International Process and Performance Institute

Customer Interactions - How important are they?

Every time - and I do mean EVERY TIME - a customer interacts with a business that interaction plays a significant role in the business's profitable revenue (growth or shrinkage). Every customer interaction is an opporunity for us as a business to differeniate ourselves because the hard reality is that most of us aren't very good at it at all.

The only thing our customers care about are the interactions they have with us. Each contact from a customer should be greeted as what it really is, an opportunity show our customers that we not only care, we care about what they care about and our there to make our customers' lives simpler, easier and more successful.

Things like how we are available, how quickly we respond, how good we are at understanding what the customer wants from us (precluded by our understanding of the customer's need), and (of course) how well we do at fulfilling that need are fast becoming the "make or break" points for customer loyalty.

At the end of the day the only thing that really matters to our customers are these interaction points, these customer-facing or customer-oriented processes. And the ONLY thing that matters is how the customer judges that interaction - and they (we) absolutely judge the businesses we interact with.

The overall game plan is to eliminate every possible reason that we can for our customers to need to contact us, then when they do (there will still be plenty of contacts I promise you) we need to make sure we respond when our customers expect us to, in the way they expect us to, and to help them achieve their goal (why they contacted us!) as quickly and easily as possible.

This stuff should be on every CXO's agenda... period.

The Institute has just approved a new Certification course - the Certified Process Manager program - and it's an important step in giving people the ability to drive new levels of success in their business. Considering the economic "challenges" we seem to be facing now it couldn't come at a better time.

What need does this program serve? For more indepth information on the course and its purpose you should visit https://ipapi.org/open_courses.php#CPM. Under Learn More there are several resources that should help you place this program into perspective.

In a "nutshell" though, this course addresses the high level view of the organization via a new perspective on Enterprise Architecture (no, I'm not talking about IT Enterprise Architecture I'm talking about Business Enterprise Architecture). The CPM program takes us to a "place" that enables us to understand, visualize, set goals for, and act upon those goals as an Enterprise - without getting snared in the complexity of details normally encountered when we try to build this kind of enterprise perspective. Once again we are taking people to a new place characterized by simplicity striving to reach that ultimate state of sophistication as denoted by Leonardo da Vinci.

The course also covers Process Strategy to increase customer value propositions, improve customer satisifaction and achieve internal buy-in. No matter what we do the need to get the right goals in place along with building internal support for our goals. Building internal support of those goals is a critical part of making postive change happen quickly. The Process Strategy component of the CPM course does just that.

Lastly, the program includes a section called Process Management - where we show how to develop process "Health" measures that make all the difference in evaluating the performance of our improvement activities and protecting process gains as we achieve them. Left unprotected, most process gains are subject to a slow but steady slippage away from the original value enhancement - and that's something we want to make sure NEVER happens. This section also addresses key auditing techniques and ways to expand organizational behaviors supporting customer-centricity, quality, and process efficiency.

Implied within the program is something very important, perhaps more so now then at other times though I think that is more a perception than a reality. When economic challenges exist, the ability to achieve changes that dramatically increase customer satisfaction - quickly - means we can improve our customer retention. When the economy is "down," retaining our customer base is a really big deal. Having the means to do so quickly, with gains often seen within 30 days, is the kind of help many of us are looking for. The CPM program is now here to address that need.

In the longer view though this kind of approach is a different value. The more successful we are at retaining our existing customers, at building very strong customer loyalty, at delivering on customer value propositions that are seen as a real differentiator by our customers; the better we are positioned for strong business growth and market expansion when economies are stronger - or booming.

I think that is the most interesting dynamic of the current world market. Call it a market reset, recession, depression, slow-down, melt-down or whatever else you like - we are in a economically challenged environment. Guess what is waiting for us on the other side of this "down-turn?" That's right, a market boom.

Have you any guess as to which organizations are going to reap the benefits of the boom to follow? How do you think those organizations that improve their customer experiences, increase customer satisifaction, build customer loyalty, and develop enhanced customer value propositions NOW are going to do when the "boom" comes?

It's not hard to figure that one out, is it?

 

This is another one of those late-night rambles that began this Monday with the intent of being a blog on the Customer Expectation Management Method (CEMM), in anticipation of the NY area class scheduled for March 2-4.

 

The post took a dangerous turn on Tuesday, after I drove to the bank , which I will describe in detail. Let's hope as I finish it this evening I won't be driving off a cliff screaming in horror.

 

Monday - Customer Expectation Management Method (CEMM)

 

You see, one of the critical concepts in CEMM (and ITSM/ITIL for that matter) is the Successful Customer Outcome (SCO). In ITIL version 3, 'an outcome-based definition of services ensures that managers plan and execute all aspects of service management entirely from the perspective of what is valuable to the customer' (see Service Strategy, page 67).

 

IT naturally views the business as its customer. CEMM is oriented towards the business, and attempts to have the business take an 'outside-in' perspective of the customer (which in this case study is me). 

Successful customer outcome (SCO) - The resulting outcome, and the "process" experienced by the customer behind that outcome in toto, that the customer would define as making their lives simpler, easier and more successful.

- International Process and Performance Institute

The CEMM approach uses a unique SCO mind-mapping technique to get to the true nature of SCO, from the customer's perspective (i.e., 'outside-in'). Of course if the business does not have this expectation set properly, then all the technology integration in the world will not make a difference.

 

Tuesday - Bad Trip to the Bankster

 

This story is true.

 

When I opened a business account with my bank some time ago, they ran a promotion for a free line of credit. While I didn't need it, you don't look a gift horse in the mouth so I accepted the offer which waived the $250 fee.

 

Of course a year passed and I received a statement which indicated they were planning on charging me a $250 annual fee to continue the credit line. When I called to let them know I really didn't need the credit line, they said I had to come down to the branch and sign some paperwork to cancel the agreement.

 

So I took a trip to the bank and here's what happened.

 

My banker (a nice guy) said he hated to see me cancel this credit line, since once I did it might be almost impossible to reinstate it since the bank was not issuing any new lines of credit. He said that if I opened an additional business account with $500 in new funds he could give me a $200 Reward (for opening the new checking account), get the branch manager to adjust the Credit Line fee by $50, and give me another $50 in Cash Bonuses (for completing an Account Review and purchasing a new product).

 

To make it easy for me he said I could get the $500 from the ATM, so I walked outside to the ATM (which is near the drive-up window) and withdrew $500. I gave him the money and he did about 20-30 minutes of paperwork.

 

When I told him I really didn't want a second checking account, he said that I could cancel it within the first 90 days and transfer the funds back to my original checking account.

 

So I now have my Line of Credit and a second business checking account (neither of which I really wanted). Of course I also had an extra $50 in cash, but I'll have to watch for the funds to appear in my (two) accounts and remind myself to cancel the second account sometime early next year.

 

Today - We need some serious Cultural Change

 

You don't have to know the intimate details of CEMM to understand there's plenty of non value-added work in the above example. True, I did get a line of credit and 50 bucks, but that's not really what I wanted. In fact, the thought of using that credit line just makes me even more uncomfortable.

 

To make matters worse, while surfing the web for this posting I came across the usual horror stories about banksters and bailouts. I originally saw the name 'Banksters' from an article by Michael Hudson at:

 

http://www.globalresearch.ca/index.php?context=va&aid=10279

 

From what I can tell, Time Magazine coined the term Banksters back in 1930. A combination of Banker and Gangster... 

 

Moving Mountains with CEMM

 

The Customer Expectation Management Method (CEMM) looks at 3 things that help us identify causes of work, in an effort to remove non value-added work:

• Moments of Truth
• Break Points
• Business Rules

Moments of Truth exist any time a customer touches a process or a process touches a customer. Break Points occur anywhere a hand-off of any kind occurs in a process and Business Rules are the explicit and implied rules of the process that form or influence the behavior of the process.

 

Outside-in thinking brings our customers into the 1st person perspective as our primary motivator. We may still keep the needs and concerns of the organization in the 1st person as well. This creates a powerful balance where we serve our needs within the bigger picture of serving our customers' needs.

 

The IPAPI CEM Method™ uses outside-in thinking to align processes to our customers by articulating what our customers would see as a successful customer outcome (SCO) from our processes. We also capture a good deal of context to help us get the SCO right with SCO Mind Mapping.

 

People want money. They do NOT want loans, and granting them a loan they cannot afford to pay is even worse. I remember thinking of Bankers as people you trusted to give you conservative financial advice... "a penny saved is a penny earned", remember?

 

My experience with the Bank is a reflection of a larger, cultural defect in our financial system. While I don't expect CEMM to remedy THAT, I can say with certainty that organizations looking to integrate technology into the business via ITSM/ITIL had better make sure the business really understands the customers expectations.

 

If that does not happen, you'll simply reach the edge of the cliff faster.

 

The man who moves a mountain begins by carrying away small stones.

- Confucius

 

 

 

 

There is a certain amount of gloom and doom surrounding us right now. We are in a time of change, one that is pressing us with financial and economic impacts. I know some people see a bleak picture ahead. Not me. I see nothing but opportunity that is waiting for each and every one of us!

Am I an optimist? I don't think so. I believe I am more of a realist, and the reality is that right now there are opportunities all around us!

NOW is the time to focus on value creation, doing those things that create customer value. There is plenty of purchasing money still flowing, the opportunity is to make sure you have as much flowing to you (your business) as possible. How do you do that? By making your customers' lives simpler, easier and more successful!

It's a GREAT TIME to build market share. What happens if you do that? You will "weather the storm" in good shape and be perfectly positioned to reap the benefits of the boom that will follow (and it will follow).

If you DO THAT while decreasing costs (efficiency) then you are going to be in a really sweet place. The world will become your "oyster," and the business success you will achieve will make your Thanksgivings in the future ones of great bounty. And you can do that, for a lot less (time, cost) than you are spending trying to hunker down and survive until things get "better."

For me, I see this time of change as a great opportunity to challenge the "status quo." With the approach we take to process (the CPP and CPM programs) we KNOW that identifying the right actions to take WILL increase customer value WHILE decreasing costs. That's what I'm talking about folks. While we can't "afford" to sink costs into expensive and complicated "initiatives" we CAN identify low-cost opportunities to improve the experience we provide to our customers while reducing OUR COSTS for delivering that.

Can you imagine a better time to do just that?

(if that sounds good drop us a line through our contact form, subject: Building Market Share)

http://ipapi.org/pg/contact

Process Efficiency

Process efficiency is the measure of a process's ability to be performed without activities that are non value-add or unintentional.

Process efficiency - The ratio of value-added work to non value-added work plus unintentional work created by a process.

A process that is completely efficient (100% efficiency) creates no unintentional work, nor does it have any non value-added work within it.

Every process represents a certain amount of work performed by people, machines and sometimes systems. When determining the efficiency of a process, we need to identify the causes of work in a process and then try to place those causes into perspective in respect to value-add, non value-add and unintentional work (which is always non value-add).

Process Quality

There are three measures of process quality.

Statistical Process Quality is a measure of the likelihood that the process will deviate from the intended “process flow” in such a way that the consumer of the process outcome will not get what they expect – at least not in the way (what, where, when, how) they expected it. In a perfect process (Quality of 100%) no deviations would ever occur.

SPQ is a direct measure of process quality. The higher the percentage, the higher the quality of the process.

Obviously what we are looking for in process quality is the ability of a process to produce its intended outcome exactly as it is intended, including the underlying process it went through to get there. In a perfected process, there would be no deviation - ever.

The Points of Failure factor is the second quality measure we can use to assess process quality. It applies to customer-facing processes and processes where we have identified the internal consumer (customer) of the process outcome.

The POF factor is a key measure of customer satisfaction, assessing the impact of Moments of Truth and their exponential affect on the customer of the process (each “process deviation” experienced at a Moment of Truth exponentially increases the process customer’s dissatisfaction level). Obviously when contrasting Current State versus Future State we should see a decrease in the POF factor in the Future State if we are expecting the quality of the process to be improved.

The POF factor is a relative process quality measure. The lower the value, the higher the quality of the process.

Finally, there is the issue of Fitness of Use – the quality definition made so famous by Dr. Juran in the 1940’s. Juran defined quality as “Fitness of Use as determined by the User”. This brings into question our intended outcome of the process (and there better be an intended outcome that is clearly articulated or things are in a real mess).

The question of Fitness of Use can only be answered by the User, or at least by developing the perspective of the user from their Point of View (for customers of the business this is termed the “Outside-in” perspective).

So the third process quality measure deals with how well the process is aligned to its “customer.” That requires a clearly articulated Intended Outcome that can be tested against what the customer (User) desires from the process, within their personal context and even in respect to any higher-level process they are actually engaged in.

This is a highly subjective quality assessment although in many ways it is the most important assessment we have on process quality.

How often do we know these impacts when we take on business process management and improvement initiatives? Very rarely to be frank and honest. Far too often we fail in our role as process stewards, to hold ourselves accountable to the fundamentals of process improvement. It's a choice that we don't often realize we have or that we are making by our very actions.

The choice is whether or not we are going to be true professional professionals. What choice have you made?

 

I just returned from Las Vegas where I delivered the closing keynote at the IQPC 9^th Annual BPM Summit.  It was a great event and the participants said they were taking away a lot of good stuff.  One of the topics discussed, and with no small interest, was Best Practice Processes and Process Standardization.  One of the speakers on this topic, Linda Washington, Assistant Secretary for Administration at USDOT, showed us what DOT has done in this area and it is extremely impressive.  As a taxpayer I was relieved to know at least DOT has their act together; I’m hoping other departments of the US government are paying attention.

In public sector processes in general and in the case of a few private sector processes, best practices and process standardization makes sense, but not always.  When doesn’t it?  When customer expectations of a process are different and when market differentiation matters. This happens occasionally in government and frequently in business.

Let’s look at an example, like the process of bringing employees into an organization; also known as the hiring process.  If you are Wal-Mart, the people you bring in are not a significant differentiator for you in the market.  I’m not saying they don’t make a difference, because they do.  What I’m saying is they just don’t add significantly to the value proposition in attracting and keeping customers.  Wal-Mart’s value proposition is predominantly price driven. 

In contrast, let’s look at the consultancy market with the likes of a PWC (PriceWaterhouseCoopers), KPMG or the like.  Their consultants are actually a key ingredient in the product they offer: expertise and knowledge work.  The people they hire are part of the “secret sauce” if you will.  Therefore, this process has the potential to be a market differentiator for them.  The process Wal-Mart uses is not going to help these companies differentiate themselves.  In fact, for them it would be lunacy to use a best practice process for this situation. 

The only appropriate place to use best practice processes in the private sector are with internal processes (ones that don’t touch the customer) which are not market differentiators or provide inputs to customer facing processes.  Frankly, in most businesses, this is not very many processes.

 

For those business people who may be unfamiliar with the concept of IT Service Management, (often called ITIL®) let's start with a very brief explanation.

As information technology increasingly underpins key business processes, sometimes actually becoming the company's product, the way technology is managed has come under fire. It is no longer adequate to manage 'infrastructure' --- individual servers, routers, applications and so on --- the organization must take a holistic, end-to-end view of technology from the context of critical business processes.

For this reason there are a number of frameworks that IT is looking to for guidance on establishing internal processes to effectively and efficiently manage technology from this new paradigm, the most popular of which is the IT Infrastructure Library or ITIL®.

What is essential for successful adoption of ITIL®  and/or IT service management within an organization is active participation from the business. Unfortunately, there are a number of reasons why it is common for the business side of the house to not be involved in these quality improvement programs. 

In some cases IT does not seek to engage the business as a result of fear due to poor working relationships with the business. In others, the business is well aware of the need to make difficult decisions and trade-offs that they are not currently being held accountable for and therefore avoid participation.

When the business finally gets involved, it is easy to get intoxicated with work flow automation and technology, (which is also right in IT's comfort zone). The focus on the customer and business process improvement is lost.

Customer Expectation Management: Minding the Gap

One simply has to read the guidance to see the relationship between Customer Expectation Management (CEM) and ITIL®:

"Perceptions of value are influenced by expectations.  ... What the customer values is frequently different from what the IT organization believes it provides. Mind the gap."                                            - ITIL® Service Strategy, Section 3.1 - Value Creation

More specifically, there are some important areas that IPAPI CEM Method™ can help with ITSM adoption.

First, getting the business to define business processes from the customer perspective (not 'the system') is an obvious benefit. Without this orientation by the business it is likely that key business processes will not be defined from the outside-in, resulting in investments in automation that are not truly customer-aligned. Indeed, if we successfully achieve technology integration with the business the risks associated with a lack of customer focus could increase significantly.

The increasing pace of technological change brings more complexity to IT infrastructures. In many cases the IT organization is drowning in an n-tier, virtualized and distributed technology infrastructure. The IPAPI CEM Method™ seeks to reduce the complexity of business processes precisely at a time when complexity is an increasing burden on the IT staff.

The IPAPI CEM Method™ also offers an approach that is based on simple process activity modeling (via the Process Activity List) that can help both IT and the business avoid detailed workflows when that is not what is needed.

This approach can provide the IT organization with a simple and quick way of validating key business processes, limiting time consuming re-engineering and analysis to areas that have high customer value.

Business & IT: Two Lanes on the Same Highway

Making sure your ITSM road map has a business lane is fundamental to success, and managing customer expectations applies to both internal and external customers.

The IPAPI CEM Method™ and ITIL®'s Service Strategy share common principles that can be used effectively in both BPM and ITSM initiatives. Make sure your road map has both an IT and a business lane that share a common vision of where you're going.

I believe that incorporating the CEM Method™ as part of your ITSM improvement program can help you mind those gaps, but I'd be interested to know:

If you are on a journey to ITSM, how involved is your business?

How are you documenting key business processes for the IT organization to map technology to?

What challenges are you facing?

So you think you know process, right? Perhaps you work with process regularly. Maybe you are even a process professional, working with process all of the time. But have you ever seen a REAL PROCESS? Chances are you haven't.

Now wait a minute Terry! What do you mean, "I haven't seen a real process!" I work with process all of the time, I live and breathe it. I see processes every single day...

Maybe you do, and maybe you don't.

One of the dicussion points that comes up over and over is how do we bridge the gap between our technology and business perspectives? Why does there seem to be such an insurmountable gulf between us? Oh, and while we're at it, what about bridging the gap between expected benefits and realized benefits? Both technology and business perspectives share in that frustration.

And yet the answer to these questions is so obvious. While the questions may differ, they are variations of the same issue and the answer we seek is the answer to both.

All right, come on! If you know the answer then just say it, already!

Okay, OKAY :)

The answer is that REAL PROCESS is much like a theatrical production. It has a script. It has actors. It has sequence. It has props and it has a lot of different people involved in the overall production of the show.

We can break down a theatrical production in many ways, like the timing chart and all of the activities the supporting people must do at certain times to make the show "work" right. You know... lights, props, sound and so forth. That actually is very similar to the kind of process models many of us work with in IT.

We also have the script, which includes the actors, when they enter and exit, what they are supposed to say and do, and in what order. That is also very similar to the kind of process models we often create in "human-centric" BPM products and business analysis.

But the SHOW itself is the actual process! The process only becomes "real" when we put on the show. The real interactions of Process Actors (people, systems, machines) - with all of the nuance, contextual character, and "in the moment" relevance that really exists in our organizations - is what makes up a real process. Anything else is at best a lifeless caricature of a real process and at worst a travesty...

Think about it. What makes anyone actually THINK that a process model or something in a software product is really "the process?" It's not something we should ever need to discuss. It's not something we should ever consider and it's really a sad reflection on us that most of us are willing to do just that.

Of course there are many reasons why we do what we do. But if you want to become a real process expert. If you want to improve real process. If you want to make a real difference then understanding that the only expression of a process that is truly real is the STAGE SHOW that happens when work in the process actually gets done must be part of your process perspective.

It's an easy concept to visualize but it's not so easy to act on. Process "experts" rarely find themselves experiencing real process first hand. But understanding what real process is gives us that one needed ingredient for us to find new ways to create value in the work we do. Without this ingredient you are doing nothing but wasting your time, your company's money, frustrating your fellow workers (especially those that must live with the affects you have on their work), and driving away your customers.

And while some people may point to cases where discrete "process initiatives" produced stellar results, I suggest you look under the covers a bit deeper to see how much real benefit is there. But of course sometimes even without the magic ingredient something will work... as my Grandpapa used to say "Even a blind hog finds an acorn every now and again."

A week from today I will be presenting the latest material in the IPAPI CPP™ program at the open course in Dallas. I think this is going to be an "AHA" moment, as this mateiral makes the program even more actionable, managable and beneficial.

Some of the interesting points wovern into this revised program include historical influences from people like Drs. Deming and Juran as well as Richard Normann - the person who first gave us an operational perspective on the use of Moments of Truth (which influenced Jan Carlzson's use of same at SAS and subsequent book on the subject).

So would it surprise you to know that Break Points have been a key part of management thinking from Deming's early work? That "outside in" thinking and "successful customer outcomes" were a core part of Juran's quality philosophy in the 1940's? A lot of people don't know that. The influence of leaders like these are the true foundation of the CPP program and we gratefully acknowledge these important works where they have influenced our program.

I will also be introducing the concept of "Process Actors" into the mix, along with process baselining and linkage of Action Plans to SCO statements.

I think its going to fun and I am looking forward to giving this seminal class in Dallas!

Members of IPAPI can join me in developing the foundational work for the next certification on our agenda - the IPAPI CPM™ program (Certified Process Manager). This course, which is starting with my whitepaper describing the Process Maturity Model, will focus on a flexible and adaptable way to manage process on an organization al basis up to (and including) the Enterprise - along with giving us a way to measure and assess our process maturity over time.

If all goes well we hope to launch that program on late Q1 2009 or early Q2.

While our Board of Directors is set for now (myself, Alex Morse, Don Smith) our next action is to establish our Advisory Board. We have a few people already identified for this important volunteer role (currently all roles in IPAPI are volunteer) in IPAPI and are looking forward to establsih a world-class group of Advisors who are willing to spend a regular portion of their valuable time helping us to grow IPAPI into what we see as a very bright future.

That's about as far as we have taken things so far. The Board has decided to take things a step at a time, rather than build out a comprehensive roadmap that we have to change over and over again. Although I will tell you that there are several other key initiatives we will be acting on early next year that will enable us to embrace a much larger audience in respect to building our reach in the process community.

 

How often do process-based initiatives (BPM) fail to achieve their intended goal? Not a popular question with an even less popular answer. Far too often process-based initiatives fail to accomplish what we believe they will.

I’ve been living and breathing process for some time now and I can tell you that the approaches to process initiatives very widely – so widely that the extremes bear virtually no resemblance other than the common use of a few words.

One process perspective sees improvement as a 4 year investment with the first 2 years spend building the foundation from which value can be realized (that means no return on investment for at least 2 years).

Another sees it as workflow automation of existing processes, with automation itself being the “value creator.”

Still another sees it as the re-articulation of the architecture of the business in the form of flexible and reusable components.... services you know.

Yet there are companies that are leveraging process for quick wins that produce tangible results.

Take MidlandHR (http://www.midlandhr.com) for example, a human resource management company in the UK that combines their people talents in process improvement with their software. Ask them how long it takes to show results from a process improvement activity. I’m willing to bet you’ll get an answer in weeks to months, not months to years.

Ask their customers about value creation while you’re at it (I dare you too if you are in one of those “camps” alluded to early in this article). The answers you get will challenge your beliefs to their very foundations.

The problem we are faced in improving process comes from two places: our perspective of the problem and our predisposition to the solution. The simple fact is you can’t solve a problem if you don’t have it in the right perspective and you can’t implement a solution if you don’t understand why the solution actually addresses the root cause of the problem.

That’s what we experience in the IPAPI Certified Process Professional program. We find people with the wrong perspective and an engrained disposition to a solution mindset. We reset those limitations by giving people new perspectives and a solution mindset that addresses the very causes of the problems we face.

And it doesn’t take years. It doesn’t demand automation. It doesn’t require a new architecture. These may all be part of the “solution matrix” over time as we improve our processes on an organizational scale but it is characterized by short-term success stories one after another.

Isn’t that what we all want?