Sense and Respond: Book Forward

Dr Joel Cutcher-Gershenfeld

Senior Research Scientist, MIT Sloan School of Management, and Executive Director, MIT Engineering Systems Learning Center

In reality, this is a culture change on a massive scale. It is a shift to a culture that can see the value in recognizing ‘disconnects’ with customers. It is a shift to a culture where frontline workers have the skills and motivation to conduct root-cause analysis.

It is a shift to a culture in which learning is seen as central to business success, not just an add-on activity.

A number of leading organisations have been placing increased value on the learning from customer service operations. What sets apart the approach pioneered by the authors of this book is the fact that it is embedded in the work itself. This is not just a nice additional thing for people to do: it is at the center of the work. As a result, even some of the most routinised and hierarchical work – answering phones in a call center – has been transformed into a knowledge-driven work system.

This is not the only knowledge-driven work system of note. In manufacturing, the Lean Production systems at auto companies, aerospace companies, and others have produced astounding results through the nurturing and implementing of many thousands of improvement suggestions each year (in the leading facilities). In other sectors as well we find Lean Enterprise, Six Sigma, and other transformations that value knowledge as the engine driving continuous improvement. The authors’ work at Fujitsu has been proclaimed ‘the Toyota of service operations’. In the same way that Toyota fundamentally transformed our understanding of the flow and delivery ‘on demand’ of product, materials, and knowledge in manufacturing operations, the approach has transformed our understanding of the flow and delivery on demand of support, knowledge, and innovation in service operations.

PostCTA1

The knowledge economy is much larger than the relative handful of expert jobs that are usually highlighted in the popular press. Virtually all types of jobs face the challenge of change in this new economy. Knowledge, skills and capability are at the core of the challenge. At issue is whether the change can happen in a way that is respectful of and even enthusiastic about the contributions of all workers. Taking such an approach makes good business sense. Indeed, anything less will not consistently deliver what customers want, when they want it, at the price they are willing to pay. Moreover, it is the right thing to do – for the workforce and for society.

Delivering to specification vs. delivering to purpose

Extract from Sense and Respond: The Journey to Customer Purpose (MacMillan 2005) Stephen Parry.

Customer Value Principles Continued:

Comparing the activities and behaviours you would find in a mass-production environment with those found in a Customer Value Enterprise® (Lean Enterprise)

Delivering to specification vs. delivering to purpose
In the mass-production world, the business delivers to a contract or to specification, and endeavours not to deviate from that. In the Customer Value Enterprise® (Lean Enterprise), continuous value creation accepts that customer purpose is constantly changing and that contracts can’t keep up: instead of delivering what was specified, you need to deliver what matters. Construct your whole proposition to the marketplace around continuous value creation, and continually change your products and services to meet that proposition.

Traditional contracts and specifications can never keep up with changing customer needs. Although specifications may still be helpful in manufacturing, they will tend to constrain the delivery of services. Instead of working to a specification or contract, and defining itself by the products or services it delivers, it is better for a service organisation to define itself in terms of the value it creates. This basis leaves the organisation free to experiment and to innovate with new products and services.

Implementing lean

Increasing Variety is not the same as on-demandThis should not be confused with Mass-customisation which is an assemble to order or Flexible specialisation in a mass-production world, nothing much changes its just a more sophisticated means of controlling customers.

It is not about being flexible by offering variety as in mass-customisation it is about responding quickly to customer purpose. In the mass-customisation world, the organisationis still in control; in the Customer Value Enterprise®, the customer is in control.

More Customer Value Principles to follow soon.

©Stephen Parry 2010 All rights reserved.