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It is obvious that in today’s marketplace, every organization must become more efficient. In a Lean and Six Sigma world this means eliminating waste, which will assume one of these forms:

Overproduction and Inventory: Both old and new organizations easily fall into the trap of overproduction, some producing goods before there are buyers while others are producing more goods than there is demand for. Both situations are bad for the organization, especially from an internal perspective. From a customer perspective, overproduction might lead to shorter delivery times and lowered market price. The customer-oriented perspective might indicate that customers get the products in the time and that the price is balanced with the value it delivers to customers. Overproduction is something to be avoided, but at the same we need to make sure that we have right amount of goods in inventory to be delivered within the timeframe that customers expect to receive them.
Are you measuring the expected and realized delivery times to your customers and the deviation between them?

Waiting: As we all know, waiting for something or someone in a process is costly. While waiting, people may not have anything to do and partly manufactured goods need to be stored somewhere. It also wastes time for employees to switch from one process instance to another. From the customer’s perspective it is undervaluing customer’s time, since the organization is not able to design their processes and inventories in such a way that there is no useless waiting times delaying the process. In some cases, business rules can cause situations where there is useless waiting.
Have you evaluated all your business rules to check if they are still valid?

Processing: This is one of the most customer facing phases in manufacturing, even though many organizations do not seem to think so. This is where time is taken, quality is put into products, customer value is created and pretty much all the work in an organization is done. It is not enough to measure all the bits and parts of the process from an internal perspective, but we need to also evaluate the processes from a customer-oriented perspective. That means seeking the answers to questions such as: “Is this something customers really need?” or “Does this process contribute to successful customer outcomes?”. With the customer-oriented perspective it is possible to extend traditional Lean and Six Sigma thinking to question the overall reasons for certain processes to exist in an organization. That will lead to increased revenue, lowered costs and improved customer service simultaneously. From a mere internal perspective, that is hard to come by.

Correction: When everything goes right everyone is happy, but usually that is not the time an organization is really evaluated. The true measure is taken in those moments, when something fails. And as we know, correcting costs a lot. Thus, organizations should thrive for making as little mistakes as possible. But since perfection is hard to achieve, organizations should prepare for proper correction. From a customer-oriented perspective, always seek the cause, not the effect of an error. And make sure that it is you who notices the error (first), not the customer. It sounds very obvious, so you probably must have clear measures and plans for reacting to reclamations and other customer feedback?
Are you measuring those with the same enthusiasm as manufacturing mistakes detected internally? And foremost, have you linked that information all together?

If you have inefficiencies in your processes, you might be making more goods than you need, having people waiting for turns in the process or you are not fixing mistakes efficiently. In many cases, you may be doing all the previously mentioned things right, but you are missing the customer perspective from your process optimization efforts; and that will prevent you from creating even better business.

 

Here are some tips for reducing waste in your processes:

Sifting – The internal (Six Sigma/Lean) perspective recommends removing things from the work area that are not required to do the job. The customer-oriented perspective adds to get rid of all the work that does not directly contribute to producing successful customer outcomes.

Sorting – Organize tools and materials. Also evaluate how those that are left contribute to creating value for customers.

Standardizing – Eliminate random elements that slow down production. But, at the same time create an environment that enables people to present their ideas on how to improve processes. Standardize your processes for manufacturing successful customer outcomes (products are just a medium for that). And while doing that, keep in mind where the process starts and ends for your customers, not just for your organization.

Self-discipline – Insist on consistent performance. Make the customer everyone’s business in your organization.

 

Summarized: first evaluate what your customers really need from your organization, and then plan to improve a process and do it. Check to see if it worked with both internal and customer-oriented measures. Then, based on the results, act to improve the process further. And do not do this all only from an internal perspective. Have the best experts to evaluate what you are doing: Your Customers.

 

Get Janne Ohtonen's latest BPM book for free at http://addvalueto.me/download-a-free-process-leadership-book/

Managing customer expectations and providing great customer service are very important nowadays. To be able to do that, you should build customer satisfaction into your business processes. Traditionally, organizations measure customer satisfaction once per year, long after service has been provided. Some organizations may measure customer satisfaction after a service, project or product has been delivered and then take corrective actions.
The problem with this kind of approach is that they are reactive, not proactive ways to respond to customer satisfaction.

If you build customer satisfaction into your business processes, you do not have to read those negative feedbacks of your actions after it is too late. Here are some ideas, how to build customer satisfaction into your business processes:

“KYSS – keep your systems simple.” Do not track everything, just what you need. Focus on major attributes that contribute to successful customer outcomes. To keep on top of the details about your customers, develop a tracking system listing their traits and main preferences. Update it after each interaction to keep it fresh. Customers will be happier, if your employees do not need to take a long time to browse through complex systems to serve them.

“If it is important to your customer, it belongs in your tracking system.” Record service preferences and personal data, which help you to serve them better. Include pertinent information on any previous missteps on your organization’s part concerning this customer and make sure that those problems will not rise again.  Customers will remember the mistakes that you have done and so should you. Do not record the mistakes to punish your employees, but to learn and improve.

“The information you gather needs to be available in real-time.” Make sure all front-line employees have immediate access to the tracking system. You should not make the customers to tell you something that you should already know. If the customer contact comes through email, connect that with your CRM. If you receive a phone call, identify the customer with their phone number. If they walk into your store, remember them if you can and if you can’t, then have customer loyalty system, which identifies the customer.

Because customer preferences change, assumptions are dangerous.” Just because a customer once ordered coffee after dinner does not mean that he or she will always want coffee after dinner.  Know your customer’s preferences, but do not get locked down because of them. You can ask them for example that would you like to have some coffee after your dinner. Do not be afraid to bring more value, for example by asking, if they would like to have some Costa Rican coffee that you imported yourself last week.

Customers’ moods change, so you need to track them.” Have your people track customers’ moods and make it their business to lift their spirit up. If people feel better after they left your business than before came in, then you have succeeded. That will make then come back and your employees will feel better of themselves, since they could make someone’s day better. It will also give positive kick to revenues. Be proactive, not reactive.

Do not dampen the customer experience with an impersonal delivery.” People like to be treated as individuals. Make every customer count and do not over look one for another. It is true that some customers are more valuable for the organization than the others, but you should never show that to your customers. For example, use the customer’s name on a liberal basis, always with a sincere, engaged manner.  And teach everyone in your organization good manners: to say hi and goodbye, thank you and other polite ways of working. Watch out for the caveat that your employees will look fake when being polite, because they do not want to be polite (you need to create a personal culture to serve customers in your organization).

Use technology to ask for customer’s information sparingly.” Ask only what you need to know to serve them better and they will happily share their information. Employ your database information discreetly. Do not sound like Uncle Sam watching them. You do not want customers to think you spy on them. And also, state clearly for what purpose that information is gathered for. After you have the information, use it! Too many organizations collect information just the sake of it and they do not use it intelligently to serve the customer.

 

To provide exceptional service, employees must think like your customers. Have your people eat in your restaurant or shop at your store. Let your employees use your services, so that they can see how they work. The old ways of measuring customer satisfaction do not serve you anymore and the reason is that you need to be proactive, not reactive. That requires you to build customer satisfaction as part of your business processes. Your employees need to know what may go wrong before it happens, so that they can prevent customers suffering from it. When you manage to do that, you do not have to send them annual customer satisfaction survey and take corrective actions long after customers have already dealt with the consequences.

 

 

Get Janne Ohtonen's latest BPM book for free at http://addvalueto.me/download-a-free-process-leadership-book/

The Blue Ocean Strategy is highly related to process innovation. The idea of this strategy is to build new businesses where none existed before. So-called Blue Ocean industries are more profitable than traditional business fields with head-to-head competitors. In the Blue Ocean strategy, you must offer your customers a value innovation (i.e. tangible product or service advancements) accompanied by demonstrable savings. To be able to do that, you have to look at your process innovation from a new perspective. Let’s revisit the six steps of the Blue Ocean strategy from a process point-of-view.

Reconstruct market boundaries – in a Blue Ocean strategy you must re-evaluate the premises that form your industry’s assumptions and shape your company’s business model. Easiest way to do that is to think: where does the process start for your customers and where does it really end. That does not only lead to expanded value chain, but also into completely new markets. Think about for example Ryanair, which is not only flying people, but also providing the whole holiday experience with accommodation and car rentals included. Holiday does not start and end for people when they fly (that is how traditional airlines used to think)…

Focus on the big picture – Keep your eye on the overall view and don’t get lost in the statistics. Many business strategists get lost in the data jungle, so they often miss where they – and their competition – are headed. You have to think what your customers really need from you and how your organization can provide them successful outcomes. Ask yourself every week: what do we have in our business processes that customers are not benefiting from.

Reach beyond existing demand – Businesses naturally focus on current customers, a process that invariably leads to greater market segmentation analysis. But, real growth lies beyond existing demand. To get to the open water, focus on potential future customers. Apple did not satisfy with just creating new versions of iPhone, they reinvented how people work with portable devices by introducing iPad. That for sure created them new reaches beyond traditional smartphone markets.

Get the strategic sequence right – Execute your strategy sequentially to achieve your value innovation. To be compelling, the technology must provide convenience, safety and entertainment. It has to make your customer’s life easier, simpler and more successful. Plan the experience you want buyers to have at all stages. Assess your service’s or product’s usefulness, ease, handiness, safety, entertainment value and environmental friendliness in light of how each factor affects the customer upon buying it, bringing it home, using it, adding to it, keeping it working and eventually, disposing of it. Remember that the customer experience is the process.

Overcome key organizational hurdles – Successful execution demands that your organization must resolve internal departmental differences. If you are still working in silos, try to create process bridges over them so that in the eyes of the customer you offer products and services as a one, solid company. Do not let your internal politics, bureaucracy, silos or other things get in the middle of you providing perfect customer experience every time.

Build execution into strategy – Reduce your management risk by incorporating Blue Ocean implementation into your organization’s ongoing processes. Make providing great customer experiences your main business. Teach people to think out of the box all the time and make sure that they are empowered to improve the processes. Make problem solving a team effort that everyone wants to participate in. If you do not build execution of great customer experiences part of your organization’s strategy, people will never do it. You can ask that for example from Zappo’s who are not just selling shoes, but are providing over the top customer experiences.

To succeed in Blue Ocean strategy, a value innovation must demonstrate actual savings and an appreciable benefit that a customer can use immediately. Your organization has to be able to fulfill the needs of your customers consistently all the time. The idea of Blue Ocean strategy is to build new businesses where none existed before and best way for you to do that is to start thinking about your processes from customer perspective.

Here are some reflective questions that you may ask:

  • Are your organization’s market boundaries clear to you?
  • Do you understand where your customer’s market boundaries are?
  • Are you playing with numbers or seeing the big picture?
  • Do you understand where demand for services and products in your target customer groups come from?
  • Are you able to work together as a team towards a common goal or does internal hurdles slow you down?
  • Is providing exceptional customer experiences built into your organization’s strategy?

 

Get Janne Ohtonen's latest BPM book for free at http://addvalueto.me/download-a-free-process-leadership-book/

Change culture is the driving force in process improvement initiatives. The culture must support the fundamental ideology behind the reason for an organization to exist. And as we all know, every organization exists to fulfill customers’ needs and wants in one way or another, because they for that service.
Process improvement requires right kind of organizational culture to support it. Here are few key ingredients that you can consider while building your organization for better process improvement results:

 

Have genuine focus on the customer – the customer is everyone’s business, no matter what function person has in an organization. Even people in “internal roles” should be doing something that enables others to serve customers. Always seek customer satisfaction and value through fulfilling their needs. Make your employees to understand that customers will always want something, but even more important is to know what they need. Serve the cause, not the effect

Your organization needs a culture, where focus is on mastering processes from a customer-oriented perspective – Build in competitive advantage in delivering value to customers. People do what they are rewarded on, so make sure that you give out the goodies for right reasons. And you do not necessarily need to give bonuses; just pay the salary for delivering successful customer outcomes.

Have data- and fact-driven management – Clarify key measures for gauging business performance, gather the necessary data and analyze it using key variables. You get what you measure for. Build your balanced scorecard from customer-oriented perspective and make sure everyone sees and understands those results. With every KPI ask: “How does this help my customer to succeed?” That will help you to think internal matters of an organization from customer-oriented perspective. If something does not contribute to providing great customer experiences, get rid of them.

Create boundaryless collaboration culture – Break down organizational barriers to improve teamwork throughout the organization. It might be best to have truly process-oriented structure in your organization, so that everyone gets what he or she need to do provide profitable customer experiences. Do not support old-fashioned silos that prevent people from collaborating.

Require proactive management – Set goals for providing customer experiences, review them frequently, establish clear priorities and focus on problem prevention rather than resolutions after the fact. Have your people anticipate problems before they even occur. Cost of fixing a cause of problem is lower when detected earlier.

Support a drive for perfection, combined with a tolerance for failure – You must be willing to try new ideas and approaches that have some risk of failure in order to make changes leading to perfection. Just make sure that you learn from your mistakes that you will make on the way. If you cannot extract a teaching from a failure, you better stop trying. No failure is a failure, if you learn something from it; it is just a way not to do that thing (like Edison concluded while trying to create a light bulb).

These six things mentioned in this article are quite big issues to handle, but they underlie most of the successful process improvement initiatives. Which one of these cultural factors is strongest in your organization? And which one weakest?

Spend few minutes on evaluating, what can you do to strengthen the weak parts and make an action plan to do it.

 

Get Janne Ohtonen's latest BPM book for free at http://addvalueto.me/download-a-free-process-leadership-book/

The goal of 6-Sigma is to achieve consistent, reliable, repeatable performance in areas that affect effectiveness and efficiency. Effectiveness measures meeting the customer’s needs or wants and efficiency measures the cost of meeting customer needs or wants.  Let’s go through DMAIC from the customer’s viewpoint.

6-Sigma has five steps, summed up by the acronym DMAIC. In following, bullets are the traditional way of thinking in 6-Sigma and explanation below is the customer perspective.

1) Define the company’s processes and customer needs. Processes are the ways that companies take inputs, add value and deliver outputs.

Every business organization is all about their customers, every governmental office is all about serving citizens and every not-for-profit organization is all about serving people related to their mission. Thus, we can say that the customer experience is the process for every organization in one way or another. For customer process inputs are their true needs, added value is the way that those needs are taken care of and delivered outputs are customers with fulfilled needs. It is not about what customer’s want, it’s about what they need. And for customers processes are the ways that organizations take care of their needs.

2) Measure process effectiveness (meeting the customer’s needs and wants) and efficiency (the cost of meeting customer needs or wants).

How do you feel when you are send a customer satisfaction questionnaire with 50 questions? Or you are asked to answer questionnaire, which doesn’t really ask anything you would like to answer to? Well, your customers will feel the same way if you do that. Customers actually want measuring process effectiveness to be as invisible as possible to them, but at the same time as efficient as possible. You shouldn’t ask the customers how long did you wait in a queue, because from their viewpoint you should know that. You should also know how long they are willing to do that. If you want to have feedback questionnaire, it should ask only: Will you use/buy our services/products again? Would you recommend our services/products to your friends/family? And then ask the appropriate “why not” -question if the customer wouldn’t. Rest you should figure out with continuously bothering the customers.

3) Analyze the data in an attempt to identify the causes of variation in the process.

From organization’s internal perspective it is important to analyze the variation in processes. From customer’s viewpoint they are actually the first ones noticing the variation; long before your measurement systems, because they will suffer from the effects. The more you can prevent variation, the better. But it is not only about measuring and analyzing. It is even more about reacting to that variance. Organization needs to deal with the effects and remove the cause. When things go wrong, your customers will expect you to do something about it. And world’s best organizations are working on that proactive, they will know and deal with the problem in real-time for customers. For example when thinking about IT systems, your customer should not be the first one noticing that your servers are down causing him to not be able to access the system.

4) Improve the process by doing things differently.

And with different, customers mean fulfilling their needs better. Mathematics on analyzing the processes is not enough to tell you how to improve processes from customer experience perspective, especially if you have not measured the right things from the beginning. Try to find the optimum number of customer interactions and that will lead to increased revenue, lowered costs and improved customer service simultaneously.

5) Control with measures to make sure the improvements stay in force.

Control the customer experience at all times. You have to make the customer everyone’s business in your organization from top to bottom (in the hierarchical world) or from customer to outcome (in the process world).

Here are few reflective questions for you to ask:

-       Is our organization thinking about the customer in every step of 6-Sigma DMAIC?

-       Do we evaluate every processes right to exist before optimizing it?

-       Do we measure the right things that provide successful customer outcomes?

-       Do we control our processes based on right measurements?

 

 

Get Janne Ohtonen's latest BPM book for free at http://addvalueto.me/download-a-free-process-leadership-book/

Creating better customer experience can be very cumbersome or very easy depending on how complicate methods, systems or ideas you want to use. Below are some ideas for you, how to improve customer experience through changing your business processes.

 

Put some real meaning into the term ‘customer engagement’.

Do not just say you are ‘engaging’ with customers by responding to their social media comments. Let them really talk and start using their ideas to show that you really are listening. Many organizations are having success with online idea exchanges and communities where customers can offer their ideas on improving products and services. Not only can customers submit ideas about products and services, but other customers can support those or add their own ideas to the original one. This kind of activities can replace traditional customer satisfaction surveys with much more vivid information on what customers think about you.

Focus on creating the single-customer view.

Most people already know the big customer experience challenge is creating customer files with histories and links to pertinent information. CustomerThink, an online community, recently completed a survey of U.S. consumers and found that 80% had experienced what it calls “touch point amnesia,” which refers to experience when a returning customer calls a company with a problem and is treated like they have never been heard of before. Of that 80% from the survey, 50% said they were less likely to recommend the company and between 24% and 35% were less likely to actually make a purchase because of it. So, it matters that you treat your customers as individuals.

Push social media across the organization.

Companies are at risk of not getting true benefit from social media, which is important part of customer experience strategies, because it is controlled by marketing or communications groups. You talk to any CEO and they will tell you that the focus of 2012 is to get closer to the customer, yet social media itself is already a functional silo within the organization.While marketing and communication groups own social media, service is at the bottom level and managers do not even use any of these tools. It is not enough for top management to be involved, but they have to actively participate into building the profile for the organization.

Teach employees to have conversations with customers.

I think we should already know that scripted contact center agents are bad news. I received a brochure in mail for a new cell phone offer. I actually considered switching my operator and I phoned to them. When I attempted to ask the agent a question, I was instead given a scripted sales pitch. I didn’t make the switch. There are these companies that are driven purely by metrics and scripts, because they think that the way to make customer service successful is to constantly measure the cost of it. This just is not the right way to succeed with customers. You still need the metrics, but you should not base your customer experience on the wrong kind of metrics.

Understand when your customer might feel vulnerable, because those are precisely the moments when they can turn on you.

It is important to get ahead of those vulnerable moments when a customer is nervous or second-guessing their buying decision. Here is one example from real life: following up on the sale of a Internet connection contract  to make sure the customer understands what they purchased before they get the bill in the mail. Here is another example: a hospital in a small city recognized that most people’s stress level increases as they approach a hospital. So, it pipes in relaxing music to the parking lot to help people settle down before entering the hospital building.

Here are some reflective questions you can use to evaluate your customer experience:

  • What customer engagement means in your organization? How could you make it more worth-while?
  • Do you treat your customers as single-customers?
    Do have them tell you information that you already know?
  • Do your managers understand the power of social media and do they actively use it for the benefit of organization?
  • Do you use scripted talks to discuss with your customers?
    Do you evaluate and teach your employees to have meaningful discussions with your customers?
  • Do you understand those key moment of truths when your customers make decisions regarding your business?

 

Get Janne Ohtonen's latest BPM book for free at http://addvalueto.me/download-a-free-process-leadership-book/