Experience-based Operational Excellence

customerexperiencepuzzle

The Customer Experience

Experience means many things.  An experience is a direct observation of or participation in events as a basis of knowledge.  In other words, the customer experiences something through observation or participation.  Experience also relates to a customer as the fact or state of having been affected by or gained knowledge through direct observation or participation.  In other words, the customer has experienced things with the company that they base opinion on.  Also, experience is related to an individual based on their practical knowledge, skill, or practice derived from direct observation of or participation in events or in a particular activity.  Customers all have different experiences that make up their background.  Individual experience is often related in the terms of degrees, certifications, and/or years of involvement in a particular thing.

In a nutshell, customer experience (CX) is something personally encountered, undergone, or lived through by a customer with a certain company.  It is the product of an interaction between a company and a customer over the duration of their relationship.  This interaction includes their attraction, awareness, discovery, cultivation, advocacy, and purchase and use of a service.

CX is simply the result of everything that makes up the company’s product or service delivery, visible or not.

Problems with Customer Experience Today

Many companies today only focus on the ‘touchpoints’–the critical moments when customers interact with the company and its offerings to establish the customer experience.  This is often depicted in marketing as an experience map.  Often, this is a narrow focus on what is important to the customer’s satisfaction at specific moments and often creates a distorted picture of the overall experience.  This can lead a company to believe customers are happier with the company’s products and services than they actually are.  This approach also diverts attention from the bigger and more important picture–the customer’s end-to-end journey.[i]

An emphasis on Operational Excellence within an company as the driver of the CX is important to carefully consider.

Experience-based Operational Excellence

Operational Excellence (OpX), as an official business concept, has not been around very long and is often misconstrued.  The best way to look at OpX is to think of it as an end-to-end enterprise-wide management practice that aligns everything in the organization toward driving excellence.[ii]  From a perspective of the CX, OpX essentially represents an organization’s focus on all things that affect the customer’s experience (see Figure 1).

 X-Based OpX

Figure 1: Experience-based Operational Excellence

     Normally, companies view CX as a result of the product itself.  Some broaden the view into the processes that impact the product delivery and many companies see OpX as nothing more than the application of process management and Lean Six Sigma improvement processes.[iii]  In reality, true OpX represents the end-to-end enterprise-wise business management.  The ‘experience’ is at the very center of where the product, process, and employee intersect–this is what the customer sees and feels.  The entire experience is influenced by high-level company strategies, internal and external communication, and employee development.  Everything within the company is supported by an innovative layer that includes technology and information.

Thus, everything in the organization is important in the CX equation and focusing simply on touchpoints will represent a lack of true focus on the CX.  From a company’s perspective, there are several representative performance metrics that are important to the overall CX.  A company cannot simply look at metrics like sales and net promoter score, but must consider all company performance as critical to the CX.  There are many things that measure the experience, but can generally be referred to as satisfaction, sentiment, and relationship.

Summary

In summary, the traditional view of CX as a stand-alone activity represents a shortsighted view of what is important to the customer.  Although much of what makes up OpX is out of the customer’s view, it all leads to the CX and must be considered and aligned.

[i] Rawson, A., Duncan, E., & Jones, C. (2013). The Truth About Customer Experience. Harvard Business Review.

[ii] Boothe, W., & Lindborg, S. (2014). Handbook to achieve operational excellence: A realistic guide including all tools needed. Ft Myers FL: Reliabilityweb.com.

[iii] Crabtree, R. (2010). Driving operational excellence: Successful lean six sigma secrets to improve the bottom line. Livonia MI: MetaOps Publishing.

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Four Types of Companies

When dealing with any organization, it is important to understand the things that are important to it and the employees. For instance, they may be focused on improving compliance or increasing revenue, but each company focuses on things that are important to it.

Knowing this when dealing with the company or their employees helps understand how they behave.

One way to examine any organization is through the lens of purpose versus process. When looking at organizations from this lens, there are four possibilities. The organization can be purposed-based, process-based, blended, or neither. How they are says a lot about how they operate.

Let me define what I mean by each of these types of organizations:

1. Purpose-based. A Purpose-based organization relies on a strong organizational purpose and reason for being. At the heart of what they do everyday is a greater reason everyone works there. Sometimes the organization defines this in their mission and vision statements and sometimes it is just known. Making money is NOT a greater purpose. A good example of a Purpose-based organization would be a philanthropic nonprofit or military organization. Their reasons for existence, even if not written down, are usually quite clear.

2. Process-based. Organizations that focus on perfecting processes to run an effective and efficient organization, are process-based. Strictly process-based organizations are focused on exceptional product or service delivery and not their reason for being. Money is normally very important to them.  Many commercial companies fall into this categor, more so in manufacturing.

3. Blended. A blended organization has a strong purpose or reason for being and operates with strong processes. Organizations with both are difficult to find, but can come from anywhere.

4. Neither. Many companies and organizations have neither a strong defined purpose nor effective and efficient processes. These organizations are quite easy to find because they are everywhere.

Kickstarter Project: Overcoming Organizational Myopia

Overcoming Organizational Myopia, stovepipes, sandboxes, short sightedness

At 2:30 pm, Central Time, on June 27, 2015, KS Project, Overcoming Organizational Myopia lifted off.  Overcoming Organizational Myopia will be a new nonfiction book about successfully breaking through stovepiped organizations to obtain organizational effectiveness.

https://www.kickstarter.com/projects/1551087231/overcoming-organizational-mypoia

The Short Story: I discovered that it really does not matter what company or organization I work with, they all have stovepipes.  What I learned is that they are a product of human nature.  The problem is that everyone wants to “break down the silos” as the typical management response. Unfortunately, this NEVER works! All you do is cause confusion and drive unproductivity as the people in your business seek to rebuild the stovepipes that make them feel secure.  This book is about breaking through the stovepipes to become an effective and efficient organization.  It respects the stovepipes and teaches you how to navigate through them using a consistent and systematic application of full-spectrum strategic and organizational methods.  The book is designed to provide you with situational examples so you can self-diagnose your organization.  Across nine areas, the book helps you identify problem areas and, like a business doctor, treat the root causes with solid business solutions.

Bad Leadership is Becoming an Epidemic

It might be me, but the more I look around, the more I am finding bad leadership. Specifically leadership apathy and leaders that lack accountability. “It’s good enough” leaders and leaders who are “just getting by.”

“Why are we seeing this,” I ask myself?

Bad leaders hire and promote bad people. Bad Leadership isn’t just destroying corporate America, but they are doing it at a record pace and doing it way into the future.

These leadership charlatans are building armies of apathy to follow in their footsteps. If you are someone that gets things done, you are kept in a position to get things done because bad leaders don’t want you–you threaten them.

No wonder more than 70% of employees are disengaged at work. Who wouldn’t be with such a sorry leadership outlook.

Often, we talk about the qualities and actions of good leadership, but I think it is important that we learn to spot bad leadership. Here are the top ten results of bad leadership:

1. The realm under the leader has little if no strategy or plan to inspire and drive people. Literally there is no vision, the purpose of the business is primarily focused on making money, becoming bigger, and taking care of itself. Any goals are developed to ensure each subordinate leader can justify their position in the strategic plan and do little to overcome barriers to a future vision. Any vision and goals are such low targets that they in most cases have already been attained.

2.  Program accountability is slowly eroding and nothing is done about it (i.e., deadlines are missed, people not qualified are in positions, reports are misleading, etc.). Expectation barely exists in the organization because targets, rules, and requirements are ignored. Organizations like audit, risk, and compliance are seen as the enemy and kept away from the organization. When there is a finding from one of these organizations, the leaders spends all resources to make it go away and cover it up, but does little to nothing to solve the root causes that created the issue in the first place.

3.  There is a complete lack of organizational performance and process management and accountability. No one knows deeper than monthly what they are doing from a measurement perspective and there is a complete lack of process focus. Everyone simply does their own thing and what little process documentation is lodged tightly in the heads of the employees and passed down like tribal knowledge. Knowledge systems are busting at the seems with senseless information without any organization. Variance across processes run rampant and unchecked.

4.  There is a significant lack of communication both internally and externally. What communication that is occuring lacks any direction or strategic intent. The leadership doesn’t even know who their stakeholders are to communicate to. The term customer is used, but they are a faceless entity that nothing is really known about. Specifications for work are all internally created and bear no resemblance to competition or what customers actually want. In some cases, the customer is seen and portrayed as the enemy.

5.  The organizational structure looks like a Christmas tree and is broken into functional and operational departments that are so siloed that the company looks like an island chain. There is little communication and less cooperation across departments. Each silo is only focused on what they do for themselves, they see everyone else as a competitor for money and manpower, and they simply throw work over the wall versus work in an end-to-end process.

6.  Education and training opportunities might exist, but there is no plan or strategy to develop employees and leaders. The activity, if it happens at all, is chaotic and clearly broken. Employees mainly spend resources to gain skill through training so they can leave the company.

7.  Operational effectiveness, based in things like defect counting, process timing, first pass yield, on time delivery, customer satisfaction, etc. is barely looked at (if at all) and nothing of substance is done about it.

8.  Leaders across the organization focus on tactical operations, ignore problems, lack methodical problem solving, micromanage work, and have little vision at work.

9.  Good, hard working employees are consistently overlooked for promotion opportunities and are kept “getting the work done.”  The great employees have either turned apathetic in the workplace, are looking for other opportunities, or have already left.

10.  Almost all the leadership and management below a bad leader looks the same. The problems above spread to every corner what that leader controls. Bad leaders conspire with other bad leaders to corrupt the entire organization because this eliminates the need for accountability. Soon, the disease has spread to the highest level executives and even possibly the president or CEO. The leadership ranks become bloated with high-paid executives who do little and hold no one accountable to organizational values.

These companies are like the undead. The disease has corrupted the body so badly that it doesn’t even realize it’s dead. It just keeps operating and destroying everything in its path. This mindless company lumber on making money in spite of itself and it decays and starts to collapse. Yet, the bad leadership are so unaware of the situation that they can’t even fathom there is a problem.

Bad leadership is running rampant in corporate America and the undead companies are lumbering across the landscape. Is there nothing that can be done?

When You Need A Swiss Army Knife in Business

Lately I have met several organizations that are at a crossroads in their own evolution. Many companies realize the importance of things like strategy, change management, process improvement, strategic communication, and employee engagement. However, these organizations are making tactical decisions on the direction of these areas versus truly looking at this from a strategic perspectives.

Instead of hiring several different individuals or creating separate teams all focused on doing the same thing, companies today should should focus on bringing all their Operational Excellence activities under one team working directly for the CEO or President of the company.  This group should be led by a senior leader that sits at the same table as the companies other leaders.

This Swiss Army Knife professional–SVP/VP, Operational Excellence–should manage things like:
– Strategy development, execution, and change
– Performance optimization through process, product, and functional continuous improvement
– Strategic communication inside and outside the organization
– Strategic human capital management to include education, training, and development and employee satisfaction, commitment, and engagement
– Information and innovation engagement

This team does not need to be big…depending on an organization’s size, it could be as small as three or four people.  However, it should leverage other support areas throughout the organization, like Human Resources, Finance, IT, etc. These organizations would not report to the position, but work with the position.

Today, some organizations have some or all of these activities occuring, but they are scattered across the organization and have very little singular direction. By bringing the functions together into a small effective team, an organization is equipped to deal with the challenges of today and the future.

Of course, the leaders of these types of organizations have to have a solid understanding of all these functions at strategic, operatiomal, and tactical levels and not focused on creating some massive sandbox of people with various skills. They need to be highly skilled with a focus on lean and mean.

Measuring the important things

This was posted last month, but I forgot to share it.

In order to run a quality organization, all you really need to measure is three things. Many organizations measure everything and anything and often, what’s being measured isn’t something you can do anything about. Learn about these big three measures and how to collect and use them to deliver on a continuous improvement culture.

http://ngs.edu/2014/11/24/cic-03-02-three-important-metrics-continuous-improvement-culture/

Blogging Weekly with National Graduate School

john knottsHappy Cinco de Mayo!

I am now a weekly guest blogger with National Graduate School.  Please check out my blog there.

Follow us as we explore how to build a culture of continuous improvement.

Building a culture of continuous improvement isn’t easy and can take a considerable amount of time.  However, it’s very possible and results can be felt within weeks of embarking on the journey.  Over John’s 25 plus years of experience, he’s developed a model rooted in strategy and designed to build this culture in any organization.  Join John and National Graduate School as we weekly explore this model and ways to drive this type of culture.  We look forward to your thoughts and inputs along this journey, so join us and watch for our future blogs about once a week with the tag line “CIC.”

http://ngs.edu/2014/05/01/building-culture-continuous-improvement/

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