
On the one hand, I am very sure that at that time OCBC’s Standard Operating Procedures (SOP) did not explicitly tell their bankers to go the extra mile, to do something outstanding to help their clients with a creative solution. On the other hand, their culture must have been built in a way that people felt encouraged and empowered to do so.
The “WHAT”, which is the bank account, may be offered by other banks in a similar way for a similar price. The “HOW” makes the difference. Until today, we really appreciate the open mind-set Yu Jun was showing. He did not express the typical “Can Not” attitude. Instead, he delivered the service in a very unexpected way, an innovative way. He did something many people would not be keen to explore since it was beyond what the company said he could or should do.
This is what I call “Everyday Innovation”.
Waiting for the next “great innovative product idea” may never get you one step closer to a higher level of customer satisfaction, more revenue and consistent business growth. Instilling an innovative mind-set facilitated by some simple creativity tools that are supported by empowerment does. Process Innovation creates much more value to the business than one realises. It can be done by nearly everyone in your organisation at any time because processes run every day. Everyday Innovation will change your organisation.
 Larry Keeley, Ryan Pikkel, Brian Quinn, Helen Walters: Ten Types of Innovation: The Discipline of Building Breakthroughs. Wiley, 2013
One day I was asked why I left the stable, “money-printing” ISO 9000 business to join the riskier Six Sigma environment. My explanation went something like this: “Well, I think it makes more sense to implement a real business improvement and management system than to hang a nice certificate in the CEO’s office.”
But is this statement really true? Does starting a Six Sigma initiative automatically mean you’ll have an effective Quality management system? Definitely not. The downside of this methodology is that there are currently no “standards”, nor an “official” certifying institution. There is no external body that checks whether everyone walks the talk.
Six Sigma is more than starting a few projects, training some Belts and educating some business leaders about what it all means. The Six Sigma criteria depend on the business implementing this approach.
Generally, Six Sigma criteria are not comparable to the ISO 9000 but to the Malcolm Baldrige National Quality Award criteria or the European Quality Award criteria. These Quality management system descriptions exceed the historical thinking of “Quality Management Systems” enormously. Companies that have won either the European or the Malcolm Baldrige National Quality Award have learned that successful Quality management encompasses business management tools including leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management and results orientation.
Six Sigma aims to pursue the same target: “Completely Satisfying Customer Needs Profitably!” (Jack Welch). Therefore the criteria of a successful Six Sigma system are similar to the Baldrige criteria. One major difference seems to be that Baldridge shows just the shell of targets within those criteria whereas Six Sigma also describes a proven box of powerful tools and a rigid way to apply them.
The trick is how to plant this concept into an organisation. Here are some steps that most companies pursuing Six Sigma must go through:
Firstly, the Leadership team of the organisation decides to go for Six Sigma. They dream of increasing its net income with huge savings, continuing to portray the image of an outstanding company and increasing customer satisfaction and loyalty, with doubts of whether these concepts will actually work. Normally the implementation of Six Sigma starts with Leadership awareness training and a couple of improvement projects. When they choose their first projects, the company either shows its Six Sigma competence by selecting business related projects within the leadership team or demonstrates the old-fashioned Quality way by delegating the task to their Black Belts or a “Quality team”.
This phase also includes the first Black Belt/Green Belt trainings. If the projects only focus on manufacturing areas, the company will limit themselves to the playground of traditional Quality improvement initiatives. Instead, it makes sense to think cross functionally and recognize improvement opportunities in all key business processes.
Secondly, it is critical for the Leadership team to pass the first tollgate: Are they tracking results from their first projects or are they losing interest? Successful organisations install a steering committee – often called a “Quality Council” – to make decisions about projects, especially about tying their selection to business strategy and customer needs, implementing improvements, and reward and recognition.
If the leadership team shows that they don’t care, then Black Belts will not be able to produce results. And if the Black Belts do not produce results, then the leadership team will lose interest. It becomes a vicious cycle. The trigger must come from top management.
Results also need to be communicated to the entire company. It is critical to sell Six Sigma internally and convince the sceptics. Otherwise, the company will not be ready for the next phase.
Thirdly, results from the first projects usually include a few measures that track the results and ensure that the improvement lasts. Successful companies do add these measures to their internal dashboard and customer loyalty tracking system. Some even share those results with their customers, which builds trust.
Customer satisfaction measures are key for project selection. Unfortunately, they are not always available or used. Scorecards (comparable with Balanced Scorecards) should be implemented to tie Six Sigma implementation to the reward & recognition system and the bonus system to drive business results in terms of process improvement, customer satisfaction, employee satisfaction and net income. This kind of scorecard contains deployment and result measures.
Finally, to build Six Sigma into the “business as usual”, all departments should be involved. Six Sigma includes a powerful tool set. This can help to improve all key business processes – including administrative processes – throughout the organisation. Additionally, there are a few key departments who need to support the Six Sigma initiative. Finance should track the costs and the benefits. Marketing/sales should gather the voice of the customer and track customer satisfaction levels. IT should support certain projects with their technical competence. And, HR must support Black Belt and Green Belt selection and development. They should include it into reward and recognition, and track and analyse employee satisfaction.
By this phase, project selection is no longer driven by the Quality leader or business leader. Individual process owners use Six Sigma to achieve their own business goals. Therefore, they dedicate resources to the effort and gain the results.
Consequentially, you will know when Six Sigma is in the bloodstream of your organisation, when it will no longer be necessary to talk incessantly about it. Then, it will be part of the culture. This is probably one of the major differences between earlier improvement efforts such as TQ and Six Sigma. There will be no need to get startled by the call of the ISO 9000 auditor asking for the date of the re-certification. Six Sigma is a different mindset. There will rather be a kind of a regular internal evaluation by the leadership team assessing the status of their own management system – comparable with EFQ assessment.
Six Sigma means
Leadership’s role is critical, especially at the outset, because leaders communicate and reinforce the power Six Sigma has to achieve business objectives. Without buy-in from leadership, it simply will not work. It must be reinforced from high and adopted from each internal level and process area. When done well, Six Sigma has the ability to create a truly customer focused workforce – and organisation.
Lean application outside of the manufacturing sector is frequently met with scepticism. Oft cited reasons are that service providers do not ‘manufacture’ anything and that there is no ‘production line’ to speak of physically. All that is seen are desks, chairs, phones and computers.…
“Voice of the Customer” – VOC in short – is a key topic in all kind of customer service, TQM or Lean Six Sigma training and related project work. There are two main categories for VOC data, reactive and proactive. Firstly, proactive data is collected with methods like focus groups, interviews, observations, surveys or test customers. Secondly, reactive data is mainly based on customer complaints, feedback, hotline data or warranty claims. The nature of the human being restricts itself almost always to negative comments through reactive data channels.
Asking staff working in customer service departments about the nature of the feedback they receive from customers will result in answers like “No-one calls to tell us how good we are in delivering our service. Most of the calls – that are not questions – are more or less strong complaints.” On the one hand, this sounds frustrating, “not fair”. On the other hand, “negative feedback” is very powerful due to the fact that someone takes the time and tells us what goes wrong in our processes, hence shows us opportunities for getting better, for getting more competitive, for growing. The quality of this kind of information is usually much better than the feedback received via proactive channels like surveys due to the fact that respondents of surveys do usually not have a stake in the issue.
How do YOU feed back?
The other day in Singapore, I had a small complaint about an SBS bus driver who did not really respect me cycling my way on the road. After getting home I took some time to recap what happened and wrote a very detailed letter to SBS to explain the situation.
After I spent some days in a hotel in Batam, I received a survey form I needed to fill in before leaving the hotel. Did I fill it in? Make a guess…
Customer research studies in the German financial industry some years ago have shown, that complaints normally reveal only the “tip of the iceberg”. Receiving 50 complaint letters means we get only the feedback from those people who take the time and the courage to complain. Hence, there might be about 1250 customers out there who experience a similar situation but do not complain. May be they go immediately to our competitor if they have a chance. We may never find out. Furthermore, the research has shown that there might be as much as 10 times more negative contact points with our company – like “Your call is important to us. Please stay on the line.” These negative incidents are not “big enough” for a complaint but always impactful enough to drive customers’ decision sooner or later.
Welcome complaints! As long as you get complaints someone is interested in your service and wants to help you improving. Behind each complaint you can expect as much as 25 times the situation that has led to the complaint and as much as 250 negative “Moments of Truth” with your company. Use this valuable and powerful information for taking actions. And, give positive feedback, too!
The Moment of Truth is the short time frame when a customer experiences the product or service that many people have prepared often over many months. It is the moment when a small, often unintentional mishap has the huge potential to spoil the result of hard work by others in the organisation behind the scenes. Good process managers know this and put their focus on the Moment of Truth.
When Jack Welch explained his view on management he used to draw a company structure against the common understanding upside down. His explanation went somehow like that:
Who is the most important person for our company? It is our customer. Consequentially, the people who make or break every day’s business are the people who interact most with our customer, our front line staff. The crucial job of the lower management is to make sure their team members at the customer interface have everything they need in order to serve, to impress and to delight the customer. Every level of management has to support their team members with this purpose. My job is to ensure everyone in my company is able and willing to do his best for this objective.
For many of us this is not really new. However, the number of managers – call them process managers – who really go to Gemba for experiencing the Moment of Truth is marginal.
Is it not enough to ask your staff what is going on at the ground level, what happens at the moment of truth? Well, it would if they knew. And, it is a very normal human tendency that information gets “filtered” when it is passed from hand to hand, from level to level. Often there is a factor of guesswork added to the information.
Only an hour after running a very simple role-playing process simulation, the 20 managers involved in the process are asked to state the time spent on their own process steps. They merely have to guesstimate the duration for their direct involvement – a non-challenging task, one would assume. To everyone’s surprise the actual time measures more than 300% of the time estimated by the group of managers. Hence, it is not enough to estimate or guess. You need to measure in order to know.
Does this only apply to processes that are new to managers? Not at all. A Lean Six Sigma team’s project focusses on reducing the lead time for treating the customer at a routine service process. During an interim project presentation, the manager who has been directly responsible for that process for many years raised his voice after the team revealed data about the time needed to attend to the customer. He doubted the data; he could not believe that the process took as long as presented. Of cause, the team members were able to show facts… Hence, if you run a process for years, it does not automatically mean you know what happens on the ground. Customers and employees change. And so do processes.
Gemba is the place where your product or service is received and applied. You cannot learn about the Moment of Truth, the usage of your offerings and how well you are able to meet customers’ expectations by conducting an annual survey or by issuing some evaluation forms.
CEOs like American Express’ Kenneth Chenault know about this. He is said to spend time in American Express call centres to pick up calls from customers and listen to their requests. He surely cannot change the customer service level by answering some calls every now and then. However, he walks the talk. As a leader, he knows how important it is to observe and focus on what is critical to customers during the Moment of Truth. And, he expects his employees to “have it in their DNA”.
The former CEO of Singapore’s Alexandra Hospital, Liak Teng Lit, used to host a monthly lunch for a focus group of patients who had just gone through Alexandra’s service. He wanted to hear them out about their experience at the Moment of Truth. This way he learned about hospital processes and how his customers perceive them. Whenever possible, he would look into improving things. .
For managing a process successfully it is essential to know the details about the process. This can only be achieved by a set of carefully crafted instruments put in place:
And, don’t forget going to Gemba from time to time to observe what happens at the Moment of Truth. The purpose of this is two-fold: Firstly, it helps you getting real information from the ground regularly. Secondly, it sends the right signal to your team members, your colleagues and, last but not least, to your customers.
Moreover, it is very likely that you learn something new about your processes.
Developing a compelling vision and mission statement as well as a sound strategy is vital for any organisation. Equally important is the translation of the strategy into the day-to-day business. This step becomes even more critical for multi-national companies with their need for regional adaptation and alignment with corporate at the same time. So, how do we make sure our mid- and long-term plans – developed in the head quarter – make sense to business leaders and employees in other regions?…
Ting is a sophisticated traditional Chinese character (Figure 1) that exemplifies the most important activity related to customer service in an impressive way: Listening. The old Chinese already knew that when listening with your ears, you better treat the speaker as a king, focus wholeheartedly with 100% attention.
Only by doing so you learn about your customers’ requirements, the mentioned ones and – often more important – the unsaid.
It was early evening when I received one of these customer survey calls everyone experiences once in a while. The timing was not perfect however I decided to help this poor chap on the phone. He was just trying to do his job for his bank. Patiently did I listen to his questions trying to give him my honest rating on a scale from 1 to 10. Before we started, I had already decided that my average rating would be around 7. This does not make someone loosing face and still shows some room for improvement. Since the questions did not really touch anything that had to do with my banking experience but did rather circle around the brand value of his bank, I lost some interest. Nevertheless I installed some variation by going down to 5 and up to even 9 for some questions.
Only when he finally touched an area that had to do with my recent banking experience, I woke up, gave him a rather low rating and wanted to explain why. His answer was: ‘Sorry, I am not really from this bank. I am calling from a call centre and I am not able and needed to gather your verbatim feedback.’
Customer surveys are means of listening to the customer. Unfortunately, when you survey a customer he is often not in the mood to give his feedback. Most likely, he is disturbed in the middle of something more important – which is nearly everything. When you then engage a call agent – who gets paid by number of calls completed in a certain time frame – you have two people who are not interested in talking to each other. That call would be used to derive strategy, improvement actions or OD interventions. What do you think is the result of that? Where is the Ting in that?
Another time, I had a rather unpleasant experience with one of our banks and their incorrect statements. I sat down, took time to write a pretty detailed explanation of what happened. The bank contacted me and promised to look into the matter. Some days later they apologised and said that this was an IT issue. This would be fixed with the next release. Good.
Customer complaints related to real events are much better in quality and usually indeed useful for both, fixing the problem and improving the system. Research in the German financial sector has shown that these complaints commonly reveal only the tip of the iceberg. Behind each complaint you should expect 25 similar unpleasant events with customers who do not complain. They may just walk.
And, think about how much you pay for the surveys. Complaints come for free!
When I joined GE Capital many years ago, one message got hard-wired in my genes from the beginning: the customer comes first. Before Jack Welch started his famous Six Sigma initiative, GE installed a thorough system for collecting and analysing the voice of the customer that was usually scattered all over the place. Every Six Sigma project presentation we did not start with the voice of the customer was prompted by our SVP with the question:
And, how does this relate to our customers?
Another best-selling question by our SVP was
Do you THINK this is what the customers want or did you actually ASK them?
Both questions needed to be answered with specifics, with facts. Commonplaces would not be accepted. Never before or after have I seen this kind of rigour in another company.
David, the MD of a medium-sized supplier company for the petrochemical industry in Jakarta, meets his direct reports every morning at 0800 for a very short update. He used to ask questions like ‘Everything ok? Anything new?’ until he found that something is missing in his company: the focus on the customer. Therefore, he decided to change this daily routine. He now starts the day with one question: ‘How is the voice of the customer?’ His team needs to mention not only issues raised by clients or observed by his staff. They also need to come with short-term and long-term solution ideas. Every day! Since they started this habit, they learned a lot more about their clients. In this company, the meaning of voice of the customer is in the bloodstream. They listen with 100% attention – and act. They know the meaning of “Ting”.
In the Singapore blood bank, nursing staff together with Red Cross continuously work on improving the level of customer service. They know that every donor who does not return means a lost blood bag that could be vital for a patient in one of the hospitals. Therefore, nurses and their colleagues do not rely on written customer surveys. They contact their donors in order to listen wholeheartedly to donors’ needs, to understand their concerns and to be able to serve them better. Although being a government agency, they display an exceptional level of dedication and customer focus that would do good to any private organisation.
Talking about the importance of the customer once in a while and running some surveys from time to time is not good enough to really serve them better. In order to achieve this you need to change the behaviour of your team members. It is necessary to install some habits.
Make it a habit, like David, to ask in your meetings with your team members ‘What is our customers’ voice? What have you done to serve our customers better?’ And, make it a habit to start the talk with your own story to highlight how you have improved the level of customer service.
If you cannot answer these questions positively every week, check whether you have spent your time wisely.
And, it would do us good to remember what the old Chinese taught us some thousand years ago: Listen with your ears wide open (and your mouth shut), by treating the speaker as a king, whilst focusing wholeheartedly and paying full attention. Listen with Ting.