Could lack of customer orientation in Operations be the cause of poor performance?

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Is your belief in customer service failing to translate into results?

Most business leaders know that a strong focus on providing a great service to customers makes good business sense.  Sales increase as a result of good reputation, meaning that less effort is expended retaining customers and acquiring new ones.  Not only that, but costs are reduced as less effort is expended correcting mistakes and compensating unhappy customers.  This helps you to become more competitive in the market while simultaneously increasing margins and profits.

However, experience shows that knowing this at senior level and having a strong service ethos in customer–facing functions doesn’t always deliver the hoped–for result.  Deliveries of products and services can be late and/or have quality problems and costs remain stubbornly over budget.

Eyes turn quickly to the operations side of the business and questions are asked.  Don’t they realise how important this is?  Don’t they care?

Don’t the operations teams care?

Looking inside the organisation, There are some common symptoms:

• Instead of working together, there’s lots of infighting between departments.  Sales blame Operations for poor performance.  Operations blame Sales for poor information about customer requirements.  Production blames Purchasing for lack of materials.  And the list goes on.

• Departments seem to have differing agendas, each more focussed on hitting their internal performance targets than satisfying customers.

• Conversations are more about matters relating to the business than what matters to customers.

This was just the situation I faced when I took up a new role as Commercial Manager for Rover’s Body & Pressings business, looking after all its products and services for Land Rover.  We had just launched a new Land Rover product and were producing far more for Land Rover than ever before.  However, due to low volumes relative to our business for Rover Cars and Honda, the manufacturing side of the business didn’t seem to appreciate how significant that was for our business.

To make things worse, the press tools created to produce these parts were not performing as well as those for higher volumes in terms of parts per hour and they took longer to set up for each production run, so had a hugely detrimental effect on performance.

Arguments from my side about the much higher profitability of Land Rover products vs. high volume cars didn’t have an effect – that wasn’t what they were measured on!

Fortunately, the senior leadership of the organisation were pushing a much more “customer–focussed” agenda and, over time, my relationships with the production managers improved and we became much more aligned, to the point where the Land Rover products went from worst to best in terms of customer delivery and ease of achievement.

This sort of siloed thinking is often the result of conflicting goals and measures set for or within each department.  While the intentions are noble – for example, machine efficiency in manufacturing, lower prices in purchasing, more sales – the effect is that every department and team becomes focussed on what matters to them, even if it has an adverse impact on customer service.  Everyone believes that they are doing the right thing for the business, yet the overall result is far from that.  Everyone becomes frustrated, leading to increasing conflict between teams and more and more issues escalated to senior management for resolution.  A true vicious spiral heading ever downwards.

The above symptoms can be just as true of organisations that have embraced the ideas of creating a culture for operational excellence as for those still working in more “traditional” ways. 

Leaders can be modelling empowering behaviours; teams can be motivated and engaged to deliver high performance using all of the ideas from our previous articles.  Yet, without mechanisms to ensure that everyone’s efforts are first and foremost aligned to satisfying customer requirements, the organisation will experience “local pockets” of high performance without that translating to improved service and bottom-line benefits.

It doesn’t have to be this way!

What if . . . . . . ?

• everyone in the organisation did their job in such a way that their colleagues couldn’t fail?

• information or product passed on to next person fully met their requirements for carrying out their step?

• everyone was able to respond positively and quickly to customer requests?

• even when things go wrong, customers know they are cared for?

Customers will find such organisations easier and more pleasurable to deal with and, consequently, harder to leave. 

All of which will deliver the business benefits highlighted above.

The bones of a better way

The basics of creating a better way are remarkably simple, albeit it they may take some effort to change established thinking and behaviour.

Put simply, every process in the business must be first and foremost aligned to the common goal of providing what the customer needs, when they need it.  Every person needs to see their role as part of a system that serves the customer, very much like the legendary story of the janitor at NASA who, when asked by JFK what he was doing answered; “I’m helping to put a man on the moon!”

I have my own “janitor” story!  A few years ago I was working with a hospital catering team.  Part of our work was to offer menu choices more in line with patient preferences.  We were wondering how to find out what menu items they preferred.

The kitchen porter, who had been selected to be part of the improvement team, realised that he was is a great position to help as he saw all of the food that was returned.  He started keeping track – it turned out that he was a bit of a spreadsheet geek outside work – and provided valuable data to the rest of the team.

Not only did patient satisfaction improve, but there was a huge reduction in the amount of waste food!

Connecting to Customers

In my very early days with Operational Excellence — back in the late 1980s when we were undertaking our Total Quality Management training — one of the most transformational ideas I was introduced to was that of identifying who my customers were and considering the impact of their requirements on what my job was and how I did it.

This didn’t just mean the end customers for our products, in this case Rover cars and Land Rovers.  After all, they seemed quite distant to my day-to-day work even though the idea of “working to make cars safer” felt like a noble purpose.

No, what was more transformational was considering who my “internal customers” were.  What information did they require and when?  How would they use it?  What did they think of how that was currently done?  What improvements could they suggest?  All of these were powerful questions that helped me to see my role in a new light.

So helping everyone in the organisation make those connections between their role and both external and internal customers is really helpful to:

• Provide them with a very specific sense of purpose.

• Clarify their role and what is expected.

• Give a sense of pride in a job well done.

• Ensure that the requirements of the “end customers” of the organisation are met or exceeded.

Four building blocks for a customer focussed organisation

1. Clarity of communication

A key starting point is that all organisational communications should continually reinforce the message of who we are to serve – customers, colleagues, shareholders and wider society, and why that matters.

It must be clear that a service ethos is a foundational part of the company philosophy and values.  It should appear in the vision and mission statements of the organisation.

2. Senior management commitment and modelling

Like everything else we’ve talked about in this series, creating a customer–centric culture starts from the top.  If the but in the words and actions of senior leaders don’t match the printed statements, everyone else will get mixed messages about what really matters.

There are some significant questions that should be asked:

• Do senior leaders talk more about satisfying customers than internal issues of shareholder value?

• What measures get most attention – customer service or efficiency, cost etc?

• What opportunities are created for everyone to understand the customer perspective – stories shared, opportunities to interact directly with the customer and so on?

3. A value stream focus

One client I worked with had a major issue with creating new customised packs of consumable materials for its clients – each new pack was taking many more weeks than expected, often due to poor flow of information between various functions and teams causing delays.

Over a two day workshop we supported the teams to map the overall flow and see how they could improve the information collection and communication at each stage.

Rather than complicate matters and add work as they had feared, everyone’s work became easier and the lead–time for new custom packs was quickly reduced by well over 50% with a clear vision of how it could be reduced to 20% of the original time with some further work.

A great way to help everyone answer the question “how does what I do add value to our customers” is to focus more on what is commonly referred to as a “value stream” than individual departments’ tasks and functions. 

A typical value stream is the one from receipt of order to shipment of product to the customer.  This requires the “flow” of material and information through the business.  Presenting this flow in a visual way is a powerful way to help everyone visualise their part.  There are a number of methods that can be used, from a simple flow chart to a more comprehensive Value Stream Map as shown in the illustration.

For each step in the process, identify the Outputs – product and information – required for the next stage(s) of the process and the Inputs necessary for this step to produce those outputs.  Taking the idea of a customer–centric culture, the “owners” of the next stage(s) can be thought of as internal customers, so the Outputs will, in essence, be their required Inputs.  Encouraging dialogue between the “owners” of each step will enable real understanding of the requirements and how well they are met, fostering good collaboration between teams towards a shared goal of satisfying the end customer.

Done well, this value stream approach will align everyone’s efforts and establish a series of collaborative relationships to ensure that all customer requirements – internal and external – are met.

4. Goals and measures aligned

Continuing the story about my first Rover production role, I learned about the unhelpful consequences of prioritising the wrong measures.  As mentioned above, the key performance measure of the press shops at the time was “parts per hour”.  This measure, unsurprisingly, led the press shop teams to prioritise those parts that were easy to set up, ran quickly and were produced in high volumes (which meant fewer time–consuming changeovers).  Unfortunately for me, none of the Land Rover parts met these criteria and, as a result, were met with reluctance.  The press shops either produced the smallest quantity possible or ran ridiculously large batches of some parts that made them hard to control. 

Over time, as the organisation got to grips with the idea of customer focus, the measures were changed such that the overall performance measure could never be more than the percentage schedule achievement, and we progressively achieved the customer orientation we were seeking.

However much we might like to believe otherwise, goals and measures are significant drivers of behaviour, whether in ways that are helpful or unhelpful.  A careful review of targets set and measures used is therefore an essential ingredient of realigning everyone’s thinking and behaviour.

For example, in a production area, measures of quality and schedule adherence are an effective proxy for customer service (provided that the schedule is a good reflection of customer demand), so should be seen to be more important than measures of machine performance or productivity.

Ready for action?

If you are experiencing any of the symptoms above, addressing them will surely be a priority. 

Our two–day Value Stream Alignment workshop is a proven way to get multi–disciplinary teams aligned to focus on identifying and satisfying customer needs in ways that promote harmony and effective collaboration between different teams. 

Facilitated on your premises or at another venue convenient to you and tailored to the specific requirements of your organisation, the workshop will enable your teams to explore their current process, align to a common goal and identify any “gaps” or misalignments in the process. 

The outcome will be a clear vision for a customer–focussed future that delivers better products and services more quickly and at lower cost.  Not only that, but you’ll have a defined set of actions to bring it to reality, improve your presence in the market place and increase your profits.

Book a call now to organise your workshop or learn more

• Email hello@veracityoxford.com

• Call 07983 743868.

• Book a slot with Calendly https://calendly.com/veracity-harvey/workshop-exploration