Category Archives: Business Management

Voice of the Customer

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Voice of the Customer by Walter McIntyre

Typically, there is not a single voice of the customer.  They are fractioned into multiple groups, each with their own perspective.  Each group may also have different voices in different circumstances.

For the Six Sigma team, identifying the customer involves more than collecting information about who is purchasing the business’s products or services.  Those who purchase the products and services are just one of several customer groups.  Some other classifications are internal supplier/customer hand-offs, customers of competitors, former customers, and potential customers.

Internal customers are those who are involved with supplier/customer hand-offs within the process.  Even though these hand-offs are easy to see in a detailed process map, the process owner often overlooks them.  By taking a process point of view, we capture all of these hand-offs and are able to measure how they ultimately affect the end user (customer) of the process.  Six Sigma tools such as process mapping and SIPOC (Suppliers, Inputs, Process, Outputs, and Customers) maps are tools designed to capture these hand-offs.  We will cover these tools later.

Your competitor’s customers are another important source of voice of the customer data.  Some automobile companies, for example, send surveys to their competitor’s customers to learn why they made their choice.  The surveyor can use this information to drive changes in products and services.  The ultimate objective is to gain market share.

This leads us to substitute customers.  These customers use substitute solutions to meet their needs.  They can affect your business in one of two ways.  They can use your products and services as a substitute for that provided by an indirect competitor.  Conversely, they can use an indirect competitor instead of you.  An example would be using a passenger train to travel instead of an airline or a rental car.  All three of these business segments compete indirectly to provide the same service to the customer, transportation. These potential customers can provide an increase in market share achieved through market development rather than direct competition.

In short, there are many ways to view the voice of the customer.  The process improvement team needs a high degree of thoroughness and creativity to collect pertinent and complete information about customer needs and wants.  You must view your business or organization from the perspective of the customer.  What do they see and feel?

Each group may also have different voices in different circumstances.

For the Six Sigma team, identifying the customer involves more than collecting information about who is purchasing the business’s products or services.  Those who purchase the products and services are just one of several customer groups.  Some other classifications are internal supplier/customer hand-offs, customers of competitors, former customers, and potential customers.

Internal customers are those who are involved with supplier/customer hand-offs within the process.  Even though these hand-offs are easy to see in a detailed process map, the process owner often overlooks them.  By taking a process point of view, we capture all of these hand-offs and are able to measure how they ultimately affect the end user (customer) of the process.  Six Sigma tools such as process mapping and SIPOC (Suppliers, Inputs, Process, Outputs, and Customers) maps are tools designed to capture these hand-offs.  We will cover these tools later.

Your competitor’s customers are another important source of voice of the customer data.  Some automobile companies, for example, send surveys to their competitor’s customers to learn why they made their choice.  The surveyor can use this information to drive changes in products and services.  The ultimate objective is to gain market share.

This leads us to substitute customers.  These customers use substitute solutions to meet their needs.  They can affect your business in one of two ways.  They can use your products and services as a substitute for that provided by an indirect competitor.  Conversely, they can use an indirect competitor instead of you.  An example would be using a passenger train to travel instead of an airline or a rental car.  All three of these business segments compete indirectly to provide the same service to the customer, transportation. These potential customers can provide an increase in market share achieved through market development rather than direct competition.

In short, there are many ways to view the voice of the customer.  The process improvement team needs a high degree of thoroughness and creativity to collect pertinent and complete information about customer needs and wants.  You must view your business or organization from the perspective of the customer.  What do they see and feel?

Lean Value Proposition

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Lean Value Proposition by Walter McIntyre

The basic Lean and business value proposition in looks like this:

Profit = Perceived Value – Inherent Value

Lean process improvement projects address the Inherent Value piece of this equation. The idea is to reduce the inherent cost of production and delivery of the product or service. A common mistake that teams make is to assume that inherent value issues are not customer driven. This is a case of being inwardly focused instead of a more balanced focus (inward and customer driven).

The trick is for the Lean team to investigate the down stream and upstream impacts of any proposed changes to the business process(s). Then check those expected impacts against critical to quality concerns of the various process customers.

Remember that all processes in a business touch each other in some way.  If a change is made in one, there will be impacts elsewhere. Don’t be a victim of sub-optimization, by way of process improvement.

“I See You” Management

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“I See You” Management, by Walter McIntyre

Connectivity between human beings is the beginning of synergy.  It is written in our genetic code and expresses itself in our drive to connect to others and be part of a group. Since this is how we are wired, it only makes sense that the most effective management styles, as far as us humans are concerned, leverages this aspect of our specie’s corporate psyche.

I would call this “I See You” management. I did not coin this phrase, but since I cannot remember who did, I will use it for this post. The way I see things, “I See You” management is based upon three levels of recognition.

I see you. You are here and I acknowledge your presence. This is important to the individual because we all want to be a part of the group or team. Recognition is a powerful fulfillment agent when it comes to our personal emotional bank account. This is consistent with the conclusions from Elton Mayo’s Hawthorne Works experiments from the 1920’s.

I also see you as a person with hopes, dreams, joys and fears. A complete person fills my vision. You cannot effectively manage a person from the perspective of seeing them as an available asset rather than as a person. The ability to motivate someone comes from knowledge of their personal value proposition. Lou Holtz, as a football coach, would require the players on each special team to know their teammates full names, the names of their immediate family members and some special fact about them. Coach Holtz knew that a player would block more effectively for “Bobby”, who they knew, than they would for the “running back”, even though they were the same person.

I value you for who you are, not at the level of your title or your possessions, but instead, at the level of your commitment and effort. This is tricky ground because I am not speaking exclusively about commitment and effort at work. Although these are critical to acceptable performance at work, I also will also value you for your commitment and efforts on behalf of others outside of the work environment. A lot can be learned about someone by how they treat others. I was at a restaurant recently with a business acquaintance who wanted to join my business team. He was disrespectful to our waitress and others he encountered while there. Even though He was very respectful to me, I could see that he only valued people for what he wanted from them. This attitude did not fit our culture and I did not hire him.

In another instance, one f my employees had a habit of badmouthing and undermining others.  Just like the business acquaintance above, this employee only valued others as stepping stones for his personal career development.

The result of “I See You” management is trust. Trust is the interpersonal lubrication that allows successful organizations to tackle tough problems and weather the storms of uncertainty. It is also the glue that keeps a team from despair and fragmentation. It keeps an organization in alignment when other forces are trying to pull it apart.

In my daily walk through my business, I try to touch every employee with a message about their value to me and our business journey together. I expect them to do the same. It keeps us sane, focused and successful.

Estimating Project Timelines

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Statistically Estimating Project Timelines by Walter McIntyre

Statistics

Why is it that projects more often than not come in behind schedule and over budget? This question drives business executives crazy. Why shouldn’t there be an even split between on time project delivery and late project delivery? These are valid questions.

The answer lies in statistics and human nature. Let’s deal with statistics first. When events are independent, like in rolling a pair of dice, all possible results are independent of each other.  For example if I roll a set of two dice 20 times, I will get 20 results that range from two to twelve.  If I plot these results in a frequency plot, I will get a normal distribution (a bell curve for you non-statistical types). If I roll the dice another 100 times, I will get the same distribution. Why? Because the probability of getting a pair of 2’s on roll one of the dice is exactly the same as the probability of getting a pair of 2’s on rolls two, three, four, etc.  I could bore you with a discussion of the central limit theorem at this point, but let’s not.

Instead, let’s change the rules of dice rolling and magnetize the die so that if die one comes up 2, die number two will come up 2 also. Now the result of each roll of the dice is no longer independent. Instead the resulting sum is dependent upon whether one of the die comes up two or not. The resulting distribution of 100 rolls will be skewed instead of normal. What does this have to do with projects meeting time and budget goals?  Let me explain.

If you look at a project map, a Gantt chart for example, you will see that the tasks in the project are not independent.  They depend upon each other. For example, let’s say that task three cannot start until task one and task two are finished. This means that task three’s start time is not independent. It is dependent upon the finish time of tasks one and two. So, a delay in either task one or two will result in a late start of task three. Since there is dependency between the successful on time delivery of these tasks, the central limit theorem does not apply. Additionally, the dependency tends to push the time line to the right (late delivery).  If we were to run through tasks one, two and three 100 times, the distribution would be skewed to the right (late delivery).

The reason dependency, in this case, skews the timeline to the right is related to human nature. Estimators tend to over promise to satisfy the requirement of a bid process (work is rarely awarded to the bidder with the longest delivery time).  Workers tend to wait until the exact start date to begin work rather than start early. Surprises in the task schedule nearly always delay the completion of a task or schedule (how many times have you observed an unforeseen problem shorten the delivery time in a project?).

Practical Approach

So what is an executive supposed to do? Most look at a schedule and apply a 70% efficiency factor to it. In other words, assume the time line will be 30 % longer and more expensive than planned. Of course the more you know about a project, its customers, and the quality of your delivery processes, the better you can estimate.

Another Approach

Another approach for estimating a project timeline is using a tribal knowledge calculation.

(most ambitious completion time + (4 x the most probable completion time) + the worst case completion time)/6

I find this method to actually work pretty good. Typically you will get each of these completion time estimates from different groups.  It is also easy to sell.  One additional plus is the ability to give the results as a  date range instead of a specific date.

Entrepreneur Life

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Entrepreneur Life by Walter McIntyre

For the most part, all of us have a robust fear of failure. We are good at counting the cost of trying and failing. We are also pretty much aware of what we don’t want to lose. The result is that we miss opportunities due to not taking the risk of possible failure.

What we are not good at, is evaluating the risk of not trying. We decide to play it safe. Understand, though, you are guaranteed to fail if you don’t try. By playing it safe all the time, you limit your opportunity for success.

It comes down to balancing the difference between taking risks or taking chances. Taking a “calculated risk” is meaningful, but no one has ever heard of taking a “calculated chance”. A calculated risk is where you know what you need to do in order to be successful and you have some control over the criteria for success. For example, deciding to seek a certification in a profession field involves the risk of not making a passing grade. You control that risk with your effort.

Taking chances involves activities that put you in jeopardy in situations where no matter what you do, success is controlled by chance. For example, mortgaging your home in order to buy lottery tickets. You have hope, but understand that hope is not a plan.

The definition of an entrepreneur is someone who has a passion for seeing their dreams become reality. They live in fear of not trying. While other people fear losing something they already have, entrepreneurs fear not gaining something they want but don’t have.

So here is the point. Be an entrepreneur with your life. It is wise to be aware of the cost of failure, but at the same time, be aware of the cost of not trying.

Lean Marketing & Product Development

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Lean Marketing and Product Development by Walter McIntyre

Lean principles apply to any process based operation. I cannot think of any process that does not have non-value added components in it that create the opportunity for waste production.  In fact, by definition, a non-value added component in a process is waste.

Let’s take marketing for example and do something called lean marketing. Please remember that in a post of this size, I am leaving a lot to the imagination. Some businesses have marketing programs that start with the product/service and move outward to the customer. They call this customer focused because they do eventually think about the customer. This is not all bad because the customer is a part of the equation. The problem with this approach is that it is self-limiting.  In effect, it allows the product/service to define the target customers and, as a result, becomes growth limited by this boundary. This is the waste of missed opportunity

To balance the marketing equation, the business needs to also think in the opposite direction. That is, starting with potential customers and moving to the product/service. In this approach the potential customers defines the product/service and, as a result, is not limited by an artificial customer segment boundary.

In more detailed terms, in the product first scenario, the business defines the product/service, the price, and how it will be delivered.  Once these definitions are made, the business promotes the product or service to a targeted customer segment. As you can see, the product/service is defining the targeted customer. In a lean marketing program this is phase two, not phase one.

In the customer first scenario, the business connects with potential customers across multiple segments and establishes what the customer’s value (are willing to pay for), customer cost (price they are willing to pay), and how they expect the product/service to be delivered. Here the potential customer is defining the product. In lean marketing, we would now go the product/service side of the equation and build out to the customer.

Additionally, every business needs to realize that with the internet and social media, potential customers can easily compare products and services across multiple suppliers. This means that they can easily find the product or service that best fits their wants/needs. By using the product/service to define the customer, the business self-eliminates from non-targeted potential customers.

If instead, the business first allows potential customers to define the product/service (phase one), the product/service can be tailored to fit different customer segments (phase two).  This in turn allows the marketing program to be tailored to target multiple customer segments. This tailoring takes advantage of the internet and social media by addressing the specific needs of different customer segments.

I look at this as an application of Deming’s “Plan-Do-Check-Adjust” cycle. Define the potential customer’s needs, apply what you learned to the product/service, evaluate market effectiveness, and use the evaluation to find improvement ideas. This process is like a wheel that continually turns over and over again throughout a product/service life cycle. The result is better performance and a longer product/service life cycle by way of waste reduction.

As a final note, this approach is synchronized to the development process. The PDCA cycle, focusing on the customer first, will help to prevent misunderstandings (waste) and missed targets (waste) because the customer becomes a key part of the development process. The more times the PDCA wheel is turned in a development project, the more input the customer will have, the less likely the development team will miss the target. The target in this case is the right product/service being delivered to the customer at the targeted project cost and profit margin.

Managing an Innovation Team

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Managing an Innovation Team by Walter McIntyre

Innovation is as much about failure as it is success.  Innovation thrives in a culture that is open to challenging the status quo and allowing employees to make mistakes as new ideas are generated. Organizations that do not tolerate failure simply cannot innovate in a way that we would call successful.

Managing an organization that has an innovative culture can be stressful, as there is bound to be friction as new ideas rub up against established ways of doing things and other employee’s ideas. This friction is good if managed right.  This means creating a safe environment for commenting on ideas, introducing ideas and “sharpening the sword” against each other.

Here are a few tactics for creating and maintaining an innovative environment.

Demand Speed

Faster completion of project tasks and phases, ideas backed by “one pager” documents, short meetings that have agendas and “cut to the chase” will underscore how business is done. Innovation is sometimes based upon rolling out ideas, testing them and moving on as quickly as possible.

Define the Gap

By defining the gap or opportunity where you want to focus your energies, you can keep the team on target.  Make sure that the customer plays a part in defining the opportunity or gap. The ultimate waste of time is to work on something that the targeted audience does not care about.

Get Outside the Box

Spend more time listening to customers (and potential customers).  Spend time watching and listening to competitors.  Include mavens in the targeted markets, new suppliers and folks outside the innovation expertise window in your idea evaluation process.  The point is to broaden the footprint of your organization’s thinking.

Don’t Get Caught Up in Small Stuff

Successful writers do not edit while they write.  They get the creativity flowing first and correct later. This defines innovation in writing (a totally innovative process).  From a business point of view, focusing on the idea and its supporting, or detracting, points, is the path to innovation.  Avoid getting caught up in spelling, grammar, color, etc.  There will be time for that when you are ready to present outside the innovation group.

Be Part of the Team

One of the characteristics of a high performance work group is the lack of visible evidence of a command and control network within the innovation team.  This facilitates trust, communication and conservation of time.  When a leader is out among those they lead, there is a reduced need for formal reporting and meetings.

Challenge People to Learn

Assign employees to projects teams that are working on ideas outside of their expertise.  This enables fresh ideas to be introduced and forces more thorough discussions.  Additionally, this expands the talent and knowledge footprint for your employees.

Forward Thinking

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It is not enough to just innovate around a tried and true point of reference.  To survive and thrive you must be willing create a “new” tried and true point of reference, continuously, and in real time with the market.  I can remember when my team first introduced the asTech technology to the collision repair industry.  We were traveling to conferences doing demos for so called experts.  It was common to hear, “I don’t believe them.  It’s just smoke and mirrors”.   Most of those folks are not considered experts anymore because we moved the needle on what was possible.

 You can spend your whole career and never get a chance to make a difference in the market place.  What will folks say about you in 10 years?  Be the writer of this script, not the reader.

 The article below is example of accepting the status quo.  This is not the script I want to write for myself.

Nokia CEO ended his speech saying this “we didn’t do anything wrong, but somehow, we lost”. By: Ziyad Jawabra

Nokia CEO ended his speech saying this “we didn’t do anything wrong, but somehow, we lost”.By: Ziyad Jawabra

During the press conference to announce NOKIA being acquired by Microsoft, Nokia CEO ended his speech saying this “we didn’t do anything wrong, but somehow, we lost”. Upon saying that, all his management team, himself included, teared sadly.

Nokia has been a respectable company. They didn’t do anything wrong in their business, however, the world changed too fast. Their opponents were too powerful.

They missed out on learning, they missed out on changing, and thus they lost the opportunity at hand to make it big. Not only did they miss the opportunity to earn big money, they lost their chance of survival.

The message of this story is, if you don’t change, you shall be removed from the competition.

It’s not wrong if you don’t want to learn new things. However, if your thoughts and mindset cannot catch up with time, you will be eliminated.

Conclusion:
1. The advantage you have yesterday, will be replaced by the trends of tomorrow. You don’t have to do anything wrong, as long as your competitors catch the wave and do it RIGHT, you can lose out and fail.

1.     To change and improve yourself is giving yourself a second chance. To be forced by others to change, is like being discarded.

Those who refuse to learn & improve, will definitely one day become redundant & not relevant to the industry. They will learn the lesson in a hard & expensive way.

Building Great Teams

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I did some research on team building recently.  What I found were lists of qualities that define effective teams.  The problem is that these lists are typically filled with descriptions of characteristics that are superficial.  I can say, or do, whatever is necessary, when it is necessary, so that I look like a great teammate on a great team.

I believe that building a great team requires great teammates. It is much more personal than a list of qualities. You do not want to build a house on a foundation of sand and you do not want to build a team on a foundation of individuals whose sole focus is on their own personal value propositions.

Dwight L. Moody said that “Character is what you are in the dark”, meaning that you express your true character when your potential duplicity is difficult to discover. You express your character in what you do, not what you say.

I like to associate teammates to shipmates.  This association strengthens the concept of teamwork.  When at sea, if the ship sinks, everyone gets wet.  In the most powerful definition of teamwork, everyone succeeds together or fails together. There are no special cases, unless someone places their own goals above that of the team.  This would be called sub-optimization.

You cannot build a great team from individuals who make excuses, criticize, are too busy to help others, or are unwilling to step out of their comfort zone.  In Warren Bennis’s book “Organizing Genius”, he describes the characteristic of great teams like the Skunk Works, Disney Studios, Apple, and the Manhattan Project.  These teams were built on personal sacrifice, cross functional activities (folks worked on what needed worked on no matter whose job it was), a commitment to each other and the project, a lack of respect for outside authority, an intolerance for individuals who did not fit the culture, and a supreme belief that they comprised the best of the best as a team.

What kind of shipmate are you?  The quote below is from a man who served in every branch of the military.  He was known for his ability to build successful teams in difficult circumstances.

“You gotta stop and think about your shipmates. That’s what makes you a great person and a great leader – taking care of each other. You’ve got to think — team. It takes a team to win any battle, not an individual.”  Courtland R. “Corky” Johnson

Building New Skills

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Much of our frustration with personal development comes from our failure to establish short term goals.  This frustration springs from a failure to understand that the learning and development of skills is typically an evolutionary process.  Your brain learns by building neural connections over time, by way of practice and integration into your current understandings and skills.

Maybe you want to learn to play a musical instrument. The first day you pick up the instrument, you will not play it like a virtuoso.  You correct for this by expecting a certain level of accomplishment for each practice.  Meeting this goal gives you a positive view of your efforts.  You repeat this cycle over and over again, like climbing a ladder.

The excuse, “It’s too hard”, is usually based upon unrealistic daily or weekly goals. It is exceptionally difficult to eat the elephant in one bite.  You have to break it down into manageable pieces.

Another example might be reading a text book.  Your goal for the week may be, “I need to know Chapter 5 for a test this Friday”, but what is today’s goal, tomorrow’s goal, and so on?  If you want to feel good about your progress, divide and conquer the material.

  • I need to understand section 5.1, Monday.
  • I need to understand sections 5.1 and 5.2, Tuesday.
  • I need to understand sections 5.1, 5.2 and 5.3, Wednesday.
  • I need to understand sections 5.1, 5.2, 5.3 and 5.4, Thursday.
  • I need to be ready to take the test Friday at 2 PM.

This process allows you to feel a sense of accomplishment every day. Your focus is on what you need to accomplish right now, instead of what is needed for the entire week.  A smaller bite yields a less stressful and more fulfilling experience.  It also allows the pieces of the material you are learning right now to “sink in” before you learn the next piece (text books are written around this type of learning model).

Here is how you do it. If I am asking for 3 ½ hours of your time per week to work on something, that is only 30 minutes a day.  Thirty minutes a day is easier to manage than 3 ½ hours at one time, and it is more effective.

If you are learning golf, taking a long trip, learning a new skill, etc., break the whole into pieces. Then you can knock them out one at a time until you reach your goal.  This involves living in the moment.

  • In golf, you can’t hit the ball like a pro, who is hitting at least 100 practice balls a day, by hitting 50 competition balls a week.
  • You can only drive the stretch of road you are on, no matter how much you want to think about the last mile of your trip.
  • You break old habits, and form new habits, by repetitive actions and thoughts.
  • You learn new skills by practice.

You can institutionalize imperfection by practicing something imperfectly, thereby making a bad habit.  You can institutionalize perfection by practicing something perfectly, thereby making a good habit.  Have you ever seen someone with perfect form, great patience, or great instincts?  They got there by way of perfect practice. The training of their mind and body to accomplish the goal right in front of them.