3.4 PER MILLION
Rediscovering True North
Customer satisfaction must remain a priority
by Mike Carnell
During my years at Motorola, I had the pleasure of viewing a video by the popular trainer Morris Massey. In the video, he introduced the concept of a "significant emotional event." At the risk of not doing his work justice, such an event is something that is so traumatic for a person that it can significantly alter his or her behavior and, possibly, his or her value system.
As a nation, and quite possibly as a global community, we all have experienced a significant emotional event: a year’s worth of economic turmoil. We have all survived various types of historical events or Wall Street scandals without them directly impacting most of us on a personal level. Very few of us, however, have been untouched by this recession.
Before the recession hit, we were witnessing the globalization of virtually every type of business. The market was expanding at an exponential rate, driven by technological innovation that was growing faster than the market. As quickly as a market matured, a new one was spawned.
In that high-energy, fast-paced environment, as many businesses focused on entering an emerging market early, it was easy to take your eye off customer satisfaction as a critical component in running a business. We could still speak about customer satisfaction, but did we really practice it?
An eye on the customer
What does this have to do with Six Sigma? Six Sigma was developed at Motorola at a very competitive time in many of its markets. It had nothing to do with repackaging total quality management or breaking into consulting markets with a new method.
Six Sigma was simply one of five key initiatives that were to be used to achieve Motorola’s fundamental objective (everyone’s overriding responsibility) of total customer satisfaction.1 Motorola understood that the least expensive customer was the one you already had and that the least expensive way to retain that customer was to satisfy them.
Unfortunately and fortunately, Six Sigma is somewhat indiscriminate. It is a method that analyzes data, and it doesn’t matter the type of industry, the volume of product or the goal of the project. If you develop projects focused on customer satisfaction, Six Sigma will deliver answers to problems about customer satisfaction. If you develop projects focused on cost reduction, Six Sigma will deliver answers to problems concerning cost.
As the method grew in popularity, Six Sigma evolved from delivering business results based on customer satisfaction to delivering business results based on cost reductions. Why? Think about it. What is the easiest thing to sell to business leaders? Cost reductions, of course, because that’s something easily quantified by the accounting system.
It could be argued that current accounting methods do not address true cost very well, but that is irrelevant. Remember, management is measured by numbers provided by accountants.
If you have a cost-reducing method, you will have a much easier time selling it to management. Those are the same people who sign the consulting contracts. The result? The link between customer satisfaction and Six Sigma has become more of a historical footnote during the last few years.
A balancing act
As the recession deepened, the revenue of many businesses has shrunk faster than it was possible for those businesses to cut costs. In fact, the entire available global market dramatically shrunk. Suddenly, it is a scramble to find customers.
There is a large cost associated with identifying and obtaining new customers. In these times, it is an additional cost most companies cannot afford. Our business compass has now swung around and, again, seems pointed north toward finding ways to keep the current customer base.
As markets slowly shrink or expand, the organization that is the lowest-cost producer has the best chance to be one of the last ones standing. If you are the lowest cost supplier with no customers, however, you won’t make it out of the recession. It is a balancing act.
In the past, Six Sigma has been used repeatedly to understand where the leverage lies: Where is the nonvalue-added part of the business that does nothing for the customers and adds cost to the business? Where do you leverage things your company provides that set you apart from competitors?
A pure cost-cutting program is internally focused and may or may not benefit the customer. Driving benefits from the perspective of creating customer satisfaction provides an external focus. Companies that have never lost sight of their customers have put themselves in positions where they are considered a part of the customer’s success model. It doesn’t make these companies bullet proof, but they also won’t be abandoned by the customer for a penny’s difference in cost, either.
The pairing of Six Sigma and total customer satisfaction was not some serendipitous event that worked out well. It was a well-defined, thoughtful strategy. It was a simple, yet elegant, corporate objective supported by key beliefs, key goals and key initiatives.
A low-percentage proposition is the idea that someone will install an operating system that controls cost to the point that the company becomes world class. The keys to long-term success are customers and revenue. If we’re lucky, our significant emotional event will leave that mantra indelibly imprinted on our psyche.
- At Motorola, we were all expected to carry a card in our wallets that spelled out the corporate strategy, as well as key beliefs, goals and initiatives Motorola wanted its employees to understand and follow.
Mike Carnell is president and CEO of CS International in New Braunfels, TX. He earned a bachelor’s degree in business administration from Arizona State University. Carnell is a member of ASQ.