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November 1997 Volume 2.03
The Alternative
If the concept of the internal customer is extremely
limited in the degree of improvement it allows to be delivered,
then what would work better? Consider the case of an information
technology division providing the computer services to the customer
services division operating a customer call centre handling outward
and inward calls.
With the customer supplier model it would be quite
normal for the two departments to negotiate an agreement where the
information technology division agreed to have the computers "available"
for 99% of the time. This type of target is usually achieved.
While it sounds good service, at best it means that
computers will not be working for 14 minutes every day (1% of 24
hours X 60 minutes). The computers sometimes grind along slowly,
virtually unusable by the call centre staff but they are still "available".
If the computers are "unavailable' for a continuous period
of 14 minutes in a peak calling period such as a Monday morning
then it would be quite likely that the call centre division would
take over a day before it was able to provide good customer service
again.
With the Customer Value Management approach we put
the paying customer on top. The service standard required from the
Information Technology Division is determined by the needs of the
paying customer.
At every interface point a line of visibility is established
so that the process performance can be measured using service metrics
with a golden thread linking customer needs to the internal workings
of each department. The Information Technology Division would be
measured on the percentage of time that the Customer Services Division
could not operate normally due to computer problems.
Improvement work driven off this requirement that
has a golden thread to the paying customer will deliver maximum
business benefit overall.
The Golden Thread
While Internet Company X has adopted the 'internal
customer supplier' model, its Competitor Company W has benchmarked
best practice companies and decided to introduce the golden thread
approach. As Company X is operating in a low cost - average quality
position on the Value Map it has decided to initiate performance
improvements that will enhance its positioning with a main focus
on the business market.
For the process of installing a high capacity Internet
link they have sat down with their major customers and found out
the customers wanted the link installed. The customers told them
they wanted Company W to be:
From these customer needs Company W worked out a set
of service metrics covering all critical lines of visibility between
each of their departments. The service metrics were established
in such a way that there was a golden thread running from the customer
needs through each line of visibility. The set of metrics was built
into a single service level agreement that covered all of the departments.
Instead of training everybody in the new techniques it had adopted,
as Company X had done, Company W decided only to train the people
that needed to know the service measurement techniques.
These actions provided a framework for Company W to
work to, so that all Departments could work together providing value
for customers at the lowest overall business cost.
Outstanding Performance by Outstanding People
I have long been a great admirer of Federal Express.
While FedEx sometimes has some service bumps, in general they provide
an amazing level of service delivery by focussing on technology
and people. While their Service Quality Index and Survey Feedback
Action measurement approaches are fairly well known, there seems
to be less material published on their recognition systems. I recently
called in on FedEx Great Britain to look at how the "purple"
culture had been transplanted from the U.S.A, and how the recognition
systems worked.
One simple technique that they use is the Quality
Success Story (QSS) Presentations and Luncheon. The objectives of
these luncheons are:
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Improve service through quality achievements
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Lower costs by impacting bottom line results
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Encourage and promote the replication of best
practices
No woolly 'Quality' objectives here. Everybody knows
precisely what the luncheons are intended to achieve, and they have
measured $100 million in bottom line savings from the 1100 people
with successes recognised at the luncheons. The projects submitted
for review must have been working for at least 90 days and have
been approved at Senior Vice President level. The evaluation committee
is formed from employees across the company.
When appropriate, customers who have been involved
in the performance enhancement projects attend the presentations.
While the main recognition comes from making the presentation in
front of peers and other FedEx people including senior managers,
the meals themselves are quite tasty too.
Regards,
Rodger Gallagher
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