Probably the most important aspect of management's approach to purpose is to ensure a shared understanding of the logic of the organisation and its role within the larger business and market system.
The diagram on the right shows the "Why-How Charting" approach to achieving this. Why-how charting helps to develop a consistent logic within the organisation and to share and reconcile management's (often quite disparate) understanding on what is important and why.
Other means of developing a clear sense of purpose within the organisation are:
Training, to develop an attitude of seeing the customer as important, and to provide skills in developing a clear understanding of the service required.
Inverted Pyramid, which helps to challenge traditional perspectives of an organisation into one more focused on customer service
Core Competences, which help the company to think through where its main value-add strengths lie, and to thereby gain a clearer focus on its purpose
Customer Surveys, and workshops help break through outmoded paradigms, and identify new opportunities to work together to add value.
Voice of the Customer (QFD), a tool which helps to ensure clarity of purpose (in terms of customer requirements) is designed into products and service
Kano Analysis, which helps people develop a greater insight into customer service
Customer Clinics, which develop a better understanding of the customers relationship to the product and service the company provides.
All of the above approaches serve to develop a greater clarity of purpose - some at the top level of the business, others at a more detail level of working that out in practice. Please click on the diagram below (or on the associated text) to explore the various approaches that have been used to establish a greater understanding of 'Purpose' within organisations.
Customer Survey, Voice of the Customer (QFD), Kano Analysis, Customer Clinics
Why-How charting is a means of thoroughly exploring the logic of the company, and why it does what it is endeavouring to do.
The process of why-how charting is relatively simple. It starts by sticking up (usually on a sticky note) a current objective of the business. The question is then asked "Why is this our objective" and the answer(s) to this question are phrased as further objective(s) and placed as sticky notes above the first. The sticky notes are then linked by arrows coming out from the first stick note and into the new ones. The same question is then asked of these new objectives, and the process continues. At appropriate points other current objectives are introduced into the process, and are linked as before - but in this case the links may be made to existing sticky notes. At the end of the process there is normally a clear 'over-arching objective' into which all other objectives are linked. The arrows represent the why-how nature of the chart - their heads indicate why an objective exists, and their tails represent how an objective is to be achieved.
The process is rarely straight forward, and often requires a number of redraws, as new insights are gained. It is best undertaken by the management group, and will take as long as is required for the group to reach agreement on the rationale for the objectives. At the end of the process the team will have begun to understand the relative importance of the objectives they focus on with regard to their colleagues objectives, and will have built a better basis for reconciling differences in their objectives.
Why-how charting helps build a team amongst senior management by defining and agreeing collective higher level objectives which individuals can see are more important than their individual goals. The process can be time consuming (half an hour at best, and over ten hours in our worst session to date) depending on existing levels of communication and teamwork, but it is inevitably cheaper than the cost of time spent in friction and inefficiency where such understanding is confused and political.
Training provides an excellent opportunity to establish a deeper understanding of PURPOSE through developing a focus on the business's customers and how to serve them. Customers represent the company's most tangible expression of purpose, and once they have been defined, PURPOSE can be interpreted to a detailed and practical level through exploring those customers needs, and how the company is best able to add value to whatever it is they do.
Examples of relevant training would include interviewing technique, handling complaints, secondment to the customer site, techniques in partnership, and general customer awareness training. The training could address both skills and attitudes. Training can be sought externally, or can be developed internally, possibly around one of numerous good training videos that are available through Melrose or Video Arts.
The Inverted Pyramid is a concept that is of most use to Management in terms of exploring their role with regard to the customer. It arose as a challenge to the 'Hierarchical Pyramid' model which positions management at the top, and everybody else beneath them. On occasion it may also be used to subconsciously show support staff as being more important than direct staff - by placing them higher on the diagram. The hierarchical model defines reporting lines but often confuses PURPOSE or 'Seeking Customer Satisfaction' with "Doing what the Boss says"
In the Inverted Pyramid the 'direct' staff are shown as working to serve and fulfil the needs of the customers. A task which they are supported in by 'support staff' whose role is to do everything in their power to make the direct staff's jobs easier and more effective. The direct staff serve the customer, and the support staff serve the direct staff.
And the management? The management's role is to serve all three. Continuously identifying where issues and events get in the way of the other's doing their jobs happily and harmoniously, and seeking to resolve them as quickly as possible. In practice Management Teams have often got a lot of value and insight out of pondering the Inverted Pyramid, and many outdated paradigms have been shifted quite effectively, resulting in a more PURPOSE oriented reporting structure and management approach.
With clarity of PURPOSE comes clarity of role. The essence of adding value in a competitive market, and of effective partnership strategies, is to have a very clear understanding about what you are good at, and to focus on that.
This becomes increasingly important as the organisation develops, becomes more dispersed, and operates with global competition.
Understanding clearly its core competences enables a company to build alliances with partners who have proven expertise in complementary skills, and enables greater clarity of roles and trust in that partnership. This extends to partnering your customers in serving their customers - a highly effective market strategy. It also enables the company to focus its staff and their creativity into the most productive areas for it as a business.
The concept of Core Competences however, will not appeal to everybody. Some will argue that it is worthwhile doing anything that makes a margin - and they will focus on the financial aspects, and do things that make money. But such focus on money often makes for weaker partnerships, and for poorer customer relations, and for less well focused staff, and ultimately for a less efficient and thereby less profitable undertaking. Paradoxically it can be the focus on money that gets in the way of efficiently pursuing the most likely sources of obtaining it, and it can be the subordination of money as a goal that can free the organisation to be most commercially effective and thereby profitable.
The Why-How chart provides an excellent means for a company to explore its core competences.
Another means of exploring Core Competence with your people (both in terms of external delivery and internal attributes) is to use the following exercise:
Customer Surveys are probably the most effective way of both determining what the customer needs, and of assessing your current performance in meeting those needs.
However, Customer Surveys have had a lot of bad press over recent years - not because they are ineffective, but because they are frequently misused as a simple and quick way of absolving the supplier of the hard work required to really understand their responsibility in meeting customer's needs.
The bad press comes from the customers reaction to being bombarded with sheets of paper that involve them in lots of work when they have little confidence that they will really see any benefits from it.
Customer surveys are key to developing a corporate understanding of your performance in serving your customers, and in getting better at it. But they do need to be done differently from the traditional shotgun mailing. Surveys are not an alternative to the face to face review of the customer relationship, they are merely the means of accurately and comprehensively recording it. If the customer feels that the supplier is investing more work into the survey than they are, and that the purpose of the survey is truly to understand the customer better, and that the survey is not a replacement for personal communication, but an aid to it, then they will normally welcome the opportunity to provide accurate feedback.
Surveys should explore all aspects of the relationship (the survey provided in the resources section provides a good example of this) and should look at trends from the past and opportunities for the future. Surveys should be collated into an overall measure of performance for the company, and a source of ideas for future developments.
And by staggering surveys to cover an 8% sample of your customer base on a monthly basis it is possible to turn the survey into a management metric of Customer Performance.
Customer Surveys done properly may seem a lot of work, but the chart on the right shows how the benefits can far outweigh the costs. It illustrates how on a statistical sample of 3000 companies, a focus on identifying and serving customer needs translated into a seven-fold benefit in profitability.
(source - PIMS DATABASE extracted from The PIMS Principles p109, Buzzell & Gale, Free Press)
Quality Function Deployment (QFD) is a tool for translating objectives into functionality. In practice it has played a major part in helping companies to establish systematic management in the design of their organisations and so is covered in some depth under PHILOSOPHY, but we are looking at it from a slightly different perspective in this section.
QFD originated as a tool for the design of products, and in its simplest form is merely a matrix for taking customer needs and relating how the various aspects of the product's functionality or design can be made to contribute to the fulfilment of those needs. Because of this focus on customer needs as a driver of the design process, QFD is also known as 'The voice of the Customer'
The matrix itself is a means for ensuring discussion around the opportunity for each aspect of the product to fulfil different customer's needs, and it is in this discussion that the benefit of the tool really develops.
Further to this however QFD can be used to look at service as well as product, and can provide real insight into how the company can be configured to provide excellent service to its customers. By careful design of the matrix it is possible to explore the design of the business with both customers and staff to look at the real opportunities to add value. The diagram on the right illustrates some aspects that you might include in your own QFD on how your company serves its customers.
Kano analysis, named after its originator, Dr Noriaki Kano, is a model for exploring the three different types of requirements that customers might have for your product/service. These relate to one 'spoken' requirement, and two 'unspoken' requirements which can easily be overlooked.
The spoken requirements are those aspects of your product/service that would normally be explicitly defined within any contract or request. To take the example of a car this could relate to its speed of fuel consumption, how big it is etc. The green line in the diagram on the right indicates that where these are fully met or exceeded the customer is likely to be satisfied, becoming progressively less satisfied with each compromise that is made. Fairly obvious really.
The first 'unspoken' requirement is also fairly obvious, but can easily be overlooked - particularly where the customer and supplier come from different backgrounds. These 'basic quality' requirements would relate to the car (from our example above) having seats and windscreen wipers. They are assumed by both customer and supplier, and as such have no potential to satisfy the customer, but a tremendous potential to dissatisfy when they are found to be missing.
The third requirement is also 'unspoken' but in this case it is because the customer has not even thought about it. It concerns the potential for the supplier to surprise or delight the customer with ideas, innovations or additions that really add value to the customer, but often at little cost to the supplier. Because the customer is unaware of them - missing them has no potential to dissatisfy, but including them can make the customer feel 'special'. Excitement quality has real potential to make a customer feel that the relationship is more than a purely commercial transaction.
Please note however that at one time 'windscreen wipers' were probably a delight factor, and now they are 'basic'. The Kano diagram also represents the ongoing need for finding new 'excitement quality' all the time or to end up dancing to tunes originally set by your competitors.
Undertaking a Kano analysis of your own products and services simply involves listing down the three types of requirements for them, but it has great potential for you to develop future strategies that can build your relationship with your customers and really strengthen your sense of Purpose.
Customer Clinics provide an excellent opportunity to break the paradigms that you may have on how your customers feel about your products. A Customer Clinic is simply an event where customers and potential customers are invited (or rather induced by suitable reward) to come and use or evaluate your and your competitor's products while you are able to look on and analyse for yourself what is happening.
It was through customer clinics that one electric drill manufacturer discovered that its customers assessed the quality of their product by whether it rattled when it was shaken - a factor that actually had no bearing at all on the drill's potential to do its job and keep doing it - but to the customer it was important.
Customer Clinics also have the potential for you to involve all sorts of people from your company and thereby not only to further develop your PURPOSE, but also to reinforce it.
© Tesseract Management Systems Ltd 2003
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