Critical Thinking Blog
“Critical thinking is the intellectually disciplined process of actively and skillfully conceptualizing, applying, analyzing, synthesizing, and/or evaluating information gathered from, or generated by, observation, experience, reflection, reasoning, or communication, as a guide to belief and action.”
These blogs are our critical thinking on current events, cultural transformation, leadership, customer-centered excellence, strategic planning & more.
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A recent TV ad shows a bank being robbed. As customers are commanded to throw themselves on the floor, the still-standing guard tells the customers the bank is being robbed. One of them asks if the guard is going to call for help. He informs them his job is to monitor bank security, not assure it.
The humor of the vignette, and the absurdity it evokes, can easily be applied to the world of complex organizations and our efforts to seek improvement. We conduct satisfaction surveys, create balanced scorecards, install auditing systems such as ISO 9001 and Baldrige Criteria, use net promoter scores to compare ourselves with competitors and take other measures to monitor how well we are doing with customers. As with monitoring a bank robbery, it can make leaders feel better while creating a false sense of security.
Our leadership mission to achieve mastery of customer-centered excellence starts with acceptance of the evidence: “Managers Often Fail to Use or Understand Their Own Data on Customer Satisfaction”. Such is the conclusion made by co-authors at Indiana University who used results from 70,000 Customer Satisfaction Index surveys, ASQ Survey. Among the findings is that managers spend heavily to capture satisfaction data that, when received, is misunderstood, minimized, and misapplied to strategic imperatives that could achieve excellence.
Our own research over more than twenty years goes even deeper in revealing key elements of the problem for leaders, including their struggle to:
- Incorporate customer priorities and related measures of success into the enterprise strategic plan.
- Provide all employees with a method for unambiguously determining who “the customer” is, relevant to the real work they do.
- Refer to all work as products (not just what gets sold) which can be designed for excellence.
- Shift enterprise preoccupation with process improvement to put customer-desired outcomes first.
- Assure questions asked of customers (whether by survey, focus group or dialogue) include their objective performance, subjective perception and desired-outcome expectations for every product produced within the enterprise.
- Remove ambiguity and misalignment of core values, measures of success and recognition or consequences.
Inventor Charles Kettering famously said, “A problem well-stated is a problem half-solved”. Albert Einstein said, “If I were given one hour to save the world, I would spend 59 minutes defining the problem and one minute solving it.” Leaders wishing to follow this sage advice, should take a look at the strategic plan. You will likely notice we generally articulate what we can call producer-desired outcomes and measures reflecting things like market share, sales, capacity for growth, cost reduction and profitability. Where are the well-articulated customer-desired outcomes and measures of success? Such outcomes for financial services firms, healthcare providers, hospitality firms and departments of highways could include, respectively, the following:
- Increased wealth
- Wellness and good health
- A good night’s sleep
- Stress-free arrival at the target destination
It is rare for such priority customer outcomes to be identified or defined in the strategic plan. If we don’t define them, what is the likelihood we have created measures of success? Not so good. That means we have not defined the problem, as Kettering and Einstein would instruct. We also rarely ask questions about them in our satisfaction surveys. With no measures of success, what happens to goals for improvement? There aren’t any. It is this very information we need to drive the proactive pursuit of excellence.
Get a quick picture of where you currently are in mastering customer-centered excellence in 5 minutes at C3IQ. Expect to see ideas that will visibly support your success on the first and last of the six bullets above. To address the others, you’ll find it helpful to see Voice of the Customer in a Widget-Free World.
Financial executives generally pride themselves on knowing what incurs costs. So it would probably come as a surprise to discover that the most valuable work is least likely to be measured, managed or subject to rigorous improvement. Suppose the dollar value of that surprise is at least twenty percent of the total enterprise labor cost. Would you care? If you could invest $100,000 and get a return of $1,000,000, would it be something worth exploring? Answering yes to either question recognizes a goldmine at your fingertips.
The financial executive embedded in the normal dairy farmer’s brain knows both the cost to produce one gallon of milk and the unit price it sells for. The same insight is common for the owners and executives of the manufacturing firm that makes fasteners. They know the unit cost of both their biggest bolts and their smallest thumbtacks. Farmers have had about 10,000 years to get this cost business figured out; manufacturers have been at it for about 250 years. Together, those who personally produce agricultural and manufactured products account for no more than 15% of the American workforce. The other 85% of us in the knowledge age do work we don’t even think of as products, let alone measure them that way.
It turns out that executives and professionals in complex organizations produce products, too. A product is a highly specific deliverable you can make plural and count. If you can’t make it plural with an ‘s’, it’s probably not a product. Plans, strategies, reports, budgets, emails and answers are classes of knowledge products. When asked how much time is spent producing answers, most will say at least 80% of their day is consumed that way. Even attending meetings can be considered time spent learning answers to questions, some that may not yet have been asked. Emails are how many answers are packaged.
If we were the financial executive of a manufacturer making bolts and thumbtacks, we would be viewed as derelict in our duties if we permitted the number, yield, cycle time, labor time and unit cost of bolts to go unmeasured. Ditto for thumbtacks. Of course, both are produced by line workers making close to the lowest hourly wage paid by the firm. There are fewer and fewer of these kinds of workers in today’s economy. So we are measuring the lowest skilled work performed by increasingly fewer people.
Meanwhile, those of us in the office produce emails that are not likely to be counted in any way. Would an email cost more to produce than either a gallon of milk or a thumbtack? You bet! By calculating the hours spent per day by everyone creating emails, we will get a gigantic, previously hidden, cost number. We still wouldn’t know the cycle time, yield, recipient satisfaction or error rate, but we can guess that the opportunity to better manage our knowledge assets is enormous. And that doesn’t even start to address what a well-designed email should be like. We don’t have written designs for excellent emails. Imagine if Boeing built planes with no designs.
A typical client organization uncovered the cost, time and satisfaction of several of their most important, mission critical knowledge products. The findings caused them to redesign each product, saving over $2 million for just one product in the first eighteen months. And the customers overwhelmed them with compliments for making the products easier to use.
We need a hall of fame for executives who practice what farmers have known for eons. Want to know more? Contact me at rob@C3excellence.com
How do you set, communicate and assure your intended goals are achieved by others? Master that with clarity and high impact and you are a genius. If it were that easy to do, you wouldn’t be getting the big bucks. Let’s make it even easier.
Start with a simple but powerful framework to link all your goals together. Consider three core topics: outcomes, products and processes. Linking each goal to a specific one of the three creates a level of consistency and simplicity that clarifies your focus. It also enables you to check that you have the balance you want. For example, if every goal concerns process, those hearing the goals can easily conclude you don’t think outcomes or products need any direction or are unimportant. This overemphasis on process just happens to be a common malady among leaders and tends to dampen attention to both innovation and customers, which depends on clearly articulated outcomes.
Use a framework such as the 8 Dimensions of Excellence and its attendant measures of success, to simplify your own goal-setting emphasis. This helps you clearly see whose interests your goal is aimed to satisfy: those of the enterprise, customers or society at large. All goals are not of equal priority and, if you don’t state what those priorities are, be prepared for others to make those decisions in a way you may not like. Make sure you continuously emphasize which of your stated core values and strategic goals has the highest priority. The CEO of a major wood flooring company had goals for profitability and sustainability. Those are both desired outcomes (Dimensions 5 and 1, respectively). Managers were given goals for both but were compensated for profitability and cost-cutting. That led to business practices that negatively impacted sustainability. The firm was fined $13 million by several federal agencies for destroying habitat of endangered species. The CEO took an early leave. His goals for Dimension 5 were interpreted as of superordinate importance. The recipient(s) of your goals should not have to guess about your relative priorities. In other words, drive out ambiguity!
Make goals personally relevant to the recipients. At a high level, one of the most effective ways to do this is assure you have a policy in place that is aligned with the goal and the related enterprise’s core values. For example, it is the rare modern leader who has not stated that customer satisfaction is one of his or her top priorities. There may even be a goal to achieve “top box” satisfaction scores. However, it is very, very common to find that there is no written customer satisfaction policy in place. There are often plenty of other policies covering issues such as hiring, money management, purchasing and a myriad of operational concerns. With no customer satisfaction policy in place, how important can satisfaction really be?
Another way to engage others in pursuing your goal is to relate it to the product(s) an individual or group of individuals produces. This means all work has to be defined in terms of deliverable products (nouns you can make plural). Doing so shifts the default focus from process, activity (verbs) and operations to deliverables some customers (internal or external recipients) want. This assures there is always a customer-focused element included in such goals. It also makes it easier for employees, suppliers, partners or anyone else supporting the enterprise’s work to strengthen the line-of-sight connection between their work and that of the enterprise. It creates a natural bias away from efficiencies that contribute little or nothing to effectiveness, thereby enhancing both the performance of the enterprise and the customers it seeks to satisfy.
Want to know more? Contact me at rob@C3excellence.com