Lean for the Wrong Reasons

 Voice of the bottom line or Voice of the Customer?

Every day I listen to executives discussing the importance of Customer Experience, Journey Mapping and being responsive to the Voice of the Customer as a competitive differentiator and path to retention. Customer retention is the "answer". I have yet to find an executive who would disagree. They will readily defend the critical importance of this, write corporate mission statements around it and use it as a core operating principle and a fundamental building block for their internal organizational cultures.

What Lean Means to Me

The essence of understanding and catering to the Voice of the Customer is to become better at providing a positive customer experience for the sole purpose of retention. Achieving this goal typically translates into speed, simplicity and service all at a competitive price. By using that as a guiding principle in lean projects, other benefits such as cost savings and service enhancements are frequently realized along the way. The difference is that these benefits were never intended to be the primary objective and this is where it all falls apart...

Unfortunately fiercely competitive markets in most industries have forced companies to urgently find ways to protect their margins. The simplest and most obvious route to short-term relief is to contain/cut costs. This is not a long term or sustainable solution without significant re-engineering and can often do significant longer term damage to customer retention and shareholder value. This immense pressure to insulate the bottom line has caused executives to view Lean as their short term life raft and an opportunity to reap as much savings as quickly as possible; and at any cost. This changes everything and actually runs counter to what Lean is supposed to be all about.

Short-Term Gain at Any Cost

This phenomenon has become so common-place that in practice Lean has become synonymous with cost cutting...any way possible. While everyone talks about the value of the Customer Experience, actual practice reveals clouded objectives and in fact little regard for the value of that experience. They are only interested in the "quick win" and are typically not prepared to take the longer term / broader perspective.

Efficiencies resulting from lean projects come from

a combination of the following places;

1. How work is distributed

2. Appropriate mapping of the task to the competency of those performing the task

3. Re-engineering or eliminating process steps

4. Streamling the execution of each task

5. Creating measures and targets that are unique to the core tasks and making people accountable.

This seems to be very common sense and in most cases executives will immediately say that there are savings to be had in these areas and will aggressively push for the financial results. In pursuit of this objective, the mission statement and core operating principles referenced above, are often forgotten to the point that it creates a negative snowball effect that ends up impacting far more than just customer experience. All of a sudden morale, intellectual capital, empowerment, forward thinking, shareholder value are all put at risk when opportunities for savings are identified but not weighed against these these strategic variables.

Again and again I find myself sitting in executive meetings with intense pressure for immediate financial relief at any cost. A typical 3 hour presentation of the results from a Lean assessment, uncovering $500,000+ in potential annual savings to a room full of senior executives and almost always the only feedback/comment is that it isn't enough. The disturbing part is what is forgotten.

Executives, guided by a one-dimensional/cost savings now approach and using their competition as their sole barometer and guide, are actually setting themselves up for longer term challenges all under the guise of performing a Lean assessment in support of the Voice of the Customer.

Eric Young
President
Tele-Centre Assist Inc.
www.telecentreassist.com