Six Sigma and Process Improvement

Once upon a time some very smart and intelligent people looked at the world around them and realized that the way things are working now is not the only way in which things can work.  These people realized that the businesses exist to service a need and the need they are fulfilling is what people are willing to pay for.  At the same time they also saw that by giving customers a more valuable and quality focused product they would be able to ensure that those customers would continue to come back.  Some of these extremely smart people were W. Edwards Deming, Michael Hammer and Joseph Juran and they focused on a a very fundamental truth: The main source of waste and inefficiencies are problems in the process.

After careful analysis and much further work by other visionaries over the years Six Sigma was born.  What is Six Sigma you may ask?  At its simplest you could say that 99% quality is One Sigma.  Businesses that state they function at this level seem laudable until you do some more digging though -

99% “good quality” means:

Unsafe drinking water almost 15 minutes each day.

5,000 incorrect surgical operations per week.

Two airplane accidents at most U.S. major airports each day.

200,000 wrong drug prescriptions each year.

No electricity for almost 7 hours each month.

Conversely Six Sigma is a striving for 99.9999% quality.  As you can well imagine reaching this lofty goal is NOT an easy matter and takes significant effort and focus.  Not just in the initial stages but on an ongoing basis.  However those companies that are able to reach this goal are some of the best run and most profitable in the world.  Their clients are the happiest and most loyal and the products that they sell some of the most ubiquitous ones out there.

One of the ways in which Six Sigma is achieved is through analysis of existing processes (A process is a repeatable sequence of operations, organized to produce a set of desired outcomes) in a search for things that are going wrong and don't make sense.  Interestingly, when organizations first analyze their critical processes they are usually struck by how complex they are.  Many processes that are absolutely central to the success of an organization were not designed; they just evolved. They consist of activities passed on from one generation of managers and workers to the next.

By analyzing the process and removing some the complexity an immediate impact can be made and this is where the different tools of Six Sigma come into play - things like the Spaghetti Tree and Kaizan events and others.  Once you know what isn't working and WHY you can take the necessary next steps to resolve them.  However the thing that should be kept upermost in your thoughts at all times is that Six Sigma is a quality improvement and the person who determines the final quality of your product is your customer!

If quality or expected performance is below expectations when people do their jobs as designed, then asking them to "do better" is managerial nonsense. The process must be significantly improved or redesigned. Doing the job right when saddled with a flawed process inevitably results in sub-standard performance.  The only way to improve performance is to understand and correct the process that generates problems. Fix the process, and the problems will vanish.

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The Voice of the Customer

There are many ways of learning what is essential in your business.  However probably the most powerful and least practiced is that of Customer Feedback.  Having the greatest widget in the world is useless if your customers don't want to buy it and if it doesn't resolve a perceived need.  Getting that information from your customers can be accomplished in a variety of ways though and it pays to ensure that you are doing as many of them as possible.  (One point to note - conducting a survey is important, but if you don't actually do anything with those results, then you shouldn't have wasted the time or the money in gathering that information!)

Customer Feedback Is Critical

In order to drive continual customer service improvements, companies need to focus on obtaining the information from their clients, analyzing that information and acting on that information.  Remember, as stated earlier ... if no action is taken - don't bother!

Capturing customer feedback

Capturing what your customers want can be done via a variety of different means now a days.  Web and phone based surveys are common as are physical paper based surveys that are mailed out to customers.  Depending on the size of your business and your customer base, there are many large organizations that can assist in gathering, collating and analyzing this information for you, but if you are just starting out a simple spreadsheet with the feedback that you've received from your customers is a great starting point!  Listen to them NOT just in your surveys but also in your daily interactions with them via your support and customer service teams.

Another great way to get information from customers is via focus groups.  Often used at the beginning of a product stage to determine WHAT customers want, it is just as effective afterwards to determine HOW you are performing and if you are meeting or exceeding expectations.

Another point to note - DO NOT over survey your customers.  It is quite common for different parts of the same company to send out different surveys to the SAME customer.  While it is obviously important to that division, the information that is returned will not be as useful as the customer will NOT be providing an unbiased response. 

It is best if all survey's are done via a centralized team or department and then the results of that survey shared among the company as a whole. Customer feedback collected through surveys, e-mails, phone calls, online chat and other channels can be combined into a single instance, integrating both structured and unstructured data into a central platform and enabling companies to extract maximum insight from the information collected in a cost-effective and timely manner.

Analyzing the Data

Customer feedback is subjective.  It always will be and this needs to be understood by the group running the survey and appropriate steps taken.  Another very significant point is that when survey's are sent out it, it is essential that steps are taken to "tie" the response to a specific issue so that you are able to make the most use of this information.  In addition, decisions via survey should never be taken unless the sample size is large enough.

Solving the Issues

Once you've determined what your customers want, prioritize those issues based on the 80/20 rule (Pareto principle) and let your clients know what you are doing to resolve the issues.  What your plan is, how soon you expect to have the issue resolved and what the benefits to them would be.  There is no harm in sharing a commonly perceived error with your existing users ... THEY ALREADY KNOW IT'S THERE! ... and if they see that you are going to take steps to resolve the problems they will understand that their best interests are in remaining with you.  Remember that these are already your customers - you just want to treat them the right way and sharing information with them is a simple and effective way of doing this.

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Managing Technical Teams

Managing technical staff is becoming more of a challenge daily. Even more so, when your staff are MORE technical than you are - which to some extent is expected ... you are a manager and responsible for multiple area's of the company, they are specialists and able to focus on their area to the exclusion of everything else.

In most cases technical staff are those who prefer to perform their work with little or no supervision and they often view Management "oversight" as a hindrance to their - getting the job done. They also quite often forget that at the other end of the phone line, there is a customer (or customers) that has been impacted and regardless of the fact that they "think" they can resolve the problem, there are timelines and SLAs in place to ensure that issues get escalated. Now, while "techs" are members of the team that managers depend upon heavily to resolve the problem, it is the managers responsibility to understand the "big picture" and also the challenges faced by these key members at a non-technical level.

The manager is responsible for balancing the needs of the company against the needs of these key resources and obviously directing technical staff can be a challenge. It is made even more of one, by those managers that are unable to step back and release control (or delegating). The understanding between a manager and his team must be such that trust exists at either level. You trust them to get the job done in a timely manner and escalate those problems that they are unable to handle & they trust you to keep their best interests in mind, work with them to get more training (which is something a "true" techie will never have enough of), ensure that they have the resources and training to resolve the problems that you are assigning to them and in those instances where its necessary ... pull them back and away from a problem so that they do not get defeated. This mutual respect MUST be in place if the team and organization is expected to be effective.

 

The manager of a technically oriented department MUST have a reasonable grasp of the technologies and issues that his staff will face. They should be able to understand it at a "high" level, but it is OK to let your staff know that they are smarter than you! Remember they are skilled in their unique discipline and while you could not do their job, they are not managers and could not do your job either. It is far more important for the manager to be able to direct the staff to the right resources, tools or training when working issues. If the employee cannot perform the task with his current level of knowledge, it is incumbent on the manager and the company to ensure that appropriate and relevant training is available in a timely (& frequent) manner. Technical skills "rust" when not used and with the plethora of new technologies constantly being developed and launched it is very difficult to always be current with the newest while maintaining a grip on legacy tools/applications and knowledge.

Managers are constantly expected to do more, with less resources, regardless of the economy (think about it - in good times, the number of customers you have are increasing whereas your resources won't (at least not at a comparative rate) as the company is in business to make a profit ... in bad time, you lose staff and have to service what customers you have left with fewer and fewer resources) and unfortunately is probably one of the few constants in our world! Now, not only do you always have to do more with less, but you need to also ensure that the staff you have you KEEP! The cost of hiring/training and integrating new staff and making them useful is a topic for another day, but suffice it to say, if you have a "good 'un", you want to keep him! Its a fine line between customer satisfaction and employee satisfaction and its a tightrope you'll be walking every day. I generally tend to err on the side of employee satisfaction - if you have good staff, doing a good job who are happy doing that job ... customer satisfaction just comes naturally!

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Why Do Customers Matter?

Perhaps this is stating the obvious, but we want a large base of loyal customers as they are  a lot more profitable than just “happy/satisfied” customers. They consistently do business with us and on top of that they give free advertising to others to do business with us.

Besides that, we already know that is ten times easier to keep a customer happy than to gain a new one, so based on this, it sounds like a pretty good deal to just give customers the GREAT/MEMORABLE service they are expecting and keep their business coming “home”.

The question of course is - What is Memorable and What do customers want from us?

First we need to understand that customers these days are smarter, more demanding, less forgiving, harder to satisfy and most of all approached by competitors on a daily basis, therefore the extra mile we used to walk has now become “The Expected”.

In order to gain Customer Loyalty we need to show them:

• The value of our service. Let them know that they are dealing with  professionals that are willing to understand and help them. “We are here to help you”.
• How assertive we are. We will provide the correct information exactly when they need it and in the way they need it. “We are here to inform you”.
• The best attitude. Regardless of how you communicate with your customers be that email, voice or chat it is essential that your willingness to help is transmitted through the conversation.  “We are glad to help you”.

 Now like I said earlier - these three things are no longer going above and beyond but are rather the expectation, so if you do them the only thing you are guaranteed to have is satisfied customers.  To get to the next level you will need to demonstrate:

• Reliability, as there is nothing better for a customer than to know what service to expect and always get it, over and over again, if you don’t believe me then take a look at how McD’s is doing regardless of the market.
• Timing, because customers want it now, the faster the better. However, worse than late is wrong. If you ordered a pepperoni pizza, a potato salad and light coke delivered to your door three minutes after hanging up the phone would probably not improve your loyalty.

Now I don't think anyone would disagree that by providing these elements of service to your customer you are going to have a significantly happier customer out there.  However its really easy to say that you need to do it ... doing it is another question.  Here are some tips!

1. Every time you start working on an issue ask yourself the following questions in this order: How any issues is the customer bringing to my attention? Is it clear to me what the problem(s)  is(are)? What information do I need to solve the problem? What information do I have at this  moment? How can I get what I am missing? By doing this, you will improve your accuracy in  solving the customer’s issues, you will start to work smarter instead of harder as you will focus  your efforts and time on solving the problem.
2. Let the customers know what you have understood, what information you are giving them and in which order. This will tell the customers that you are taking their concerns seriously and that you will address all their questions. Remember there is nothing worse than being ignored and  when you address two out of three questions you are basically telling the customer “your third  request is not important to me”.
3. Get training on the things you find difficult to solve, the more you know, the easier your work will be, and the easier your work is, the faster you can provide the right answer to the customer.  It is like body building, the more you know the stronger you get. The difficult part of putting this advice in practice is to recognize what we don’t know and even harder to be humble and ask for help. In my experience every time I have asked someone to teach me, they have felt proud of passing their knowledge to anybody who approaches them with respect,  paradoxically this does not always work with teachers but has worked perfectly with  colleagues.
4. I don’t have specific advice on improving your attitude, there is no method or technique to follow that guarantees an improvement in this area, however, I suggest you start doing some exercises, drink two more glasses of water every day, reduce caffeine, eat chocolate and most of all worry only about the things you can control, like your reaction to every day events.

Customers are human beings, as demanding and difficult to please as you and me. Think about the restaurants, pubs, stores, online sites, etc that keep you going back and spending your money there,  what have those places done to earn your loyalty and then think about what else can we do to keep  earning your customers loyalty.

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Conducting an effective Job Search

Its easy to make a mistake when searching for a job, unfortunately by doing so you are adversely impacting your ability to find that role of your dreams and case should be taken to minimize this as much as possible. In this difficult job climate, care must be taken with even the smallest detail and your review should include your resume and cover letter as well as your own references!

Paperwork -

Your Resume/CV and Cover Letter are generally your first introduction to the company. You can never make a first impression again so it pays to ensure that the information you are providing to the prospective employer is accurate, factual and well presented. Use good quality paper if sending out or providing hard copies and ensure that it is readable. Try not to exceed 2 pages by formatting and if necessary deleting or editing out previous roles to ensure that it fits.

More Details -

Cover Letters are your ticket to sell yourself. While a CV/Resume is by its very nature a dry and factual document, a cover letter speaks to your passions and ambitions and you should utilize it fully to draw the reader’s attention to the parts of your background that are most applicable to the specific job.

Customization -

It is essential that you customize your resume & cover letter to the job that you are applying for. Having a "master" version of your CV that is available to you is a good first step and then depending on the role that you are applying for and what they are looking for you can and should tailor your CV (resume) and Cover Letter appropriately.

Networking -

If you only depend upon the job boards for roles, you are missing a vital clue. Make sure that you network (use LinkedIn for example) and speak to your friends and family. Get involved in some "after school" activities and clubs and meet other people in your community and in any professional associations. Some studies have shown that almost 60% (or higher) of roles are filled in this manner and it is significantly more effective than mass applications!

Please & Thank You -

Being polite never hurts and you will find that it pays even greater dividends in the job search! A professional "Thank you for the time" after an interview is absolutely essential. In addition, it helps bring your name back to the forefront after they have seen a raft of other applicants and also demonstrates your interest in the company and position.

The Boy Scout Code - "Be Prepared".

Make sure you know your resume and are comfortable with all the details included on it. Make sure that you carry extra copies of your resume to your interview with you. If you have written references take them, if you have demonstrative project work ... bring it!! More than likely you will not need all of this, but you are guaranteed to need it if you don't have it with you!

Do your Homework -

It is 110%(!!!!) essential that you know the details of the company that you are interviewing with! What do they do? What products do they sell? Who is their biggest competition? What is their revenue? Are they public or private?? Not doing your homework on the company shows a distinct lack of interest and regardless of how well you interview the hiring manager is going to think ... "if you're not interested in me, why should I be interested in you??"

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Do you know what they are thinking?

Ensuring that you measure your customers expectations of your business as well as acting to meet and exceed those expectations is a key step in ensuring that you are running a successful and profitable business.  Gaining valuable insightful customer feedback is key to ensuring that your business continues to address consumers' needs.

Current data shows that over 80% of businesses currently make this effort, however that same research shows that the quality of these surveys and the data gathered from them was poor, with a significant percentage of people surveyed admitting that they had never undertaken the exercise at all!

However on the positive side, some companies that utilized automated technologies to assist them in their surveying had shown a significant increase in Customer Satisfaction and Revenue and a decrease in overall customer churn.  By utilizing these sorts of tools and conducting a thorough analysis of the results provided, companies have been able to utilize the 80/20 methodology to assist them in targeting the pressure points that are most painful to their customers and removing them!

The key point to take from this is that the best person to determine what is and isn't working with your company is your customer and the only way that they will tell you what's wrong is if you ask them!

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The Fallacy of Price

A common misconception is that if you lower the price you will get more customers.  This is not always the case by anymeans and there are some significant downsides to playing the price card which you should consider.

Now, you might not really have an option - if your competition has cut their price to some extent you will be forced to match this to ensure that you are not priced "out of the market" - however if this is not the situation and you are choosing to cut your price without any prompting from competitors or customers, there are reasons for and against this action.

Companies that pursue this strategy do so for a variety of reasons including the idea  that lowering prices will revive their customers' wavering devotion and ultimately make the company better off. To defend the cuts, they cite changes in the competitive landscape, the convictions of upper management, a willingness to share cost savings and productivity improvements with customers, and the mistaken belief that lower prices equates to higher volumes. Because price cuts seem to offer the easiest way to lavish special treatment on customers, companies find the temptation hard to resist.

Now while some of these actions might be true there is significant justification in resisting the temptation.  Proactive price cuts don't make you different, nor do they make you better off. They make you poorer, unless you have the evidence, the data, and the math to prove otherwise.

Lets look at a simple example:

Price of your widget = $10

Volume sold = 100

Revenue = $1000

New price of your widget = $8 (reduction of 50%)

Volume sold = 150 (increase of 50%)

Revenue = $750 ... you would need to sell twice as many units ... an increase of 100% to achieve the same revenue you enjoyed before the price cut!

This holds true regardless of how you cut prices. You can cut them through outright price reductions, by offering coupons or cash-back incentives, and by heaping services upon your customers in order to clinch a deal or cling to an existing customer relationship.  Remember that in an established industry there can only be one cost leader ... in a mature industry in which competitors offer similar products based on similar technology and inputs, it may even be impossible for any company to achieve more than a slight cost advantage.

The key thing to remember is that you are in a business to make money AND deliver a service.  Your customer wants to pay fair value for the services rendered and they realize that if you went out of business they would need to go elsewhere. 

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Using an IVR effectively

First – what is an IVR? 

Some people also call it an ACD but whatever you call it, an Interactive Voice Response (IVR) or Automatic Call Distribution (ACD) system is used to get your customers to the right people to answer their questions or provide them with the right information.

 

When used effectively it can be great for your customers – they get their calls answered by knowledgeable people in a timely manner and for the companies its great too ... by knowing who your customer is calling and about what you can ensure that you have the right people in place at the right time and you are able to pull the appropriate information from the system to ensure that this practice continues.

 

However, when an IVR is not working the right way, you are putting your customers in what is known as "IVR hell" – basically your clients are talking to the machine more than to your staff and are in a loop, just going around in circles getting madder and madder. This is one of the best ways to lose business!

 

How do you fix it you may ask? 

Well sometimes the issue or problem might actually be related to the technology itself but more often than not it's the fact that you are offering too many options to the customer or when they actually do reach a representative that is supposed to be knowledgeable in the area that they are concerned about to hear the response that they are unable to help without additional information – which is more than frustrating!

 

You need to manage the caller's expectations and to do this right; you need to ensure that your customers know what information is required BEFORE they speak to your representative – mention it at the start of your IVR and at every hold interval that you need to put in. Make sure that the IVR is actually working – try it yourself ... REGULARLY ... and try it from a customers point of view not with your inside knowledge of who to speak to ... get people from other departments to call in if necessary. If you are able to integrate your IVR into your CRM solution do so – having all of the customers information available including past issues reported is extremely important and useful. Finally and perhaps most IMPORTANT ... ensure that your staff on the other end of the line are able to solve the problem! Finally reaching a live body only to be told that they will need to call back does not help your customer's mood.

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