Diagnosis
Please Tell Me All About Me
For many years we’ve been helping our clients sort out how to create and sustain value for their customers. Few would argue that the Voice of the Customer is essential. We all too often find that the Voice of the Customer collected and reported is more about the organization, how well they are liked, or opinions on performance (not real performance), rather than those that focus on the customer’s world. Hearing and understanding the actual Voice of the Customer has too often been interpreted from gathering data that feed survey instruments, reports, dashboards or scorecards. By searching for and producing data that can be rolled up, opportunities for critical insight are lost. Feeding the tool or report can become the goal and by the time the report comes, the customer might be gone. Are we missing something? “Happy families are all alike; every unhappy family is unhappy in its own way.” Leo Tolstoy, Anna Karenina. Count Leo has a point.
Let’s consider firms in the business of making money. The public sector has lots of added complexity in sorting out voices and timeframes. The Voice of the Customer is or should be The Voice of Revenues. Understand why we make money and who has it. What we’ve found often are a great deal of questions that deal with how we make money, and opinions on how well we do the basics, not why. Consequently, we spend lots of money on questions we should be answering with our performance capability data. Customer satisfaction scores are not performance capability data.
Here are some questions to consider:
• How do we know whether we are capturing what we need to know from our customers?
• What do we do with this customer survey data? How and when is it useful?
• We are measuring service and product satisfaction, and yet why are complaints rising and customers leaving?
• There are so many “voices” to deal with, how do I cope?
• How much change are our customers facing?
• How does our service impact their ability to succeed?
•How is time spent in our organization:
1. In a stable repetitive work stream (The process world)?
2. Building and implementing new solutions (The less stable project world)?
3. Responding or reacting to changing requirements (The unstable world)?
• How and when do we find out about customer facing issues?
• Is that good or bad?
• How dependent are we on suppliers?
• How much do our suppliers impact our customers?
• Does our current Voice of the Customer process and information keep up with the “drumbeat” of the marketplace?
Any thoughts?
Going Nuclear
Last fall I experienced a nuclear stress test. It had nothing to do with power plants or the stress that the operators in Japan are undergoing. Mine was conducted by my cardiologist and the isotope was a means to gain transparency into my system under different conditions, conditions that evaluated my behavior in a dynamic environment. Happily, it rendered good news that rewarded the hundreds of miles and several of my treasured New Balance athletic shoes.
Over that last couple of years, we’ve highlighted the evidence and perspectives that our business world is increasingly more dynamic, interdependent, highly networked, dangerously complex, and managed by tools and traditions built on much more stable process experience. Business models and algorithms, control systems, enterprise tools and performance improvement technologies derived significant power from the likelihood that behavior repeat sufficiently to enable the power of statistics to improve decision making. I many cases, that stability and value remains and I expect that that will go on beyond any horizon I can conjure. In fact, Dr. Deming encouraged us to look at the world through the lens of Plan, Do, Check, and Act, and his truism remains eternal.
• When and how do we subject our enterprises to that PDCA?
• What is the nature of our Check activities?
• Do we get beyond “according to plan or budget”?
• What type of stress tests are we employing? How would our business continuity plans hold up?
• Are we evaluating what we operate against the assumptions we made when we developed our plans, processes, and systems?
• Are the experiences of the last three years is sufficient to justify a fresh look at our Check phase?
• What causes and effects do we think about today that were insignificant a few years back?
• Have we learned anything new about assumptions, risks, and opportunities? Do our enterprise systems, business processes, strategies and objectives reflect that learning?
• Who is asking the discomforting questions within our enterprises? What questions do our trusted advisors ask of us? What answers do they provide to our questions?
• Are yesterday’s data building today’s processes to deal with tomorrow’s problems? What change do we anticipate?
• How well do we currently change our capability in the face of adversity or new requirements? How far upstream do we analyze?
• Where do we sit on the fragility to agility scale?
• Do our metrics come from an odometer or a telescope?
“Events will take their course, it is no good of being angry at them; he is happiest who wisely turns them to the best account.” Bellerophon by Euripides 480-406 BC
Swan Lake and Nutcrackers
2010 was a year where much of our attention and anxiety were held captive by the oil spill in the Gulf of Mexico. It was a sobering reminder of our dependence on fuels that support our lifestyle, commerce, defense, and essentials to life today. Moratoriums on deep water drilling ensued followed by hearings and probes into why it happened and who we need to blame and subsequently seek a means of exacting some comforting justice. It’s been months since the topic has had front page coverage, almost forgotten much like the devastation and impacts of Katrina, the earthquakes in Haiti, China, and Chile.
Currently, the horrors precipitated by the earthquake and tsunami in Japan coupled with the political sea changes in the Middle East fill our front pages. In each of these cases, the parallel story on their impacts on our energy supply shares the spotlight. Events and actions that precipitate unpredictable instability are universally disturbing. We are not a species well wired for the unpredictable, much less so for the unthinkable. Our education is much about real or conjured patterns that explain the world and how it came to be as it is currently. The damage in Japan to the nuclear facilities is frightening and the consequences still very uncertain. They are not the result of irresponsible entities, commercial or governmental, but rather of our shared capacity to evaluate the unthinkable. Consequently, hordes of post mortem experts and pundits are ready to quickly make on the fly strategies about our energy future. The nuclear industry is at risk, sadly with a broad brush, and the media is all too happy to stoke the fires of panic.
I believe the fundamental issue remains unchanged. It is not about energy, or earthquakes, tsunamis, or accidents, or financial meltdowns. It is about our inadequate capacity to evaluate the unthinkable. Poor decisions are likely to follow, those borne in the heat of fear and politics. Some will want all the answers to questions that respond to the thinkable and consume valuable time and minds needed for the exploring of the unthinkable.
It’s time to reread “The Black Swan” by Nassim Nicholas Taleb (http://www.amazon.com/Black-Swan-Impact-Highly-Improbable/dp/1400063515).
While these frightening events are globe rattling and cascade to us all, similar issues may well be alive within our organizations, enterprises, and businesses.
• What is the process through which we evaluate important decisions?
• Do our plans follow well established patterns of business rules that we believe to be stable and reliable?
• Who addresses the unthinkable?
• How many high impact surprises have we observed in the last three years?
It’s something to think about. Thoughts?
What You Don’t Know Can Hurt You
“Could have, would have, and should have”, or, “if I knew then what I know now”, or, “hindsight is 100%.” This last weekend, through a very agile collaboration between governments, agencies, public and private sectors, an attempted act of cowardly terrorism was averted; a bomb did not take innocent lives. It hinged on a decision from a former terrorist to come forward and alert Saudi authorities of the despicable deed and the cascade of information and resource deployment worthy of commendation. Of course, the media chimed in and warned that all passenger flights may be in danger of carrying explosives in the baggage holds.
The “news” is nothing new, not even news, but sufficient to trigger the domino tumble of escalating the declaration of more inspection, perhaps escalating to 100% inspection of packages and mail on flights. Does anyone feel better and safer? Test after test conducted by the Government Accountability Office (GAO) indicate that the current 100% inspections of passengers and carry-on luggage let lots of nasty stuff get through. That’s the problem with inspection … 100% doesn’t yield zero defects … even 100% after 100 % does not get us to zero, and multiple studies confirm that. In fact, the responses that succeeded this last weekend were triggered way upstream of airplane loading and depended on state-of-the art tracking by a commercial entity, UPS.
This example is one where the consequences of failure are severe. Many organizations have a balance of two dimensions when making control decisions, fear and confidence. The levels of fear of the consequences of failure drive escalating and sequential levels of inspections and checks as a comforting barrier. This strategy does not always address the causes of the failure, but rather the containment of failures at given points in the process, often relying on the last line of defense. This is a “detect and correct strategy”. It is costly in resources, frequently wasteful, and seldom fail safe. It attempts to catch a defect, the bomb, in the system before it does damage. It requires some knowledge of where to look, and where the damage is likely to occur, or a blanketing “check it all” approach. In complex systems, this approach is very likely to fail. Many of our organizations operate within complex systems.
The alternative is to invest upstream in the process, much like the example this weekend. This alternative strategy is to develop the capability to “predict and prevent”. This strategy plays more to building confidence in the process by building knowledge of the drivers and causes of the defect and look for the culprits there. Yes, it requires spending more on the front end, but decades of data confirm that it is far more effective. Inspection is often destructive and prevention can be constructive as knowledge creates focus on what matters and away from what does not.
There is often great pressure to appear to be doing something about defects. Downstream inspections are visible and they do catch some defects. However, when they fail, our customers experience the consequences. Our instincts may tell us to do more checks check more things. As we move further downstream in our inspections the compounding pressures to deliver on time will overcome our capacity and degrees of freedom to detect and correct. Careers can die at deadlines. Ask any proposal writing team.
Healthy performance is not too different than healthy living; it is typically more effective when managed before you need to go to the hospital.
What’s Luck Got To Do With It?
“Plans are nothing; planning is everything.” Dwight D. Eisenhower
How much depends on the yearly business plan? For many, it triggers budgets, funding, capital approvals, sanctioned projects, operating targets, salaries, product launches, support activities, hiring, office renovations, perks, …, lots of movement and a myriad of decisions, hopes, dreams, and nightmares. It is often the summary of what we expect, maybe wish or hope, to happen, commit to do, and the outcomes that the world of business should see, translated into the language of finance. How we get to a business plan is often very complex and incorporates science, judgments, guessing, posturing, analysis, modeling, gaming, negotiating, positioning, negotiating, horse trading, quid pro quos, and most importantly, the uneasiness of uncertainty. For some, it starts with a number that becomes the hard operational constraint, or a number that becomes the aspiration goals, or a combination or permutation of both. After years of roles building, executing, and navigating through business plans, many of us have concluded that they are often great for initial direction and alignment, but getting much more challenging for decision making as the fiscal year ensues. Reality looks more like Von Clausewitz’s “fog of war” than the futures we describe in our plan.
One aspect of business planning that continues to surface is the frosting of optimism that flavors them. After all, the business plan underpins our budget request, and we have a lot of interest in its approval. Nobody would ever accuse a turkey of voting for Thanksgiving. Recently we’ve witnessed the BP catastrophic events in the Gulf of Mexico, Apple’s embarrassing iphone reception flaws, and other unanticipated and unplanned failures, perhaps first hand. How outside of the known laws of physics or economics were they? What could we have considered to make a better choice? Would we change our decision with the benefit of retrospect?
As we begin to refine and polish our business plans for the fall submittals, are we confident, hopeful, or fearful? Did we subject our thinking to a skeptic’s review? Do our tools for evaluation ask the right questions? Do our planning, review, and approval process incorporate more science or art? How much is sales and how much is substance in the presentation?
What’s luck got to do with it?
It’s Your Call
A blown call costs a pitcher a perfect game. This week, it really happened and everybody felt terrible, apologies ensued and the guilty umpire felt genuine remorse and accepted full responsibility for the failed measurement. A poor measurement did not change the perfection of the real performance, a better gage, instant replay validated that, but rather the record of what happened. Those that missed this story and are evaluating the statistics of pitching performance will only have the historic data to evaluate, data that is a false witness of events. Imagine the effects of all the poor measurements in one year of major sports events. Do they change important outcomes? Do they steer rewards or punishments? How about all the stuff that goes on with gamblers in or out of Las Vegas?
Bad measurement in sports evokes big emotions, outrage, indignation and a score of aftereffects that include bragging rights. Does bad measurement in our enterprises conjure similar reactions? What are the chances that we are making decisions as a result of poor measurement, the wrong lens, an obstacle in the way, poor technology, get the picture? If so, the issue is ubiquitous. In over two decades of helping organizations with performance gaps, poor measurements have always been at play, sometimes with disastrous consequences.
The issue is not a simple one. For example:
• Do we use the data that we have and try to conjure meaning from it? Or do we start with what we want to know and then measure accordingly?
• Are we sure that the movement in the data is representative of what is actually happening within the process?
• Do different individuals or functions measure differently? Would they come up with the same value when measuring the same process?
• Does the data just not make any sense?
• How about our “calls” on what we evaluate? Do two managers reach the same conclusion about someone’s performance? If not, who is right? What are the consequences to the individual?
• Do we introduce our own bias into the measurement and evaluation?
• Do we have folks who are easier graders and those that are more demanding? Do they evoke similar or different performance?
• How much of our decision process rely on a subjective call (an opinion) versus an objective measurement (an actual number)? Do we know how often our calls are wrong?
• Do compliance requirements change how we measure performance?
• What happens when lab results are wrong? What if wrong results bring really bad news or they mask the bad news and bring good news?
• Are we ever surprised by events that would have been very visible had we measured differently?
• Does a part of the organization hide or hoard data?
• Do our customers measure our deliverables and call about problems that we should have prevented them from experiencing? What did our data say?
• Do we have our vision checked from time to time? Why is that?
• Do we ever catch how some advertisers deceive with clever use of statistics? How about in our enterprises?
• Is it safer for ourselves to call someone “safe” rather than “out” when we’re not sure, just in case? Consequences are often more severe in one direction versus the other.
• Have we ever spent a lot of money and resources on a decision made with poor data?
So, how’s our data today?
When is the Exam?
Ever been caught in a situation for which you were not prepared? Ever dream where you forgot to attend a certain class at school, did not go for months, and then remembered, and the exam was to be in one hour, forgot the room, hadn’t studied, and then … panic? It can be unnerving. It evokes a very special anxiety, an unforgettable sensation. This type of anxiety is different than a surprise calamity that came from nowhere and it was something you could not have prepared for. The anxiety that comes from being unprepared is different because the consequences are typically very severe, sometimes disastrous, but very possibly preventable, had we prepared for it or to be surprised. It is but one dimension of the cost of unreadiness. That cost of unreadiness is terrible, nightmarish, fraught with self doubt and remorse, and becomes overwhelming when it is basking in the public eye. Sometimes, others suffer because of our unreadiness.
Unreadiness has different faces; the most distinguishable differences often exist between those that serve the interest of shareholders and those that serve the interests of the public. There are events of unreadiness that are shared among sectors. One that is hard to escape is capturing our attention because it painfully highlights a frightening level of apparently ubiquitous unreadiness. One indicator of the issue is the overwhelming amount of rhetoric and buzzing about from spectators to visible execution from those jumping into the fight as ready and agile gladiators.
The current crisis with the river of oil gushing upward in the Gulf of Mexico is a behemoth that resists constraints and carries dimensions of destruction that will change economies, lives, careers, communities, and perhaps the lens through which we view ourselves. It behaves much as Pandora’s Box, opened and releasing unbridled and irreversible calamities. There are overlays of causes, inclusive of a stated strategy to reduce dependence on foreign oil, one that may have created or perpetuated cozy questionable regulatory behaviors with the offshore drilling permitting and oversight process. There will be plenty of time for blame to be delivered. Right now, however, it is a distraction from the priority plugging the spewing hell.
Plenty of pundits are weighing in with “who is in charge, which is guilty, how much should we punish ….” Yet the still small voices of, “we can help, we have experts, I will lead, follow me lads” can’t be heard or remain silent. When no one is ready, everyone is guilty. It comes back to the eternal conflict between decision making systems, values, paradigms between the world and rules of economics and the world ruled by the rules of variability, uncertainty, the laws of physics, today’s engineering, and yesterdays science. It is very much about yesterday’s science and yesterday’s patterns applied to tomorrow’s problems. We create black swans from white ones, by the decisions we make (might want to read the book … “The Black Swan” by Nassim Nicholas Taleb) and what we chose not to consider in those decisions.
David Brooks, the columnist, has articulated several times that extraction of energy resources (oil, gas and coal) continues to have costly risks, albeit acceptable by consumers so far. The laws of physics make that undeniable. The coal mine disaster, the current oil geyser, Somali pirates hijacking tankers, refinery fires; there are many. Yet, energy is essential to life as we want it to be and as we need it to become. Our current demand is not likely to drastically change anytime soon, but maybe our strategic objectives should. The 800 pound gorilla in the room is too big to avoid. What we are witnessing are the secondary effects of harvesting and extraction economies and technologies. All extraction and harvesting sources have to be converted and that process leaves scars. Whether lumber, pulp, agriculture, food, minerals, fuels, all leave scars.
So our gorilla wonders about our choices. Do we set the same standards across the choices? Do alternatives share the same decision hurdles? Do they share the same oversight and regulatory burdens? How does the consumption immediacy of today reconcile with tomorrow’s predictable constraints?
Consider one example. If oil and coal had to meet the yoke of regulation from cradle to grave that the nuclear generation alternative endures, we would have very different behaviors. Today, the cleanest and safest choice is treated like the red-headed stepchild, a behavior not shared by the rest of the technologically literate world. We unknowingly or passively take on the risks of oil spills and mining accidents, but howl at the thought of a geologically sound repository site for spent fuels and continue to foster an onerous permitting process for new generating facility construction. It’s a tough one to reconcile. Balancing the laws of economics with the laws of physics is tough enough, but when mixed with the laws of political electability, it can become next to impossible. This issue is more about tomorrow than about today.
But the nuclear debate did not get us Pandora’s Gusher, unreadiness did, cut corners did, questionable regulatory behavior and integrity did, poor situational awareness did, and maybe some hubris did. There seem to be some choices, and none are cheap, fewer easy. Raising the standards of readiness call for a different way to plan, manage, and reward. It means ensuring with preparedness and responsiveness rather than insuring with financial instruments and distributed risk coverage. The risks and consequences are radically different. Again, we can pick the laws of physics, build agility, and respond; or the laws of economics, acceptance of fragility, and react. There are differences between managing from fear or confidence.
The 800 pound gorilla wonders about how we will decide. When we have tough choices, do we seek affirmation or confrontation? What will be the costs of our unreadiness tomorrow?
“The art of war teaches us to rely not on the likelihood of the enemy’s not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable.” Sun Tzu
Thoughts?
I Can’t Hear What You’re Seeing
For many years, the term Voice of the Customer has been a source of incalculable confusion and a hazardous source of misdirection. The reality of dealing with a cacophony of voices that can often come from the many interfaces and service points is daunting for some. Discerning the signal from the noise fosters subjective simplification and can and too often yield risky and sometimes shallow insights carried forward into our delivery of services. We make decisions about requirements without clearly understanding what creates value for our customer. The simplification can put much more focus on the past at the expense of consequences that await the future.
Some reasons may be:
- Understanding the processes, players and decision-making in the initial contracting process. The customer we see and hear often is not the customers we will serve. Tom procures and Mary operates. The functionality (and different points of view) is currently unavoidable in the public sector and lives well in the private.
- Asking the customer for requirements and then setting quality specifications for our outputs. The customer is limited by what they believe you do, could do, or can’t do. Lost opportunity results from the filtered data.
- Poor differentiation between transactional satisfaction and customer loyalty. There are often very different reasons for staying, renewing, or leaving.
- Equating meeting delivery requirements with delivering value. One comes from walking in our own shoes, not in the customer’s. Walking and hearing are very different.
- Limiting knowledge of service costs to the price the customer pays. The cost dealing with us can be too high as the relationship ensues past the start up.
There are many, far too many others. Over the years, I’ve concluded that the analysis yielding the better insights has come from seeing the world and what is truly required through the customer’s lens, looking forward, always forward. Many years ago in a conversation with Dr. Noriaki Kano, he shared the importance of “Customer In” versus “Product Out.” He’s been right all along. The levels of insight (le mot juste) delivered through lenses versus voices is paradigm shaking. In the movie Beyond the Sea, Sandra Dee says to Bobby Darin, “Bobby, people hear what they see!” She was right.
So,
- How do we decide what our customer wants or needs?
- Do we know if we’re right?
- Do we rely on surveys to look forward with our customer?
- Did we lose a customer by surprise?
- Did we add value?
- Do we rely on surveys and complaints for our lenses?
Thoughts?
Excuse Me, I’m Having a Eureka Moment
Years ago a colleague asked me to define what a successful consultant, coach, or mentor does to help their client. “Hmmm”, I thought about the question, “we work in a process of managing epiphanies! We help others discover what is, perhaps has always been, but not necessarily in focus”. It certainly was not original thought, but I believe that it is nonetheless true, and we owe much of that to Socrates. Socrates, a Greek philosopher, mentor of Plato, helped others to find truth, or fallacy in thought by asking great questions. Great answers pick the destination and great questions lead to discovery.
For many, asking great questions is a learned habit, one that may require overcoming other really strong habits. One of the strongest habits to break is our desire to have good answers. If we have great answers, then better. If you’re successful and you’ve grown in responsibilities over time, having great answers has been important. Having great answers is a way to demonstrate capability, competence, smarts, knowledge, foresight, preparation, diligence, initiative… lots and lots of favorable traits. In fact, people who work for you know that they can always count on you to have a great answer. Is that good? Does that increase or decrease the options, degrees of freedom, genius contribution, ownership, and fulfillment? How about the overall quality of answers? How do we know?
“We are usually convinced more easily by reasons we have found ourselves than by those which have occurred to others.” Blaise Pascal
Is it possible that the more others count on our answers, the less likely they will come up with good ones themselves. Is that a good thing? Let’s start with some data gathering (on ourselves, our leaders, and our team members.)
- What are our answers given versus questions asked ratios?
- Are we sounding boards or decision buttons?
- Do we welcome better answers or do we see them as competition?
- How often do folks wait on our answer before executing?
- How well prepared are our folks for great questions?
- How often do we hear “I understand or I got it” versus “Eureka”?
What is critical thinking? How do people gain critical thinking capability? How is that different than always knowing the answer? Which is inductive thinking and which is deductive thinking? If you could only pick one, which would you choose to have in changing times?
“Wisdom begins in wonder.” Socrates
Throwing the Flag
Those who follow sports know that the quality of officiating is receiving much needed and overdue attention. In fact, there is one officiating team in NCAA Football that is currently sitting on the bench for terrible calls in very important games. In fact, the poor officiating may have determined the winners and losers. Sports are a great place to talk about poor measurement because we’ve all seen it. With the advent of better technology and high definition instant replays some of the boo-boos are much more evident. Competent people in the business of evaluating performance of any type are very aware of the impacts of measurement and very skeptical of any decisions people make …. Measurement issues surround us …. I used the word competent intentionally because those that don’t pay serious attention to the quality of measurement and render opinions, advice, or recommendations on data or information are dangerous people to have on board.
Let’s stay with college football for a little longer. Bad calls lead to new conditions that redefine all of the subsequent plays. Some calls don’t end up having terrible consequences, but others do. (Apply these points to everything else … work, play, health, safety, purchases, promotions, politics, war ….) Let’s take the bad call that changed the outcome of the game.
- Rankings changed among the competing teams
- Who played at bowls changed along with the commensurate compensation and attention? Also, all of the people who went to bowls changed, … , the travel, vacations, and lots of other secondary and tertiary order effects.
- Coaches got fired, hired or moved. Lots of the press chimed in labeling winners and losers. Life changing events took place ….
- Different kids got recruited by different coaches….. And on and on and on….. the dominoes keep falling …
- This was due to just one bad call (measurement) that changed the game, just one game.
Apply that to any professional sport, the gambling industry, and the lives of the happy and despondent whose lives revolve around the sport … it continues. There is good and bad from all of this …but it is different. So the better team doesn’t always win, and it wasn’t from poor performance….
Now, how about business performance? Have we considered just how much is impacted by poor measurement? How many big and small decisions alike were made on the shoulders of a bad call? Was the bad call on the shoulders of bad information or data? How about performance appraisals, promotions, demotions and the like? Any capital spending decisions made on poor data? Did we ever spend bundles fixing something that wasn’t broken beacuse our data was crap?
Sports are changing and some for the better as our measurements improve.
How about what we do?
Links
Our WebsiteCategories
Recent Posts
Archives
- February 2012
- November 2011
- October 2011
- September 2011
- August 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
