"How to Delight Your Customers"

Barry Berman

California Management Review

Fall, 2005, pp. 129-151

The author first explains the key differences between the concepts of customer satisfaction and customer delight:

• Satisfaction is cognitive, and based on perceptions; delight is based on emotions such as joy and excitement
• Satisfaction is based on meeting or exceeding expectations; delight comes from the surprise of a welcome out-of-the-ordinary experience
• Satisfaction is only somewhat remembered; delightful experiences are more memorable

Some of the potential positive consequences of customer delight are:

• Increased word-of-mouth promotion by customers
• Lower customer acquisition costs
• Lower selling and advertising costs
• Higher initial and repeat sales
• Increased brand equity
• Increased ability to withstand new market entrants

Some common ways that companies delight their customers are:

• Emphasizing courtesy, empathy and effort to understand customer needs
• Delivering exactly the right product or delivering unanticipated value
• Looking for ways to go beyond merely satisfying customers
• Providing novelty and entertainment
• Focusing on multiple points of contact with customers
• Delivering solutions instead of products and services

The article identifies seven organizational changes that are necessary to better deliver customer delight:

• Awareness of the need for organizational change to establish customer delight objectives
• Linking customer delight to bottom line results
• Benchmarking world-class customer satisfaction criteria
• Listening to customers to better understand what is important to them
• Empowering employees to do what is necessary to delight customers
• Emphasizing the measurement of customer loyalty and delight
• Linking performance rewards to customer satisfaction scores

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"Leadership and the Lean Transformation"

George Koenigsaecker

Manufacturing Engineering

November 2005, pp. L7-L11

The author of this article is one of the most experienced CEOs in the US regarding implementing lean manufacturing. He has started 11 different Lean transformations from the executive position of various companies.

The article begins by citing a study of senior leaders in North American manufacturing companies conducted by the Association for Manufacturing Excellence. 41% of the respondents said they did not really know what Lean was; 34% of the respondents reported that they "were familiar with the idea of Lean, but did not know how to go about achieving it"; 22% said they were working on Lean, but were not getting the expected results and were not clear whether they were doing the right things to succeed; 3% said they were implementing Lean and were achieving great results.

To answer the question "Why are there not more Lean successes?", the author has three answers:

• The key principles of Lean are very simple to understand but very difficult to integrate into daily managerial behavior
• There are very few real "master teachers" available
• Senior leaders must get true learning based on experience with Lean, and the learning cannot be delegated to others. This learning takes time. The leader must learn the lean tools through kaizen events; must learn leadership or managerial practices that support the process; must have enough personal experience with implementation (usually about 6 years) to truly internalize and believe in the principles of lean; and must make key changes in their own leadership behaviors (this takes even longer than internalizing one's belief in Lean).

The following are suggested for senior leadership that wants to create lean success:

• Accelerate your own personal learning curve by visiting a benchmark manufacturer, reading key books, and getting personal kaizen event experience
• Learn more about change management
• Find a master teacher who has the necessary decade or more of personal experience with Lean
• Develop a strategy-deployment plan
• Start the process by being on the first value stream analysis team

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"Aligning Organizational Processes With Mission: The Case of Service Excellence"

John Crotts, Duncan Dickson, and Robert Ford

Academy of Management Executive

2005, 19(3), pp. 54-68

A number of studies have emphasized the importance of aligning organizational processes with the organization's mission. The authors of this article have created an "alignment audit" to help organizations assess their current status on this important aspect of organizational functioning.

The following factors are identified in the article as key service excellence alignment factors:

• Department goals are aligned with the customer service mission
• Environmental setting/physical design communicates the customer service mission
• Stories are told about customer service excellence, and successes are celebrated
• Top management walks the service mission talk
• Performance standards are aligned with the service mission
• Budget allocations are aligned with the service mission
• Job descriptions include the job's relation to the service mission
• Recruitment ads include the service mission
• Interviews include questions about commitment to the service mission
• Orientation programs stress the service mission
• Performance appraisals assess and reward actions contributing to the service mission
• Training programs include aspects directly related to fulfilling the service mission
• Service quality is measured systematically
• Feedback on service quality is systematically provided to all employees
• The service delivery system reflects the service mission

The article also includes some specific audit items to assess each of the above factors.

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"Getting Serious About Performance Management"

Howard Risher

Compensation & Benefits Review

November/December 2005, pp. 18-26

This article takes the perspective that although there are serious, ongoing problems with any performance evaluation system, the development of a more complete performance management system will be a better bet to improve performance.

The most valuable piece of this article is a list of best practices in performance management developed by Edward Lawler:

• The performance management system should be owned by line managers instead of HR staff
• Both managers and those being appraised should receive training so they understand the process, their roles, and the skills and behaviors important to the process
• Top management needs to lead the effort and show their strong commitment to high performance and the performance management system
• Performance goals are driven by, and explicitly tied to, the business strategy
• Employees should receive regular, ongoing feedback on their performance from managers throughout the year
• Feedback should focus on competencies, development planning, and assessments of how individuals achieve their results
• There should be ties between performance ratings and financial rewards
• Managers should hold meetings to compare and level their ratings amongst themselves
• Web-enabled systems should be used to help integrate performance data with performance plans and ratings

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"Up to Code: Does Your Company's Conduct Meet World-Class Standards?"

L. Paine, R. Deshpande, J. Margolis, and K. Bettcher

Harvard Business Review

December 2005, pp. 122-133

The authors of this article distilled the precepts for corporate conduct from 23 different sources, including multiparty codes, individual company codes, and legal/regulatory sources. The results identified eight underlying ethical principles that can be used to assess or create a company code of conduct:

• Fiduciary Principle—Be loyal to the interests of the company; provide a fair return on investment to investors; safeguard the company's legitimate interests through due diligence
• Property Principle—Protect company assets and avoid theft from the company or competitors
• Reliability Principle—Follow through on promises, contracts, and commitments
• Transparency Principle—Be honest, open, and truthful; avoid deception of customers or competitors
• Dignity Principle—Respect the individual; protect employee health and safety; respect privacy and confidentiality; help develop employee skills and knowledge
• Fairness Principle—Apply the principles of fair dealing, fair treatment, fair competition, and fair process
• Citizenship Principle—Respect the law; protect the environment; cooperate with authorities; avoid improper political involvement; contribute to the social and economic good of both the local community and the world
• Responsiveness Principle—Address the concerns of customers, employees, and investors; support public policies that promote positive social and economic development

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From GP Deltapoint: The Key Predictor of Successful Transformations

Mike Bresko, GP Deltapoint
 

Koenigsaecker cites a survey of senior leaders that shows that only 3% were implementing Lean and achieving great results. Other studies provide corroboration stating that two-thirds of change initiatives fail to live up to expectations. (Nelson P. Repenning and John D. Sterman, McKinsey & Company, Arthur D. Little)

Although it is true that many companies fail to achieve results, a number of careful studies demonstrate that companies making a serious commitment to Lean, TPM, Six Sigma, and other change initiatives, outperform their competitors (G. Easton and S. Jarrell and K. Hendricks and V. R. Singhal).

But, what is a serious commitment? In the October 2005 QUICK Update, we summarized a series of articles dating to 2003 that highlight the change process. These articles recommend establishing a project management process for change; chartering and mobilizing the change effort; establishing a vision and goals; creating passion for the change, and similar recommendations. We believe these may facilitate successful change, however, having these recommendations in place do not necessarily demonstrate serious commitment.

When Koenigsaecker answers the question, "why aren't there more successes" he tells senior leaders to learn and integrate lean into their daily behaviors. If the leaders have a high level of knowledge and commitment, then all of the other factors leading to success fall into place.

Building on Koenigsaecker's recommendations, we offer a few more:

• First, don't make learning ad hoc, structure a learning plan throughout the transformation and beyond. Our own five-step Pathway to Excellence includes specific learning events and coaching activities as leaders engage in defining opportunities, prioritizing solutions, improving and standardizing, and striving for excellence.
• Second, go to the front line to observe, learn, and apply.
• Third, take ownership of developing a system for operating and managing based on lean principles then driving the system throughout the organization.
• Finally, measure the level of serious commitment with these questions: "Am I a model learner? Am I a true believer? Have I converted my beliefs into actions?"

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