APQC recently interviewed Janne Ohtonen about focusing on the customer when doing process improvement. Janne Ohtonen is a Business Process and Customer Experience Management trainer, consultant, speaker, expert & coach with over ten years of international experience. He blogs at BPMLeader.com.
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What causes some organizations not to focus enough or at all on the customer during process improvement initiatives?
Those organizations that can’t focus on the customer during the process improvement initiatives fail to do so, because they actually didn’t start the initiative with the customer in mind. Many times process improvement initiatives start from existing pain, such as too high cost base, lack of revenues, loss of market share or even complaints from the soon-to-be-ex-customers. When you start with the issues in your mind, your focus goes mainly to solving those issues. That may have some short-term benefit to offer, but in the long-term it will not be able to save the company. Good example of such situation is where a company starts a Lean Six Sigma initiative to save money by removing waste. The method will be effective enough to give savings, but it will miss the opportunities that could be gained from more customer centric perspective. However, if you start your process improvement initiative from the customer viewpoint, then you will not have the problem of loosing the focus on the customer during the initiative, because that was the whole reason to start it. So, what we are talking about here is a mind-set shift from organization centric world to customer centric world. Those companies that have started their process improvement initiatives from the customer perspective have not only seen double-digit performance improvements, but also new sources of revenues and improved customer service simultaneously. Good example of this is Tesco in U.K. which rose from near-bankruptcy to most popular retail chain in the country just by changing their perspective to giving reasons for customers to engage with their processes (“every little helps”).
You have talked about the importance of having the right goals and metrics when measuring process improvements. Where do companies go wrong in deciding how to measure process improvement?
It is very simple: You get what you measure. And also: Revenues follow customer experience. So, what you want to do is to measure and improve your customer experience to make sure your revenues will go up, because if you only measure revenues, nothing will happen to it. We know that the customer experience is created through everything organization does (i.e. processes). Therefore, we need to measure our organization so that those metrics will aid in creating the great customer experiences. Where most of the companies usually go wrong when they measure process improvement is that they focus mainly on activities. Measuring activities will give you more (or less) activities. In process improvement it is not so important, how much you improve activities (that is why I don’t believe that statistical methods in process improvement are always useful), but how significant outcomes you will create. Instead of measuring activities with charts and diagrams, it is more useful to measure the impact of the process improvement to customer experience and therefore to revenues. In some cases you can even use the same measurement methods than before, but you just change the things you measure to be more customer outcome based. The goal of process improvement should not be to remove waste, but to improve processes to create more meaningful, and therefore more profitable, customer experiences. Shorty said, measure the customer outcomes instead of internal activities and you will go to right direction.
You mention supporting a drive for perfection, combined with a tolerance for failure. What is the key to creating and fostering this delicate balance? Without naming names could you give an example of where you’ve seen this balance done successfully and where you’ve seen it flop?
This is actually a very tricky concept. We all have seen those perfectionists who thrive for the absolutely best, without tolerance to any failure. And if such happens, it is a catastrophic event with devastating consequences (at least to those perfectionists themselves). I am sure we all have seen also the other end of the spectrum, those people and companies who really don’t care if what they do succeeds or fails. Neither of these ends is beneficial at the end. I believe that in process improvement projects or even at work and life in general it is best to thrive for the perfection, but learn from the mistakes. We cannot avoid that sometimes we fail. So, best thing to do when a failure happens is to analyse it and learn from it. Like Einstein said, it is definition of insanity to do the same thing over and over again and expect different results. My suggestion is always to fail forward. I think the most successful group of people practising this concept are those life coaches and consultants who actually apply it into their lives. There are many people like John C. Maxwell, Steve Jobs and Robin Sharma who have failed in their lives many times, but learned and moved forward and didn’t get bitter. Some companies have done several bad process improvement projects, and they don’t talk about it, but they learn from them and move forward until they succeed (and that they tell in the conferences and blogs). When they succeed, you see results like Angry Birds, which is one success out of 30 failures, which Rovio had before it. I don’t think any of us need too many examples on flopping in learning from failure, because we all have done it…
Why are sometimes company IT departments not involved enough in process improvement and what is step one in changing that?
Most likely IT departments would want to be part of the process improvement, but they are rarely asked to participate. It leads to a more profound question about the role of the IT department in the organization. If their role is just to provide tools to work with, they might not be seen as an important contributor to process improvement. But if the IT department is more aligned with the business and they function as trusted advisors on the IT based business capabilities, then they are more likely to be involved. So, the IT department can have two different roles in the organization: enabler or capability. As enablers they provide the necessary technology and software to do the business. As a capability they will provide valuable insight on how to leverage technology as part of the process improvement. Probably there are no easy ways to solve this, but the step one to change is to make both sides, the IT and the business, to understand that the technology has a key role to play in developing different aspects of the business. That requires humble attitude from both sides. IT department should always be ready to ask that what is that the customer wants to accomplish with our services and then provide good technological options to do that. The business should remember that the IT department might have some knowledge they don’t have regarding potential solutions and therefore they should be part of the process improvement initiative also.
In your experience what’s the biggest reason companies are able to select the right technology to enable the process improvement they need?
Technology is not necessarily needed to enable process improvement. It definitely can help with it if used in the right way, but it can also do serious damage if used in the wrong way. Those companies who first understand what they want to accomplish with the technology and after that search for the right solution will win. The worst-case scenario is to choose some process platform with best practise process models in it and then starts to mould the organization to fit the system. Always start from the process improvement, which is aligned to customer strategy and then use technology to support that initiative. Do not get tempted from those nice promises of best practise solutions, because at the end of the day, whose best practices are they anyway? Of course that technology solution provider’s, because they are the ones who implemented and chose the best practices they sell to you. Another point supporting this claim is that if everyone has those same best practise processes, where is the competitive advantage then? Not in those processes at least. Why do those best practices sometimes work then? It has been proven that superimposing a structured method to unstructured process will bring benefit due to decreasing chaos (this is why for example Lean Six Sigma can provide results, but those processes can still be optimised again with impressive results from customer centric perspective). So, to choose the right technology to enable better process improvement starts from understanding the project at hand and then evaluating technological solutions to support creating the outcome that is sought after.