Lean Redefined to Create Customer Value

The Bangkok Post (Thailand)

April 16, 2014

When you think "lean," what typically comes to mind are tools for eliminating waste in a manufacturing process. For example, kaizen (improvement) workshops, where frontline workers solve complex problems; kanban, the scheduling system for just-in-time production; and the andon cord, which, when pulled by any worker, causes a production line to stop.

These tools have been perfected with continuous improvements made over the past 50 years as the core of the Toyota Production System, which we also know as the lean production system.

But in recent years lean thinking has evolved into a richer appreciation of the power of its underlying management disciplines including:

  • Putting customers first and increasing value by truly understanding what they need and then delivering it efficiently.
  • Enabling workers to contribute to their fullest potential.
  • Constantly searching for better ways of working.
  • Giving meaning to work by connecting a company's strategy and goals in a clear, seamless manner across the organization.

Building great customer value depends on how "lean" a customer's experience is with the company's products and services. So what exactly is a "lean" experience? To answer this question, first we must understand in depth the meaning of customer experience, and then we can focus on the lean part.

According to the Harvard Business Review, customer experience is the internal and subjective response customers have to any direct or indirect contact with a company. Direct contact generally occurs in the course of purchase, use and service and is usually initiated by the customer. Indirect contact most often involves unplanned encounters with representations of a company's products, services or brands. It takes the form of word-of-mouth recommendations or criticism, advertising, news reports, social media reviews and so on.

These direct and indirect interactions encompass every touch point of a company's offering: the quality of customer care, advertising, packaging, product and service features, ease of use and reliability. However, the people responsible for those things seldom give sustained thought to how their separate decisions shape customer experience.

For example, design and product development defer to marketing when it comes to the customer experience and focus instead on features and specifications. The operations department concerns itself mainly with quality, timeliness and cost. Customer service personnel tend to concentrate on the unfolding transaction but not its connection to those preceding or following it. As a result, each department has its own idea of what a good customer experience constitutes, but none has a simple and integrated solution to customers' perceptions and problems.

Such a lack of understanding is so severe that a survey of the customers of 362 companies by the consultancy Bain & Co revealed only 8% described their experience as "superior," yet 80% of the companies surveyed believed the experience they provided was indeed superior.

With such a disparity, prospects for improvement are small. But consumers have more choices today than ever before and more channels through which to pursue them. In such an environment, experiences that are "lean"—not fragmented and burdensome—will win the allegiance of global, well-informed and time-pressed consumers.

Delivering a lean customer experience requires an overhaul at the micro (business functions) and macro (management) levels. At the micro level, each function must understand it has a key role to play in customer experience and the attendant links. For example:

  • Marketing has to capture the tastes and preferences of everyone in the targeted segment and circulate the knowledge widely across the organization.
  • Service operations must make sure no one-size-fit-all service resolution is adopted. Processes, skills and practices must be attuned to every touch point.
  • Product development should do more than specify needed features. It should observe how customers are using products and services and uncover latent needs not identified earlier.
  • Information technology can collect, analyze and distribute customer experience data in a tailor-made fashion to all levels.
  • Human resources should offer communication and training that builds employees' individual capabilities and fosters attitudinal changes towards a seamless customer experience.
  • Customer account teams must progress from annual company customer satisfaction surveys to detailed touch point analysis through "voice of the customer" research.

As far as macro-level organizational changes are concerned, the consultancy McKinsey & Co. suggests four disciplines that correlate to tangible skills and ways of working that people and organizations can learn—which, over time, constitute the culture—how people behave and think:

  • Delivering value efficiently: The organization must start by understanding what customers truly value and configure it to deliver that exact value with the fewest resources possible by improving coordination, eliminating waste and building quality in every process.
  • Enabling people to lead and contribute to their fullest potential: The organizations that get the most from their people provide them with the support they need to truly master their work.
  • Discovering better ways of working: Identifying and resolving customers' problems must become part of everyone's job description, supported by structures to ensure that any problem flows to the people best able to solve it.
  • Connecting strategy, goals and meaningful purpose: Enduring success depends on how well employees understand and support the company's vision and business strategy. Connecting individual goals to that strategy and vision is crucial for people fully to appreciate their role in the organization and why it matters.

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