The Top 5 Success Factors of All Time
Part 4: Operations, Or What You Do All Day
Recently we conducted a Customer Value & Satisfaction Survey for a small-business client. His customers told us that they were generally satisfied with the company’s people and professionalism, but they felt improvements were needed in quality control, attention to detail and follow-through. These are common operations issues, though by no means the only ones, concerning what your people do all day. In this post I’ll share with you what I’m telling my survey client, and what I’d tell you if you want to improve your operations and success.
1. Improvements must be driven from the top. Operations improvements cannot be delegated to a committee (unless you lead it) or left to a consultant’s intervention. You as the manager-leader model the corporate culture of those who report to you. So you must have a passion for operations improvement in your gut, or it will not get very far.
Essentially changing any organization requires a new energy force moving in a direction different from business as usual. You might conjure up that energy within you just by thinking about how messed up your operations are. Or maybe you get the results from a customer survey that shows distinct dissatisfaction. All too often it takes a crisis like a big drop in income or the loss of a major client to shake an organization into a state of readiness for operations improvement.
In his excellent book Leading Change*, John Kotter advocates that you stimulate energy by creating a sense of urgency. Maybe there is indeed a crisis. Or maybe you engineer one to make your point. However you get the energy going, you have to drive it.
2. The fundamental purpose of operations is to align what people do all day with what customers value. In recent posts we’ve talked about the importance of customer value. If you want to improve your operations, then build a system to guarantee the value which customers want. If your customers want quality, build a system that checks quality at every key step, not just at the end. If your customers want speed, study ways to cut out time-wasting steps and replace them with consolidated simpler ones, perhaps using computer systems to make things move faster.
The key point here is, don’t just look at your operations and ask yourself, “How can we improve this?” Start instead with what customers value most, step back from day-to-day habits, and try to design an ideal system for delivering that value consistently. Again you’ll find some excellent tips on this in Bradley Gale’s Managing Customer Value*. I also recommend reading at least one good book on Total Quality Management, such as the Portable MBA Series’ title by that name*.
3. Involve your people in operations improvement. Don’t come down from the mountain like Moses with your new Ten Commandments. Let all your people get involved in analyzing and designing how operations can be improved to deliver greater customer value. It never ceases to amaze me how “ordinary people” can come up with great insights for improving operations. After all, they’re often the ones closest to the action, or the ones who hear the complaints. Involving your people will not only yield a much greater abundance of good ideas, it will also greatly strengthen the likelihood that improvements will happen.
If you have a big company and it’s not practical to involve everyone in the whole change process, then organize what John Kotter calls a “guiding coalition.” This is not just the top people but a cross-section involving all levels. Be politically shrewd and include people who have a lot of personal power and influence at lower levels even if they are not managers. Consider involving even your chronic rebels. They often have a lot of energy and strength, and by being involved in the improvement process, they will come to support it and advocate it with others.
4. Measure what matters. Some companies have found a comprehensive measurement system like The Balanced Scorecard* to be a great way to measure performance of all the success factors we’re writing about in this series. Others try to measure too many things and get bogged down in minutiae. I recently read about a financial company that expected managers to monitor and be judged based on over 200 measurement points. So the trick is to pick just a few key indicators of improvement, count them religiously, and share the results.
I like the analogy of driving a car with simple measurements such as the speedometer, odometer, gas gauge, and warning lights which only flash when something is wrong. In fact some people use the term “dashboard” to refer to the ideal small set of measurements that help people stay on course. (Contrast that with the controls of a 747 jet, which require a crew of people to monitor and control.) For example:
- If you want to improve quality, count mistakes as well as fault-free results.
- If you want to improve speed, track cycle time, how long it takes your people to complete a defined task.
- If you want to improve customer satisfaction and retention, track complaints, or better yet do a frequent short customer survey that is meaningful enough to allow specific feedback, not just a generic restaurant-type card. Be sure to seek information on changing customer needs and preferences or your 2001 system will be obsolete in 2002.
It is amazing how just the simple act of measuring a performance indicator and posting the results with either a chart or on your internal computer network can motivate people to do better, especially if there is a clear link between their own performance and one or more indicators. In fact it is very important for people to understand that linkage. Ideally individual performance is also measured and rewarded in terms consistent with your corporate measurement system.
5. Control products and services differently. If you are a manufacturer, controlling operations by measuring physical products is a piece of cake compared with measuring services. Most books on quality, operations or business process improvement are written from the manufacturing perspective. If you’re in the service business, don’t think these books are going to do you much good. A few determined service businesses have indeed been successful with TQM or ISO9000, and my hat’s off to them. But the amount of time wasted by service businesses (including mine) trying to adopt manufacturing-based operations methodology is staggering.
One of the best, classic books on service quality is Delivering Service Quality* by Valarie Zeithaml et al. This research/authoring team was the first to define service quality as a matter of “balancing customer perceptions and expectations.” Since then there have been a bunch of books on the subject, as you’ll see if you type “service quality” into the search window at amazon.com. Service quality essentially:
- Is a matter of customer perceptions; for them perception is reality.
- Can be influenced by carefully managing customer expectations.
- Is individualized for every company, based on their customer relationships, skills, history, community, competitors and many other factors. So you have to chart your own path, but ask your customers which direction to follow.
*References:
Managing Customer Value: Creating Quality and Service that Customers Can See: http://www.amazon.com/exec/obidos/ASIN/0029110459 /wwwlciwebcom
Leading Change:
http://www.amazon.com/exec/obidos/ASIN/0201154935 /wwwlciwebcom
Positioning: The Battle For Your Mind:
http://www.amazon.com/exec/obidos/ASIN/0446347949 /wwwlciwebcom
The One to One Future : Building Relationships One Customer at a Time http://www.amazon.com/exec/obidos/ASIN/0385485662 /wwwlciwebcom
The 5 Key Success Factors: A Powerful System for Total Business Success
http://www.amazon.com/Key-Success-Factors-Powerful-Business/dp/1257156543/