How To See What Is Really Going On In Your Business

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Wednesday, 10:00pm

Sheffield, U.K.

All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes. – Taiichi Ohno

I was lucky enough to attend a masterclass by the Vanguard team recently, led by Professor John Seddon about going beyond traditional command and control management and the insights in there are still sinking in.

So much of what we do can only be described as waste – time spent filling out forms, commuting, collecting figures for reports, filling in surveys or sending emails.

At the heart of the Vanguard method is learning how to see what is going on around you.

That’s something worth understanding how to do and it might make sense to work through an example.

I’m still learning this – so this might not be right, but it’s a start anyway.

1. Start with understanding purpose in customer terms

Do you really understand what your customer wants?

For example, if you’re meeting with a prospect what is it that he or she is looking for?

Are they looking for your product?

Or are they looking for a product that meets their needs?

It’s probably the latter so before you say anything about your product you should probably take the time to really understand what they need.

That might seem obvious but I have yet to see a salesperson who knows how to do that properly.

It’s an easier thing to appreciate if you look at it in the context of a break-fix archetype – a situation where something you have is broken and you need it fixing.

Essentially, you want it fixed, you want it fixed right and you want it fixed as soon as convenient.

Not it’s not as soon as possible – it’s when it’s convenient for you and that might be right now if it’s the middle of winter and your heating has broken down or in a week’s time when they’re back home from a holiday.

The reason why it’s important to get clear on purpose is so you know what isn’t contributing to what the customer sees as their purpose.

For example, none of the calls you make or reports you write or review meetings you have with your manager have anything to do with fixing the customer’s problem – from their point of view.

They just want things fixed right.

2. Understand the type and frequency of demand

The next thing you do in the Vanguard method is to study what’s happening in terms of demand.

That means starting at where the calls are coming in – a service centre for a break-fix system or anywhere else where customers call in and ask you to do something.

When they call in they usually want to talk about one of two things.

Either they want something – a product or a service – the kind of thing that makes them happy and that’s called value demand.

They want to buy something.

Or they’re calling to complain about something – because the fix hasn’t been done, the goods aren’t right or someone hasn’t turned up.

That’s a call about something going wrong and it’s called failure demand.

So, how many types of demand do you get and how many of each type come through?

3. Study the capability of your system

Now it’s time to start measuring how you respond to the demands on your system.

There’s all that demand coming in so how long does it take you to satisfy that demand?

For example, if a customer calls in wanting you to fix a problem how many days does it take from when they called to when the problem is fixed for good?

Or, how long does it take from when they place an order to get it to them?

The faster you get either of those things done the better the capability of your system.

Just think about how Amazon and Ebay have changed the buying process.

Amazon suggest that when someone buys off you that, even though you could take a couple of days to post something, you should get it in the mail as soon as possible.

For one thing, once the order is dispatched they can’t change the order.

But, more importantly you have a customer who expected to get something in three to five days getting it the next day and being delighted.

4. Map the flows and identify value work and waste

Now, if the customer isn’t delighted that’s because something is going wrong – you’re doing work that’s a waste.

Worse still you’re paying someone to first do work that the customer wants – value work and then if it’s not done right paying someone else to fix it – wasted work.

The thing to note is that in the Vanguard method you start mapping flows of work only after you’ve done the analysis of the types and frequency of demand and measured how your system responds at the moment.

After all, you need to know if you get better or not when you start to try and improve the system.

5. Start examining the system conditions

Most of the problems your customers are facing have to do with the system – not your people.

The system is almost always the problem.

The controls and structures and processes you have put in place are probably what get in the way of your employees making your customers happy.

What they’re doing is working to serve the system rather than the customer – working to meet targets, fill quotas, get bonuses and all the other things that either demotivate them or suck the intrinsic value of doing a good job out of what they’re doing.

The fact is you need to get rid of almost all that stuff that you use to control and monitor what’s going on.

In manufacturing at least you use that information to monitor the work.

In a service business all you’re doing is spying on your staff.

Instead – just help them do a good job and watch what happens to your failure demand figures and how quickly your team meets customer purpose.

6. Change management thinking

This is the hardest bit and you won’t get to it by telling the managers to change.

I learned about intervention theory at the masterclass.

This is the idea that there are two types of interventions.

Rational interventions are where you tell people why they’re being stupid.

And when you do that you shouldn’t be surprised that they get angry and offended and stop listening

The other type of intervention is a normative intervention where you help them to see what’s wrong for themselves and realise that they need to change the way things are.

That takes longer but it is a change that sticks – because they’ve decided it for themselves.

Hard to summarise, hard to do

The thing with this kind of systems intervention is that it’s a non-trivial task.

We’re so conditioned by a particular kind of goal oriented, target driven culture of organisations that it’s hard to imagine any other way.

Each step in the process is something that needs to be learned and practised and reflected upon.

And many organisations just don’t have the appetite or willpower to do that.

But if you can you could create an advantage – a competitive advantage that actually does endure.

Because if you have a business that meets the needs of your customers and your competitor has a business that meets the needs of the business – which one do you think is going to prosper?

Which one would you rather work in?

Cheers,

Karthik Suresh

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