ASQ - Team and Workplace Excellence Forum


Online Edition - March 2002

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Issue Highlight — Restoration
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Peter Block's musing about a home restoration project serves as an excellent metaphor for issues in the cellar of our mind: “In our larger communities, we treat the inner city as a cellar that we do not want to enter....To enter this world, we would have the conversations that we have been avoiding.”


Making Change Stick
John Guaspari “Focus on Giving Value to Customers”

Taking the first step is often said to be the most important key to change. That’s common wisdom that is almost always wrong. Why? We have all taken dozens—no, hundreds—of first steps to change and then stopped, or looked for another first step that seems easier or was the newest first step. What we need is a way, a means to keep at it. We talked recently with former AQP board member John Guaspari to find out how he helps companies get beyond continuously looking for another first step.

(John Guaspari was interviewed for NFC by Ned Hamson, NFC ’s managing editor.)

NFC: It’s so difficult for change to stick, or so it seems. The image I have is that the ways we do things are like the current of the Mississippi or Ohio River. It’s hard to keep anyone from not drifting back into the current that’s already there. How do you approach shifting patterns for good?

Guaspari: That’s why in the previous book, The Value Effect, the subtitle was A Murder Mystery about the Compulsive Pursuit of the Next Big Thing. What I mean by “next big thing” in this context is those sets of new tools and techniques and, dare I say the word “programs,” that organizations will implement in hopes that it will lead to superior performance and be the answer. And so such big things might have been total quality, or x years later along came reengineering—or customer focus, or empowerment, or participative management, or on and on the list goes. These days Six Sigma is the answer. There is a mindset that says that we want to go after this next “big thing.” My experience is that that’s self-defeating for at least a couple of reasons.

  1. The reason that you adopt one of these big things is to gain relative advantage. They all are very powerful and they do work. However, to the extent that they do work, there are smart people who are going to say, “We ought to get on that bandwagon,” so they will start implementing it. Then, lo and behold, you can’t have a relative advantage if everybody’s doing it. So you begin search for the next one and then the next one, and then the next one. That’s inefficient. You’ve invested a lot—in money, in time, and in credibility—in launching a new initiative.
  2. Probably more important, you break faith with your people. The first time around people might be very enthusiastic, but the second time that enthusiasm might move over to some level of skepticism, and eventually it’s just downright cynicism.

What I was trying to say with The Value Effect is that when people are focused on delivering the maximum value to customers they get and they stay energized. It is not a big thing; it’s a naturally occurring phenomenon and is there for you to use—all of the time. It’s not a set of tools and techniques. It’s not going to replace all of these other programs.

NFC: I heard a story about a counselor from Toyota who was visiting the Georgetown, KY, plant from Toyota’s headquarters in Japan. He said what was really the most important part of all the quality approaches was an attitude of prevention. If some part of your everyday work has a preventive or anticipative mode of thought in it a lot of problems just never crop up. That’s pretty simple. But it can be quite effective. If you’re thinking of creating value for your customer and that’s sort of always there, present in your mind….

Guaspari: It’s simple but hard, simple as in noncomplex but hard to do. There is a fine line between simple and simple-minded but let me try this as a simple way to put what I try to tell my clients about the two questions you need to make sure everybody in your company knows how to answer:

  1. What causes customers to give their money to us rather than to the other guys?
  2. How do I as an individual affect the likelihood of that happening?

That requires standing on the shore for a while and watching the water flow by before you have to dive in and swim. I don’t want to beat your metaphor to death here, but it does require the discipline to stand on the shore for a little bit. And that is very, very hard to do. That’s what The Value Effect is about.

One of my chapters in the new book is titled “If you always do what you’ve always done you’ll always get what you always got.” It’s saying, “OK we all know we need to maintain close contact with our customers, but what kind of questions do we typically ask of our customers?” Well, we typically do satisfaction surveys where we ask customers, “How did we do?” The focus is still on us, not on them. It’s asking them to talk about us. But what we need to hear is them talking about what they want.

A second bit of conventional wisdom is that while the people who contact external customers are sales people, marketing people, and service people, I would challenge organizations to say: “Why not get everybody into direct contact with customers?” Because if what we’re after is a realignment of thinking, a mind-set shift, there’s enormous power in those customer contacts to help make that happen.

NFC: Liz Wilson, one of our former board members, once worked for a company that made lawn mowers. The “revolutionary change” she began was sending production teams to visit dealers.

Guaspari: And the scales fell from their eyes.

NFC: Yes, they would not just talk to the dealers but also to customers to see how they could make better lawnmowers.

Guaspari: There’s enormous power in terms of creating alignment when people are able to talk to customers. It also gets their customers into their heads and guts. And it taps into, another truism, the only renewable resource you have—the collective energy of the people in your organization. That kind of direct customer contact is enormously energizing for people.

So, yes—you need to stay in close contact with customers because you want information but you also want alignment and you want energy. When you get all three, then you can really make things happen. So, start with the assumption that everybody’s going to contact real customers and then somebody has to make the case as to why it’s not possible rather than the other way around.

NFC: The other thing I was thinking about was….

Guaspari: Can I tell you a story, Ned, that I think kind of encapsulates what we have been talking about?

NFC: Sure, John, fire away.

Guaspari: There’s a medium-sized property casualty insurance company headquartered in Keene, NH—National Grange Mutual Insurance Company. They’ve been around for a while. They have about 900 or 1,000 employees and write about a half billion dollars a year in premiums. That’s not huge, but it’s a good size business. They wanted to answer that evergreen of questions, “How can we deliver more value to our customers?”

One of the things they did was put together 10 sets of three-person, cross-functional teams to go out and hold value conversations with their customers. The word “conversation” was intentionally chosen. It’s not an interview or survey, it’s engaging customers to open up and talk. Each of these three-person teams consisted of a customer-contact marketing person, someone from management, and quite intentionally, a back-office person—somebody who helps run the “paper factory” of the insurance company—just as you said in the lawn mower example, somebody from production. They define their customers as the independent insurance agency as opposed to policyholders, so it was a business-to-business conversation.

So they had 30 people who had a total of 126 value conversations with 50 agencies, and each conversation lasted probably 45 minutes or an hour—an enormous amount of data.

Then they came together for a three-day meeting where they took all of these data and in a facilitative process synthesized it all into a series of a half dozen statements written in the first person, with quotation marks around them. Not necessarily direct quotes from any one customer but sentences that captured the essence of what their customers were telling them. They put all those on one piece of paper and called their “customer value guide.” This was to be their True North.

You were saying that there should be something right in front of people that helps guide their behavior. They had that and they had 30 people who became, in effect, a cadre of customer-value advocates. They then went back to their jobs all excited about what they had done and spread the word.

The CEO of the company also did a series of half-day seminars for every employee in the company. He did them for groups of 20 or 25. So, there were a total of, I think, 42 half-day seminars that he did. He and I did the seminars, but I can tell you with utter candor that it was a 50-50 thing. He was on the platform with his sleeves rolled up.

We got people talking about customer value, we got people thinking about their own experiences as customers, and then he presented the Customer Value Guide and said, “You need to think every day how do you affect our performance relative to these statements.”

Ultimately something needed to turn into a process improvement activity. So they determined that they were going to essentially a reengineer their claims handling process. A cross-functional team was put together to redesign the claims handling process but the claims handling’s tentacles reached into virtually every corner of the organization.

As you know when teams get together to do this there can be moments when there is contention. But up on the wall in the room where the team met one of the customer-value statements read, “I want my customers to feel your arm go around them when they have a claim. That’s the feeling I want my policyholders, my customers to have.” So, whenever they got to a moment where there was some contention they’d point to that and say, “That’s our tiebreaker.” It was enormously useful in focusing people’s thinking, getting everybody on the same page.

One of the interesting things they did was give their customers, the agents, more options. Historically a policyholder would file a claim and the independent agent would then be out of the loop. When they redesigned the process they designed it in such a way that they could go to the agent and say, “We can do this three ways:
We can send a check directly to the policyholder if that’s what you’d like.

  • We can send the check to you so that you can hand deliver it, therefore be a hero.
  • We can provide you with the funding and then you can write the check on your account and really look like a hero. How do you want to do it?”

The agents loved it; customer satisfaction (the agent’s satisfaction) went from 3.6 to 4.6 on a five-point scale. And they’re growing at a rate that’s two times the industry average.

Another important part of this is they determined that claims handling speed was important and a bit of a rat’s nest the way they had historically done it. So they established an adjuster center and whoever answers the phone is experienced, savvy, knowledgeable, and authorized to make a lot of decisions. The adjuster center is in one geographic spot—Auburn, MA. That also led to a lot of these improvements in customer satisfaction.

Here’s the post-script. A couple of months ago the adjuster center burned to the ground, a fire alleged to have been set by a disgruntled ex-employee of another tenant in the building. This happened at 3:30 on a Friday afternoon. Almost immediately one of the company’s employees talked his way past police, entered the building, and carried two of the computer servers out of the building on his back. When word got to their headquarters in Keene, about 50 miles away, people from Facilities, IT, HR, and Home Office Claims all showed up at the CEO’s doorstep asking, “How can we help?” Over the weekend, dozens of employees, their spouses, and their children all worked around the clock to get things up and running, so that by Monday morning they were fully operational. They hadn’t missed a beat and all of it was transparent to customers. Why did that happen? The mindset of the people in the organization had been changed—and to a great extent, it’s directly attributable to the fact that Facilities and IT had been exposed to “what’s really of value to our customers” and they saw their role in that.

NFC: Great story, John. One that we should all take to heart. What’s next for you, John? I hear you are getting a new story together for us—a new book. What can you tell us about it?

Guaspari: The point of the new book is about repositioning quality—how to tap into the energy needed, take things to the next level. It’s based on this premise: “We say we want buy-in to quality, well if you want people to buy into something you have some selling and marketing to do.” But the typical quality professional really doesn’t know a whole lot about selling and marketing. So this book is more about understanding how to talk about, how to present quality within the company. The core principles, concepts, and tenets of quality are powerful, but it matters how they are positioned, how they’re couched for people. I’m saying to quality professionals that the sales and marketing professionals in your company can be very strong allies; they can help you a lot. You ought to go to them and say, “Help me achieve buy-in. Help me understand how to apply some of the tools of sales and marketing intraorganizationally so that I can be more effective at getting buy-in.”

When I talk to sales and marketing types they get frustrated and impatient with quality initiatives. It’s like, “What do those guys have to do with me?” I’m exaggerating here, but it’s “I have more important things to do than to worry about whether or not the margins on my sales memos have hospital corners. If it is true that quality is everybody’s job, then sales and marketing should not be let off the hook. But where’s the leverage? Is the leverage in making sure that there are no typos in the sales memos? Or is the leverage in tapping their expertise to help get buy-in throughout the whole organization? If the quality function can engage, can enroll sales and marketing in that much bigger, much more impactful effort, then I think it will have more impact and sales and marketing are much more likely to go along. That’s exciting to them.

NFC: Sales and marketing should be a natural ally for quality since they want to be able to sell a quality product. Our thanks, John, for your insights and best of wishes for the new book—it’s a much needed one.

Note: For the rest of the National Grange Mutual Insurance story, follow this link: www.guaspariassociates.com/articles/We%20Make%20People%20Happy.pdf

John Guaspari has written a number of excellent articles for The Journal for Quality and Participation and is the author of five books: The Value Effect: A Murder Mystery about the Compulsive Pursuit of “The Next Big Thing”; I Know It When I See It; Theory Why; The Customer Connection: Quality for the Rest of Us; and It’s About Time!

Guaspari’s newest book will provide practical advice about how to get fuller and deeper buy-in to quality by tapping into people’s intrinsic motivators. Switched-On-Quality: How to Tap Into the Energy Needed for Fuller and Deeper Buy-In will be published in spring, 2002 by Paton Press (www.patonpress.com).

You may reach John Guaspari at guaspari@guaspariassociates.com, or visit his Web site at: www.guaspariassociates.com/ .

March 2002 News for a Change Homepage

 In This Issue...
Making Change Stick
AQP “Quest for Quality” Chapter Keeps on Going and Going and …
Denta +: A Case Study in Exceptional Customer Experience Your Employees Know More Than You–So Listen!
Contact Center Employee Satisfaction and the Bottom Line
Funky Business and Taming Talent
Upcoming AQP Courses at a Glance...
What’s Up?


 Features...
Peter Block Column

Pageturners



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