A satisfied customer is the best business strategy of all. – Michael LeBoeuf
In my last post we talked about “purpose” in a service firm and John Bicheno’s view that “the common purpose of everyone, top to bottom, is to improve the experience of the customer.”
Let’s start with this idea – that we are all working to improve the customer’s experience – how do we do that?
We improve their experience by delivering value.
But what does that mean?
I like Warren Buffett’s definition that “Price is what you pay, value is what you get.”
Value is a tricky thing to pin down – you know it when you see it and you know what it isn’t.
Value is an emergent property – it is created when you do things right. Things that the customer needs you to do.
As you know from the last post, this series is about reading the “The Lean Toolbox For Service Systems”.
One of the concepts in there is that of the value stream.
The value stream is where the customer gets value.
I find this hard to visualise – what is this stream? Is the customer dipping into it somehow? What are we trying to say here?
I think the reason we talk about streams is because the idea of flow is a big thing in lean – so I might come back to that.
But at this point, I think a more useful way to view how the customer gets value is thinking of value as emerging from carrying out a set of activities.
In other words, services are activities that provide value to a customer, rather than things that they get or use.
If I run a dry cleaning business, for example, value is created when the customer drops off dirty clothes and gets them back clean.
There are a certain number of activities we carry out in businesses.
- Manufacturing or construction.
- Field services or repair such a break-fix (the boiler is down, please fix it).
- Runner activities – the things we do every day.
- Repeater activities – regular or semi-regular tasks
- Stranger activities – things out of the ordinary, non-routine.
- Waste activities.
The ideas about customer experience, value, and activities are captured in the top part of the image above.
Let’s look briefly at the nature of the organisation that delivers this value.
In a service firm, the front line is closest to the customer.
When you buy a car, you’re unlikely to meet the person that finished your car door.
But you will have an interaction with the person that serves you your order at a takeaway counter.
People often think of the front line as being at the bottom of the pile – our lowest paid and most junior staff.
We should really invert this idea and see the front line as the most important people in the business when it comes to customer value.
However, it’s an inverted pyramid and their ability to serve the customer depends on how they are supported by management.
Ideally, everyone in the business will think about how to support the front line directly and indirectly.
They will be customer focused.
Often, the politics of work means that everyone is focused on what their bosses want, and end up looking away from the customer and inwards down the pyramid.
They are corporate focused.
It will not surprise you to learn that every service organisation, big and small, is bumbling its way towards figuring out how to make this structure work.
So, this is what’s happening. How can you make things better?
The first step is to understand what’s going in.
We’ll talk about how to do that in the next post.
Cheers,
Karthik Suresh
Handcrafted insight 