Customer-Centered Continuous Improvement
Continuously improving customer value is difficult in practically any organization. This happens partly because many organizations are still organized around functional silos, which are managed to optimize their own performance rather than to deliver value to customers.
If internal fighting doesn't damage things, Process Attention Deficit Disorder will. A surprising number of executives think of service improvements as the slow, boring path to competitive advantage.
Then there is a third killer of continuous improvement: the performance management system. A singular focus on next quarter's numbers, of course, complicates ongoing investments in process improvement.
Leading organizations use some powerful long-term techniques to get around these problems. I categorize them as tools of the heart, the head, the ear and the feet.
Inspire people to improve customer value — Heart. Organizations whose employees share a clear sense of who they are and the impact they are trying to have on the world can overcome internal barriers to improving customer value. For example, hospitals attract employees who care about people, want to provide better patient care and are proud of their professionalism. They are not motivated by cost reduction and they probably will not embrace cost-reduction approaches. But they will enthusiastically embrace approaches that eliminate waste and improve the patient experience.
Focus on achieving a distinctive customer value proposition - Head. Not all organizations use the same approach to creating customer value, nor should they. Having a clear strategy helps an organization focus its efforts. One strategy is to eliminate inefficiency and waste by providing consistent, reliable, low-cost services. Another is to tailor your offerings to each customer, based on deep knowledge of their unique needs. A third is to offer technically innovative, cutting-edge products and services. I once helped the Dana-Farber Cancer Institute define its customer value proposition; one of the organization's goals became the provision of world-class services. This understanding, in turn, led to a concentrated focus on improving the patient appointment scheduling process.
Build online communities with customers to guide product and process improvements - Ears. Online customer communities (interactive sites where customers collaborate with the organization and with one another) are a relatively new phenomenon. According to my friends Vanessa DiMauro of Leader Networks and Bob Buday of The Bloom Group, these communities can help organizations tap into customer trends and thus develop better products and services.
In September 2009, the Palladium Group, founders of the Balanced Scorecard, launched "XPC - The Execution Premium Community" for senior strategy professionals around the world. It now has 2,700 members from companies who can access Palladium's resources, share knowledge and experiences and take part in discussions with Palladium Group strategy consultants. The community has helped the Palladium Group understand which topics customers need help with, gather ideas about what new offerings should look like and test these offerings before marketing them widely.
Leverage personal interest in process improvement to learn customer expectations - Feet. Employees learn what managers value by watching how they spend their time. If they see you listening to and solving customers' problems, they will follow suit.
In my post What the C-Suite Needs to Do for Process Improvement, I described how Jeff Bezos and other Amazon.com executives spend time listening to customer problems and visiting distribution centers. Mickey Drexler, CEO of J. Crew (and CEO of The Gap during the 60s), is famous for visiting his stores anonymously to observe and talk with customers and employees. He personally answers customer e-mails and phone calls and makes at least five store visits a week.
Continuous process improvement to generate more customer value often conflicts with optimizing departmental performance or with actively delivering short-term returns. But there are powerful techniques that can leverage an organization's heart, head, ears or feet to better connect them to customers. Different companies will find different approaches that work best for them, and the smart ones will use a combination.
What systemic approaches to improving customer value have you seen companies build? Did they touch employees' hearts, heads, ears and feet? Have you seen an organization manage more than one approach at the same time?
Brad Power ([email protected]) is a consultant and researcher on process innovation. His current research is on keeping attention on process management - making improvement and adaptation a habit. He is currently conducting research with the Lean Enterprise Institute.
Portuguese translation by Tamiris M Manzano.
