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.
- 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.
- 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:
- What causes customers
to give their money to us rather than to the other
guys?
- 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
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