Month: October 2014

Customer-centrism

Posted on

Customer service is the practice of providing customers with a positive and helpful experience, like a brand, it’s what the customer perceives and remembers of the product they used or the service they received.

So voice of a customer is crucial, it’s the driving factor of any organization to deliver quality products/services, conformance to customer’s needs, and developed products/services demanded in the market.

The “voice of the customer” is a process used to capture the requirements/feedback from the customer (internal or external) to provide the customers with the best in class service/product quality. This process is all about being proactive and constantly innovative to capture the changing requirements of the customers with time.

In customer service provision, the voice of the customer represents the aspects which the customers expect or demand from a product and how this can be translated to more specific relevant aspects of the process, this helps firms prioritize goals consistent to the specific customer requirements.

The customer either internal or external, is always the most important focal point for a Lean Six Sigma project.

Lean Six Sigma’s main goal is organizational survival and/or growth through superior and improving customer satisfaction.

Lean incorporates customers in the supply chain and allows them to pull the product through the supply chain which increases process speed whilst Six Sigma focuses on the customer as a source to define what aspects of a certain process are critical to quality.

The Lean speed and Six Sigma quality are brought together in Lean Six Sigma to be able to fulfill the delivery and process control requirements according to the Voice of the Customer.

Many companies tend to focus much on their revenues and forget to manage the expenses. Many realize the need for being lean just because of the realization of emerging competition and technology capability from rivals or other countries who can produce the same quality product at an extremely lower rate by being more efficient and managing their expenses better.

Most people would agree that customers are the most important part of a business – no customers, no business. In order to be successful, a business must know who its customers are and what the expectations of those customers are for the product or service the business sells. In Six Sigma, that process is known as identifying the voice of the customer (VOC). The key to having success in that process is gathering customer data and converting it into measurable critical-to-satisfaction elements.

 Tony Watima – SigmaStrat

Advertisements

Organisational Culture lies in the Vision

Posted on Updated on

Marissa Mayer the CEO of Yahoo, ranked the eighth on the list of most powerful businesswoman in America of 2013, believes that strong companies have strong cultures, each has unique and individual flavor.

So what are Corporate cultures?

It understood as a shared common resource, a pattern of assumptions, beliefs and behaviors while coping with problems of external adaptation and internal integration.

Dave Dufield co-founder of People Soft described corporate culture saying “our true competence is our culture, that’s what attracts people and keep them here. It also helps sell to customers. Customers want to work with companies that are competent, trustworthy and fun”

Organizational cultures are created, maintained, or transformed by people. An organization’s culture is, in part, also created and maintained by the organization’s leadership. Leaders at the executive level are the principle source for the generation and re-infusion of an organization’s ideology, articulation of core values and specification of norms.

It believed that companies with strong cultures generally perform better than those with weak cultures, but only when the cultural content is appropriate for the organization’s environment.

But rapid growth enterprises are facing many unique management challenges. One of the challenges is that the management environment is constantly changing and leadership roles rapidly evolving.

So there is need to maintain a strong innovative culture despite a constant influx of new employees and ever-expanding product line that must be developed in the face of limited resources.

Business expansion presents myriad issues that have to be addressed. Growth causes a variety of changes all of which present different managerial, legal and financial challenges.

Growth means that new employees will be hired who will be looking to the top management of the company for leadership.

Growth means that the company’s management will become less and less centralized and this may raise the levels of internal politics, protectionism and dissension over what goals and projects the company should pursue.

Growth means that market share will expand calling for new strategies for dealing with larger competitors.

Growth means that additional capital will be required creating new responsibilities to shareholders, investors and institutional leaders.

Thus growth brings with it a variety of changes in the company’s structure, needs and objectives.

When Marissa Mayer was appointed the CEO of Yahoo in 2012, the company was suffering from team work and diminishing quality of work as the primary motives to the company’s struggling performance thus gradually losing its market share.

She decided to take an inventory of Yahoo’s culture and work practices, assessed workforce interaction as a principal productivity driver and then realized that a cultural shift was necessary.

She says that it’s around strong Corporate cultures that you find the energy and then enhance that energy into innovation. She is quoted saying “You can take that energy around culture and find fun ways to apply it to engage users”

First change Mayer made was that employees were no longer provided the option of work from home but must be physically present in an office space. It didn’t end there, she also reformed Yahoo’s hiring policy in which she now personally reviews every new hire after they’ve been assessed by a team of colleagues.

Mayer then set her eyes focused on the mobile platform as Yahoo’s new frontier market Yahoo.

Second strategy for Mayer was to turn around Yahoo by enticing the current users; she re-launched Yahoo mobile apps, redesigned the Flickr photo service and released a cleaner search results page.

Inspired by her former employer Google often buying small companies in order to gain talented staffers, Mayer’s spin on that strategy is now a key part of her plan to turn around the struggling Yahoo and also a glimpse at how she views the company’s future.

Almost all startups Yahoo has bought were centered on mobile content, apps and services. From all the acquisitions Mayer has made, most have been shut down and talent brought on Yahoo mobile team.

She is pulling in people who are excited about mobile, people who want to build a winning culture. Her strategy is to use these companies these companies’ technology to enhance and improve what Yahoo already has.

The few companies that have survived are Tumblr, gaming infrastructure creator Playerscale and Video app Qwiki which have been integrated into Yahoo’s core businesses which are in four areas; core business (content, apps and search), Social, Gaming, Video (Chat and Conferencing).

Mayers main strategy has been to make Yahoo a company that builds products’ people are excited to use every day.

A culture change in Yahoo has now been defined that the smart, innovative workers can get some attention while others will either unlock new potential or move on to some where similar to the old yahoo.

And with her strategy, Marissa Mayer has got the markets’ attention.

Yahoo’s advertising market share may look gloomy but its focus now is on adding content and updating advert formats to their site which promises to turn the outlook around.

Recently Yahoo has announced their recent first quarter results and had surpassed market expectations, first quarter revenues grew 1% over the year to $1.09 Billion when the market was looking for revenue of $ 1.08 Billion. Yahoo has also reported a 30% growth in mobile user base to 430 Million.

A company’s culture reflects what its leaders believe will make the company sustainably successful.

For many companies, Yahoo’s “aqui-hire” strategy is capital intensive to afford, because if Mayer wasn’t able to selling part of the company shares to Ali Baba, Yahoo wouldn’t have the financial muscle to acqui-hire the promising start up.

A good contrary example to Yahoo’s strategy in expansion and still maintains their culture is Bank of America’s, which moved away from Acquisition strategy to organic growth.

In 2001 Bank of America was positioned well, its strategy of mergers and acquisitions had made the company a coast-to-coast powerhouse with significant competitive advantages, including a national customer base of 27 million households; small, middle market and corporate customers in the nation’s hottest growth markets; a diverse and stable mix of blue chip businesses; world-class executive management and a strong focus on the bottom line.

Unfortunately, the company was not so well-positioned when it came to providing its customers with the kind of world-class performance that would lead to customer acquisition, retention, loyalty and revenue growth. Account growth was always stagnant.

The then-new Bank of America chairman and CEO Kenneth D. Lewis announced a major strategic shift for the company, from growth through acquisition and merger to organic growth—acquiring, retaining and deepening profitable customer relationships.

Lewis and other top executives determined Bank of America needed a more rigorous, disciplined and comprehensive approach to process improvement and decided to adopt a quality program based on Six Sigma.

Goslee moved to change the culture by changing expectations, an enterprise-wide metric was established for customer delight, replacing product and channel centric customer satisfaction research.

Its goal was to contribute about $1 billion per year toward the company’s revenue growth and expense-reduction efforts, which was achieved, the bank reaped about $2 billion in revenue gains and cost saving.

By October 2003, Six Sigma had penetrated Bank of America’s culture; the Bank was now handling almost 200 customer transactions per second, faster and more accurately than ever, same day payments had improved by more than 36% and deposit processing had improved by 47%.

In 2004, the Bank of America reaped a record $14.1 in profits.

By 2005, online banking had became a big success for Bank of America, the bank’s 19.8 million online customers typically applied for more loans, made more deposits and were 30% more profitable to the bank than its other customers.

In 2005 when the Bank of America merged with FleetBoston Financial, creating the first banking institution with a truly national scope that served approximately 33 million consumers in the United States, with leading or strong market shares throughout the Northeast, Southeast, Midwest, Southwest and West Coast.

The success of merger between Bank of America and FleetBoston Financial was attributed to the six sigma linkage, both companies were using Six Sigma successfully in recent years to streamline processes, improve quality, efficiency and accuracy, and to free up capital for strategic investment, creating one corporate culture.

On many occasions, it been argued that internationalization (process of increasing involvement in international operations) can cause culture change.

Internationalization constitutes a phenomenon which affects the entire organization, a process affecting the entire organization, rendering the relevant organizational environment more international and calling for organizational adaptations.

But the intrinsic definition and perspective of internationalization should be viewed as an inward process whereby, it is bringing the new foreign operations within the boundaries of a firm.

The key objective for commercially oriented firms is to continuously put large efforts in give high quality products and services in the market. This leverage is not found in the targeted market during the expansion process but within the organization environment.

Firms only have to increase flexibility since customer requirements are increasingly becoming demanding, unique and volatile in order to maximize profits which require little strategy adjustments but still be able to maintain your core corporate cultures.

Why We Love Service (And You Should, Too!)

Posted on Updated on

We routinely stop at fuel stations to get some service, perhaps to add some fuel, have more oil added to the engine, perhaps for a car wash or even maybe to have a mechanic service the vehicle. I was in line waiting to be served at my local filling station and as I waited for my turn to be served. I could not help but wonder what it would take to get quicker service without compromising on quality.

There was plenty of activity at the filling station and even if it was busy, I imagined that there must be some acceptable time frame for serving a customer from the moment they drive in and stop at the fuel pump up to the moment payment is successfully processed.

As I was contemplating this, my mind wandered off to a time I first admired the intrigues and efficiency of teams in my favourite motorsport of Formula 1. Even though there is great competition between teams and individual drivers, there are some models of service delivery that can be borrowed over for our day to day experience at filling stations.

On the formula 1 race track, there is a special designated service garage area known as the “Pit”. A pit stop entails a race car driving off the race track through a designated access route to the garage area, where it will stop for a brief moment to be serviced, assesses for damages and have some components replaced as the driver takes some water to rehydrate his body and is later on released back into the on-going race.

It’s a great marvel watching the sequence of events that occur during a pit stop and by observing the minimal time it takes to accomplish those activities, it’s truly a feat of efficiency. A couple of season’s back, before some race regulations were changed by the sport’s governing body, the FIA, the pit stop’s activities looked something like this. On a race cars arrival at the pit stop, it is directed to stop at its teams dedicated location, is propped up at both the front and rear ends. There are mechanics on hand to loosen and remove wheel bolts on a tyre, a second one to remove the tyre, and the third one to replace the tyre that’s been removed with a new one and the fastens the bolts to hold the wheel in place. This happens for all four tyres, being replaced with a new set while fuel is being added to the race car. If need arise from some structural damage, there may be a replacement for a front end wing. All these activities are carefully choreographed with precision and timeliness and in flawless execution can take anything from four to ten seconds, and the driver is released from the pit stop to continue with the race.

That kind of service is mind boggling and coming back to reality, I wondered just how much of that kind of service excellence can be replicated to our day to day normal circumstances. By using some tools in Lean and Six Sigma methodologies there will be a great impact on customer service by increasing efficiency and also when waste is reduced, with waste being described as activities or processes that do not add value to the customer and also by reducing defects in these processes.

An operational audit can be done and this can look at factors such as where the revenue comes from, how the majority of customers are handled and who are the primary suppliers. Having these factors known would be great for the business so that it can position itself well in terms of operations, as well as have a good Business Process Mapping and Value Stream Mapping.

We can consider using SIPOC which stands for Supplier, Input, Process, Output and Customer in helping somebody understand a proper mapping of components of the business from front to end.  The supplier in this case is the car driver who gives the order. The input here will be fuel, lubricants and tyre pressure. The process would begin by the driver first arriving at the pump, the fuel attendant taking an order, adding fuel to the vehicles fuel tank, or air pressure to the tyres or adding lubricants to the car engine. The output should be correct air pressure to the tyres, correctly filling the required amount of fuel and lubricant levels. The customer’s requirements are that there is accuracy in filling the correct fuel type and quantity, the service being on-time and the products needed being available.

By using some management tools in Lean Six Sigma methodologies, there will be a great impact to customer service when waste is reduced and defects are minimized in the process. SIPOC defines the scope of work for a team and identifies at a high level the potential gaps between what a process expects from its suppliers and what customers expect from the process. This is helpful since it identifies potential gaps between suppliers and input specifications, and also between output specifications and customer’s expectations; thus defining the scope for process improvement activities.

In such a scenario, the greatest waste that would need to be worked on in order to create a better customer experience is the waste of time caused in waiting. This can be done by streamlining processes and making them consistent in outcome without defects or getting the customer order wrong. They will also need to remove unnecessary motion of people from their service points and can have the fuel pumps area redesigned well in order to have  lubricants, an air pressure dispenser, and water jar so that a car does not have to drive from one point to another to access services that can be conveniently offered in one place.

Cycle efficiency can be increased tremendously through such a form of organisation of the work area, being the forecourt area and the management would do well by using XY Priority Matrix, which should be preceded by the voice of the customer input. This may come from various surveys or other efforts to collect customer priorities. In such a scenario, this service station could be trying to determine how to improve its services.

Customers could indicate that “fast and easy to get assistance” is their number one priority and “more fuel attendants” as their second priority. It would be easy to identify the priorities through voice of the customer, and by listing them correctly in order, management can brain-storm on ideas that can lead to creating service improvements.

The XY matrix is a tool that will allow a team to make informed decisions by comparing two sets of information and analysing the relationship between them; and will allow you to consider a list of characteristics and visually see patterns between them. That way the team can make decisions based on data rather than opinion and most importantly incorporate voice of the customer input in decision making.

This is why we love service. We help our clients improve their performance and achieve sustained profitable growth within the global market. We believe that if clients are happy with the service or product, they will be willing to pay for it. We drive this improvement by looking into the areas of People, Technology optimization and Process improvement.

Nicholas Maina Karuere – SigmaStrat