Monday, April 19, 2010

Total Customer Focus-Too Much of a Good Thing

I remember watching the news a little while back and there was a report of a health study in which the researchers concluded that drinking red wine was good for heart, and stroke risk reduction. Something about compounds quercetin, epicatechin and resveratrol found in the skin of the grapes. Great news! Several weeks later, another study showed that drinking white wine was also beneficial because these same compounds were found in the meat of the grape also. Studies like these are always being published that tell us to have more of this and less of that. Conflicting messages come from these overlapping studies sometimes, creating confusion; More red wine, More white wine, Less wine, More sunshine, less sunshine, eat certain kinds of yogurt. So what's the point of this discussion in relation to customer focus? The key message in all of this in moderation. Too much of a good thing is a bad thing. Drink SOME red or white wine to get the health benefits, however, if we drink too much, our heads and livers will protest. It is also not good to focus only on one thing. If we drink red wine and never water or milk we lose out on the benefits of those things. The same is true of a focus on the customer. Some would argue that we can never focus too much on the customer. Generally, I agree. However it can become a bad thing when we are so focused on the customer that we forget the other parts of our quality value proposition.

I have a favorite book about focusing on the customer. Its on my recommended list on my Linked-In profile. Its an older book, but I find it to be a timeless reference on flooding the company with the Voice of the Customer. The book is The Customer Focused Company by Richard Whitely of the Forum Corporation. Mr. Whitley makes several good points throughout this book. Two among my favorite ideas from this book are that customer complaints are like gold nuggets and that quality is defined by the customer. Quality is indeed defined by the customer, whether we like it or not. So wait a minute, you might be saying. It sounds like I'm arguing both sides of the arguement. The diference in The Customer Focused Company is that Mr. Whitley understands that while we need to improve our service quality and go to school on the needs of the customer, he never forgets what underlies all of this, the products and services that the customer receives as our main offering. These must meet the customer's needs as well. So not only must we improve our service to the customer and concern for the customer, but the products must work too.

This work, in addition to the experiences that I have had examining customer loyalty lead me to the recipe for loyal customers and the House of Customer Loyalty. Just so we are clear on definitions, Customer Loyalty and Customer Satisfaction are not the same thing. A satisfied customer may never buy again, or recommend us to their business associates. A loyal customer on the other hand, is our cheerleader. Loyal customers advocate for the company and are more than a little hesitant to switch brands. Satisfaction is about the experience and feelings in the past, loyalty is about the behavior in the future. We want loyal customers.

The House of Customer Loyalty above indicates the relationship of all the components of our quality management system to achieve satisfied and loyal customer. The house is built from many components, starting with the foundation and ending with Loyal Customers on the roof. We call it a house because, like a real house, it is made up of many components; and like a real house, you don't put the roof on first, you build the house from the foundation up, putting the roof on last. The foundation of the house of loyalty are the systems that support our ability to deliver consistent products, resolve issues quickly and effectively & develop new products that customers want. Only when we've tackled the basics will we be able to advance to the roof section of our model. The bottom plank of the roof is Continuous Improvement. Without continuous improvement of all aspects of our systems and products, competitors will overtake us eventually. Robust engagement with customers gives the critical Voice of the Customer (VOC) that we need to inform all of our efforts. Finally we start to reach the roof, where we must engage the right players at the customer to achieve satisfaction. Interesting plank, that one. Customer's are not monolithic, talk to the purchasing agent and they will give one perspective, the engineer a completely different perspective, and the quality person yet another different perspective. Experience says that the key customer within the customer is the user of your product. Win them over and all the others will fall in line.

The problem with too much focus on the customer is that we risk forgetting that our quality proposition must be built from the ground up starting with a solid foundation. Problems occur when we start to think that we can build the roof first and stop there and that somehow, everything else will take care of itself, or perhaps if we change our focus from the foundation to the pillars and then the roof, but along the way we have not maintained the foundation. The problem with this approach is that the recipe for loyalty is complex. Its great to focus on the relationship part of the equation, but if product variation is too much for customers to bear, loyalty suffers. If our product offering does not meet the needs of the customer, we wont get the business and there won't be any chance to build loyalty. Without systems to document the processes that need to be followed to make good product, product quality suffers. Without continuous improvement, competition will overtake us and no amount of loyalty will save us. One other point to emphasize here. There is no end to the journey. Competition is always nipping at our heels, customer expectations are always increasing. We have to keep our eye on the ball for the long term.

Customer satisfaction and loyalty are the ultimate aims of our quality efforts. We have to remember that, like a house, we have to build it from the ground up. Rest assured that if we try to build our house of customer loyalty with some of the blocks of the foundation missing or if we remove them later, the house will eventually fall in on itself and no amount of satisfaction or loyalty will rescue us.

Monday, April 12, 2010

Six Sigma Tool of the Month-Attribute Agreement

How many times has this happened to you? You’re leading a six sigma project on a transactional process of some kind, something not directly tied to manufacturing or measurement of product quality. You get to the Gage R&R step in Measure and struggle to figure out how to satisfy the requirement for a Gage R&R statistic to interpret. If that’s ever happened to you, I have a solution to this problem for you..

First, let’s discuss briefly the “spirit” of the Gage R&R requirement. The reason we want to do a Gage Study boils down to confidence and good decision making. In Measure, we do a Gage Study of the data used to generate the Project Y or Critical To Quality (CTQ) measurement. Why? So we can be confident that, as we carry that data forward to capability analysis and Root Cause Analysis in the Analyze phase, we can trust the conclusions that we will draw and the results we will see. That’s it, confidence and good decision making.

How do we gain confidence whent he data is based on a person judging the quality of a characteristic rather than an objective instrument? One way that works very well is called Attribute Agreement. Attribute agreement assesses the results of decision making by people and produces some key statistics that tell us whether the results are due to random chance or if our judgment appears to be better (or worse) than random chance. Attribute agreement produces a result that can be interpreted in a similar fashion to a traditional Gage R&R and the detailed statstical analysis can give insight into areas in need of improvement, just as a traditional Gage R&R can.

Attribute agreement analysis is an effective method for delivering a statistical interpretation of a subjective judgement decision made by people, allowing fact based improvements to be identified, implemented and measured. Attribute agreement analysis allows those leading projects without continuous data to measure the quality of that data and boost confidence in the capability of the system, and decisions that are made to improve it. For a more in-depth discussion of Atrribute Agreement including a case study where it was used effectively, including details on how to interpret the results go to this article that I wrote.

Monday, April 5, 2010

When is a Complaint a Complaint?

Complaints are one of the more controversial topics to deal with in Quality. In many organizations that I have been a part of, much effort and energy was spent not only answering complaints, but fretting over what a complaint is and is not, when should a complaint be logged, who should log it, how will it make us look, etc... Suffice it to say that complaints cause angst, and understandably so. Complaints are bad news, they cause urgent work to be done, attract alot of attention, and are nto easy to solve in many cases.

One of my favorite business books from several years ago introduced me to a new way of thinking about complaints. The Customer Driven Company by Richard Whitely introduced me to the idea that complaints are like little nuggets of gold.

While the book is a bit dated today, I still find it relevant in my work. Many organizations struggle with complaints and service levels in addition to the quality of their product and that was Mr. Whitely's message; quality of service must improve as well as the quality of product. One of the best ways to udnerstand how customers feel about both is to analyze complaints. This is difficult to do if the organization culture is reinforcing negative behaviors about complaints. Many organizations do this simply by placing a goal around the reduction in the number of complaints. Of course, the intent is to reduce complaints by solving issues. What can happen instead is underreporting out of fear of what happens to the metric and "airing dirty laundry". This is not the intended outcome but it happens nonetheless. One way that this happens is by having the people responsible for the metric entering complaints into the business system. The obvious answer is that those who interface with the customer should be trained, enabled, and empowered to enter complaints based on their interactions with customers, rather than having to appeal to someone elses judgement on what to enter and what to leave out. The easiest way to do this is to establish some simple criteria to judge when something is a complaint vs some other kind of customer transaction. The simplest criteria: Is the customer experiencing something unexpected about our product or service. If they are experiencing a breakdown in the product or service and have called to get it fixed, that's a complaint. We failed to deliver something to the customers expectations. Enter the complaint, then solve the problem and spread the learning around.