From Vulnerable to Valuable

Transcription

1 From Vulnerable to Valuable Service Quality Conference and American Marketing Association

2 Goals and Introductions Our Goals 1. Present some interesting findings 2. Define the basics 3. Learn how to assess current performance 4. Translate quality s work into business accomplishments 5. Prove the value of quality 6. Help you develop plans for back at the office

3 How Successful Is Your Group? Grade A to A- Your Thoughts B+ to B- C+ to C- Lower

4 What Others Told Us Grade Customer Ratings Self-Ratings A to A- 30% 14% B+ to B C+ to C Lower 10 3

5 How Many Judge Their Department s Performance They (internal customers) aren t complaining Too much Too loudly We re very busy With activities What about our results We accomplish the goals we set But how well do we support the overall goals of the organization Can we quantify our contribution We re still here Through the last RIF, anyway

6 % Highly Likely to Repurchase Importance of Customer Satisfaction Competitive Industry 90% -- 20% -- 25% 30% Highly Dissatisfied Somewhat Dissatisfied Neutral Customer Satisfaction Somewhat Satisfied Highly Satisfied

7 % Highly Likely to Repurchase Importance of Customer Satisfaction Monopolistic Industry Hostage Highly Dissatisfied Somewhat Dissatisfied Neutral Customer Satisfaction Somewhat Satisfied Highly Satisfied

8 % Highly Likely to Repurchase When Customers Have a Choice Which are you? How can you tell? Monopoly Case Loyalty Gap Competitive Case Highly Dissatisfied Somewhat Dissatisfied Neutral Customer Satisfaction Somewhat Satisfied Highly Satisfied

9 Indispensable Groups Do Several Things Well Do the Basics Flawlessly Prove the Value of the Department Work Toward Customers Goals

10 First Key to Success: Do the Basics Flawlessly Doing the basics flawlessly is assumed and essential, particularly for a quality group It s what we preach It s reinforces our credibility Failure to execute the basics may cause irreparable damage

11 Loyalty What Are the Basics? Exceptional Customer Experience Product/ Service Quality Problem Resolution Highly Dissatisfied Somewhat Dissatisfied Neutral Customer Satisfaction Somewhat Satisfied Highly Satisfied

12 Do the Basics Flawlessly Meet your commitments Deliver the promised service or product Be on time Be on budget

13 Do the Basics Flawlessly Communicate well Give the facts, not blame Communicate in the manner and frequency that customers want (and they will be different) Provide an early heads up if the preliminary analysis shows unexpected results Involve customers in developing solutions to problems or improvements to processes

14 Do the Basics Flawlessly Remember the importance of the tangibles as indicators of intangible quality Interpersonal manner and time spent talking indicate outcome quality (surgeons, lawyers, other professionals) Paperwork (logo, accuracy) reflects quality of work for white collar groups

15 Do the Basics Flawlessly Identify and close gaps in performance for external and internal customers People Processes Products/services

16 First Key to Success: Doing the Basics Flawlessly Case Discussion

17 Indispensable Groups Do Several Things Well Do the Basics Flawlessly Prove the Value of the Department Work Toward Customers Goals

18 Second Key to Success: Work Toward Customers Goals B. Know the Industry As Well As Possible A. Know Your Customers Needs/CTQ s Business Accomplishments C. Align Department with Your Organization s Strategies/Goals

19 A.Know Your (Internal and External) Customers Needs Deeply 1. Start with VOC 2. Explore what keeps your customers up at night 3. Identify unfulfilled opportunities and CTQs

20 Better Ways to Judge Your Department s Performance In-depth, non-defensive conversations with customers (internal and external) Surveys 360-degree reviews Fulfillment of mutually agreed-upon contracts All focused on obtaining the Voice of the Customer (VOC)

21 VOC Is Not Sufficient It s the systematic translation of VOC to the Critical to Quality (CTQ) requirements Actionable and measurable Validated with the customer Weightings provided by the customer Tracked throughout the life of the project or the process And be prepared for rising customer expectations

22 CTQ Characteristics Linked to a customer need, requirement, or expectation Stated clearly, simply, and unambiguously Describe the what will be met, not the how Specific Quantifiable (e.g., respond by noon the following day, not respond quickly )

23 Understanding Customer Requirements Customers are often (unintentionally) vague Many times, you must determine what customers don't want to identify what they do want Customers' downstream activities (the customers' customers) are important to understand Not all requirements are equal in importance

24 CTQs Along the Value Stream

25 Value Stream Confectioner Coater Packager Transporter Distributor Retailer Purchaser Eater

26 B. Know the Industry As Well As Possible 1. Read trade journals 2. Attend conferences 3. Be a member of a trade association 4. Know which analysts cover your industry (and listen to the quarterly calls with your CEO and CFO) 5. Read your organization s Annual Report And your major customers And your competitors 6. Identify any emerging technologies or shifts in customer expectations

27 C. Align Department s with Organization s Strategies/Goals New product development in US auto industry Quality: Flawless products with high reliability R&D: Number of new products introduced Marketing: Accuracy of sales predictions, meeting minimum sales targets

28 Link Your Work to Customers Goals Be a partner in your internal and external customers success Share the risks as well as the rewards Know how your customers customer(s) judge their success Develop and commit to common objectives Speak your customers language Be seen as a solution provider, not a problem finder

29 Indispensable Groups Do Several Things Well Do the Basics Flawlessly Prove the Value of the Department Work Toward Customers Goals

30 Third Key to Success: Prove the Value of the Quality Department Motivate and develop great staff Manage the department budget effectively and efficiently Demonstrate the value ($) of the department Use advertising and marketing methods to communicate what the quality group has learned and accomplished for customers

31 Third Key: Prove the Value of the Department A. Have Great People B. Spend Strategically, for ROI Prove the Value of the Department C. Market the Department to Secure Resources, Allies

32 A. Have Great People 1. Hire or develop people with great Technical skills Consulting skills Communications skills 2. Recognize and reward people 3. Keep the work interesting 4. Avoid burn out

33 Consultants See the Whole Process 1. Agree on Objectives and Commit to Action 7. Monitor Impact of Action 6. Design and Implement Action Communicate and Build Relationships 2. Design and Conduct Work 3. Analyze and Report Results 5. Involve and Motivate Employees 4. Plan How to Act

34 B. Spend Strategically For ROI 1. Focus on most important work High visibility - for senior execs, important clients Tie directly to strategy High ROI 2. Have discretionary budgets for work you think is strategically important 3. Build an annual plan aligned with corporate plan

35 Negotiated Value Method 1. Discuss uses of work and $ value of the outcome $ Value: Estimate of revenues or costs $ incremental sales $ costs avoided Strategic value: Importance of decision or knowledge 2. Determine how much to spend given $ or strategic value $3 M and $30 M imply different budgets 3. Can revise estimate of value later

36 Return on Investment (ROI) Method Initially Determines in advance whether woprk is worthwhile and/or how much to spend Afterward Determine actual pay off Learn to budget better in the future ROI based on three measures: 1. $ value of business process 2. % increase in quality or outcome of process 3. Cost of quality

37 ROI Example $ Value x % Increase in Outcome ROI Lite = $ Cost of Quality Example of producing a new service $2M estimated sales from new service With improved quality, 20% more efficient production Quality costs $250,000 $2M x 20% $400K ROI Lite = $250K = $250K = 160%

38 ROI Calculation Hints Defining $ Value Lenskold on ROI - careful definition is vital Net revenues Gross revenues Net income Net customer lifetime value Use Net Present Value for multi-year returns, investment For multi-year cash flow, use NPV Validate actual ROI with post-discussions

39 C. Market the Department to Secure Resources, Allies 1. Market Department s Insights and Contributions To all executives, not just immediate clients Newsletters, summaries (handout) On-line database stressing decisions, action Meetings

40 Market the Department 2. Demonstrate Department s Value and Need for Resources Annual report with Past successes, ROI and $ contributions Future plans and resource needs Testimonials Demonstrate capacity constraints, effects

41 Market the Department 3. Be Strategic about Reporting Structure and Allies Great work is possible regardless of Who pays for it Size of budget or staff Whether quality is corporate or embedded in business line But it may be easier with certain types

42 Third Key: Prove the Value of the Department ABC Corporation Case Discussion

43 Indispensable Groups Do Several Things Well Do the Basics Flawlessly Prove the Value of the Department Work Toward Customers Goals

44 Discussion: What Will Work Back at the Office? Where are the biggest gaps back at the office? Where is the low hanging fruit? What can you control?

45 Individual Planning Goals for your department Within 30 days Within a year Within 5 years Prepare specific plans List all actions with specific steps Identify resources needed People Other Develop measures to gauge progress

46 Plan Sharing Pair off to discuss your plans (Kay and Diane will circulate) Everyone shares highlights of plans Name at least one goal with action steps and outcome measures List resources needed List possible barriers and ways to overcome Ask for input Group discussion Common themes for goals and plans Common measures Common barriers and ways to overcome them

47 Thoughts for Back at the Office Always keep your goal in mind Measure, measure, measure progress If encounter a barrier, remember: You may have to go around to move forward Move from genius to simplicity when recruiting allies Sometimes it helps to change the rules of the game Patience helps when developing new resources

48 Next Steps How can we best help you go forward? Plus/Delta (978)