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.

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.

The proof is in the pudding

Two years ago, the organization I work for set about on a journey of developing a culture of continuous improvement…what I now have come to realize is a culture of operational excellence.

The first primary ingredient was the right leader…yes, they clearly make all the difference in the world.

Second was having the right bus, as Good to Great would tell you. Every manager and director in the organization is motivated and ready to do the right thing. Like many organizations, getting people off the bus is easier said than done, so Don’t Fire Em, Fire Em Up, right?

The journey was clear in my mind, I just didn’t know how long it would take…since we’re still on it, it takes more than two years. However, it’s like many efforts that I’ve seen in nonprofit turnarounds, once it gets going, it’s like a snowball.

This last month has been one of, “Careful what you wish for,” type activity and I think that 2014 is going to prove to be a whole year of that.

Step one: Evaluate the current situation. Non-union, manufacturing-like, heavy reliance on strategic partnerships, excessive redundancy in non-operational processes taking up leaders time, and core process that provides the most value to the overall mission not well understood or controlled.

Step two: Fix the core process–completely map (four phases), provide a full narrative, develop templates and tracking tools, establish formal governance around process, and pilot–pilot big! First pilot returned 16 FTEs worth of man hours back to the supported business for reinvestment!

Step three: Reorganize to support key process. Demonstrated to everyone the redundancy in administrative processes that were sucking up vital time of everyone and all being done differently. Leadership discussed and reorganized to deliver on key process–eliminated siloed operations and redundant processes. Result: leaders in operations were back in the shop and the important, yet administrative processes operate perfectly now for the last two years!

Step three: Engagement! As a whole, engagement is high across the company–very high. However, engagement was not as high in this organization and it was dropping. Engagement score was 4.22 out of 5. Participation in engagement survey was 70%. Developed and implemented “Engagement Program.” Didn’t focus on the score–focused on communications, development, and quality. Next year, participation was 100% and score jumped to 4.61–even with a reorganization. Gallup interviewed my boss. We are still on our engagement journey and always will be.

Step five: Build continuous improvement discipline. Looked end-to-end at the process we were part of. Took ownership of the end-to-end problems and applied a disciplined approach to solving the problems associated with the process–given five FTEs by leadership to work on it. Focused on process excellence in work centers–all managers, most directors, and some other employees Green Belt trained. Top three strategic partners established trained and certified Green and Black Belts to drive process improvement. Held monthly lunch and learns for large portion of exempt staff. Now instituting 5S and Visual Controls. Developing operational daily metrics that provide leading forecasting insight. Looking at ways to automate and improve now. Developed a recognition program that recognizes all improvements, no matter the size, equally.

Step six: Share the bigger plan. I am moving onto another project for at least three months. I laid out the 2014 plan that was in my head for my boss. Press forward with that plan and this journey will continue.

It’s exciting times!

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