Heroes of Change

Let’s face it.  Middle managers are not that glamorous.  They get stuck with some pretty odious responsibilities, like figuring out how to reduce costs, telling RIF victims bad news, and enforcing policies that they may not always agree with or understand.

All the glory tends to go to the executives, along with the good compensation.  Most executives trend to be wary of the middle during transformative change, as they often fall into passive resistance.  Middle managers need to see themselves differently in order to embrace change.

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Customer Satisfaction and The Hero

In this series I am exploring the notion of viewing interdepartmental relationships within a company as “customer-provider” relationships.  In this post I want to tackle the question:

What does customer satisfaction mean?

Customer satisfaction is hard to define.  Ultimately, we want customers from whom wealth flows to the owners to be content, so the wealth keeps flowing.  But in interdepartmental customer-provider relationships, satisfaction is harder to define.  We often think monopolistic-ally, that our customers have little or no ability to find another provider.  But ask all of those it staffers whose jobs have been outsourced… there are no guarantees.

In interdepartmental relationships, my departments incentives feel more important than theirs. I may be balancing capacity between customers and not have enough to satisfy all. Internal customer satisfaction may be more about prediction, collaboration, and communication when problems arise.

Sometimes it’s about trust. Being honest and open when making or missing commitments.  Negotiating service level contracts. Establishing communication protocols. Even asking for help when overwhelmed.

Sometimes it’s about your customers operating constraints.  Maybe it’s speed or timing of interaction, aligning schedules.  Maybe it’s information flow, content or structure.

All of these require you to understand your customers needs. It requires some empathy.  That takes time and patience. It means being intentional.

What if customer satisfaction meant “helping my customer see himself as the hero of the story”, rather than the victim?

That makes us the valued “sidekick” rather than the hero. …and that is a powerful way to engage your customer!  And it is true.  The customer never really wants the supplier to be the hero.  He wants the supplier to help him be the hero.  In a value chain of customer supplier relationships, I need to perceive myself (or my department) as both being the hero (enabled by my suppliers) and the sidekick helping my customer become the hero.

 

Goodness

Taking a short break from my customer series to ask a silly question…

What are you good at?

This Thanksgiving week, I want to think about things we can be thankful for.  So lets start with those things that help us be valuable to those around us.Continue Reading

A Customer Who?

In this series I am exploring the notion of viewing interdepartmental relationships within a company as “customer-provider” relationships.  In this post I want to tackle the question:

Who is my customer?

Internal departments may do work on behalf of real clients of the company, but never have contact with those clients. There may be customer reps that “front” the real clients that are one kind of customer. Departments that do work in the middle of a value chain can see the departments up and down “chain” from them as customers. Other internal corporate customers may be people or department who rely on information created during the work that a department does.

Other departments whose work is more “corporate” have more challenges imagining their customer. HR, Accounting and Finance, Audit, Risk, Regulatory Compliance may fall into this category.

A third group of department has work with project-shaped components and may include IT, facilities, process engineering, organizational design, change management, and other internal consultancies.

When thinking about my customer, one thinks through the list of people, roles, and departments that consume, benefit from or whose work depends on the results of my work. These customers may or may not be people that I have any real contact or connection to.

A customer is someone who…

  • Pays for the result of my work
  • Consumes the result of my work
  • Adds to the result of my work
  • Depends on the result of my work

So to understand my customers, I need to understand the RESULTS that my work produces.  Then I look for individuals, departments, processes, or functions that have one of those relationships to those results.  Also understand, that the results of my work may not mean only the finished product, but there may be some byproducts of my work that are interesting, and there may be some intermediate products that are interesting. Byproducts may include things like “reporting” or “metrics” – and those may have different customers than the finished products.  In addition, intermediate products like plans, designs, and work schedules may have some customers as well.  Intermediate products often relate to “adds to” relationships – especially quality assurance or planning functions.

So far, this conversation has been about direct customer.  Direct customers are pretty easy to understand.  However, indirect customers are often the reason for doing things a certain way.  Their needs often change our processes.

An Indirect Customer is someone who…

  • Benefits from the result of my work (even though they may never see it)
  • Has a direct customer relationship with one or more of my customers.

Some people think about indirect customers first, especially when they are the clients of the firm.  In the context of the work that I am doing, I try to focus on direct customers, and let my direct customers inform me of their customers’ needs and how they are working to meet them.  For indirect customers, it is a team effort, with everyone in the value chain working together that matters.  Without the team, I am just as likely to make things worse as I am better.

Customers and Value

My team’s value is determined by our customers.  If I want to optimize my team, I need to consider my customers.  In the simplest example, if I produce more than my customers consume, I have excess inventory.  I got paid the same as if I had produced exactly the amount they consumed, but I did more work and now I need to pay for storage.  If my process is in the middle of a value chain, and it is not the bottleneck, going faster is not better.  However, if my process is the bottleneck today, and the next step in the chain can only consume 10% more than my current output, if I produce 20% more, I increased capacity by 10% and created a new bottleneck down stream.  If I reduce cost at the expense of peak output, when peak output is required, I have become a drag on revenue.  If I save 10% cost, but lose 5% revenue due to output constraints, my savings is not realized. Optimizing my team’s value depends on understanding my relationship to many customers.

 

A Customer

“The purpose of any business is to create and keep a customer” – Peter Drucker

Five years ago, even two years ago, I would have said that the purpose of a business is to create value. Before that I would have said that the purpose of a business is to make a profit or to make “money”.  As I understand the purpose of a business, it has been incredibly important to have an understanding of the story that business tells its customers.  Take 15 minutes to watch this video if you are not already familiar

Start with why – Simon Sinek

What I have finally realized is this. The purpose of the business owner is to make money. The whole concept of a business centers around the notion of a customer from whom that money will flow to the owner. A business is not an arbitrary concept, it is a structure through which wealth flows from customer to owner. The value that the business produces is specific to the needs or perceived needs and wants of the customer that business creates.  But that is not the “why” of the business…

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Trust is not Binary

I read this post in Dan Rockwell’s Leadership Freak blog and it aggravated me.  

I agree with Bob that trust is given, not earned, but distrust is often earned.  Trust isn’t merely given, it is needed.  I have to trust.  I can’t function without it.  It’s a matter of how much.  Do I trust you enough?

Problem is, trust has no unit.  There is no measure.  So it feels binary, because the line is enough.  But different situations require different measures of trust. 
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The Beast

You adopt practice to “make the team go”.  However, every practice you adopt has a cost. The time you spend “making the practice go” is somewhat then a cost of making the team go.  I like to talk about the cost of your practices as “Feed the Beast!”  But what you really want to make your team go is to “Ride the Beast!” where the practices we have adopted start to carry the team faster than they could go without them.Continue Reading

A Fascination With Governance

If a little is good, then a bunch must be better, until it isn’t.  I was having a conversation on the train the other day on the way home from work. I was sitting with an acquaintance that I ride with from time to time and we were both complaining about the week we were having. And we started to realize that we were both frustrated by a similar problem – but seen from a different view.

My friend told a story about how he had to travel on business and how he had found a hotel closer to his client’s offices so he wouldn’t need cab service. The problem was that the hotel was not part of his company’s preferred vendor list, and it was $10 more expensive than the hotel 30 minutes away that was preferred. His experience from previous trips showed that he spent $45 on cab fair, so the net savings would have still been $35. So far, so good. However, since the hotel was not a preferred vendor, his expense needed management approval. So he went to his manager, and yada, yada, yada – the CFO of his business unit had to sign the form before he could get his expenses approved, even with a $35 savings. My guess is that that the cost of all the management attention on this expense cost his company something close to $250. So much for the $35 savings – his little deviation from policy cost $215.Continue Reading