The "Voice of the Customer" (VOC) is a phrase from Six Sigma that means the opinions and needs of your customers are being considered as you develop your products and services. In other words, the customer's desires are always foremost on your mind. Do you frequently ask yourself, "What is the voice of our customer?" "What do they really want from us?"
Customers are always looking for companies they can trust. They reward those that meet or exceed their expectations; they allow the others to fail. Everything about your business—advertising, cleanliness, return merchandise policy, courtesy and knowledge of employees, product selection, location, delivery time, etc.—is what matters to them, NOT JUST LOW PRICE! Your entire business is your product, and it must sparkle. When it does, you become the "best deal" to your target customer.
What is critically important?
Each customer contact is a moment of truth, a time when a relationship is either made or broken. From the customer's point of view, certain things are "Critical to Quality" (CTQ). You must meet these customer CTQ specifications or expectations precisely, or you will lose their business.
In a previous life, I had a business that manufactured framed art. We also contracted with large companies like American Greetings to make small framed gift items. On one occasion, we shipped 5,000 plaques to a major distributor of religious books and gifts. To our shock, the customer called to report that the inspirational message on the plaque contained a misspelled word. The word "privilege," was printed as "priviledge." Neither our company nor theirs caught the mistake. They shipped the product back, and we remade the 5,000 plaques. From the customer's point of view, the product did not meet specifications. (We split the cost of rework.)
At another time, we had a hot product—silhouetted trees printed on glass and set against recessed background prints.
This item blew out the doors of our retail customers. We manufactured around the clock but could not keep up with the demand. Our shipments got further and further behind. Some customers canceled their orders. We failed to meet delivery expectations.
After you learn from the voice of the customer what is critical to quality in their minds, you must ensure that your business systems help you deliver on your promise. Nothing can be left to chance. When you win the trust of customers, they will become raving fans.
Four Customer Expectations
Remember this: All customers want four important things from your product or service.
- High Quality - No defects; does what it is supposed to do; as good or better than the competition.
- Speed - On schedule; meets deadline; no delay.
- Low Cost - Good value; competitively priced; occasional bargains.
- Pleasurable - Good buying experience (clean store, knowledgeable sales people, etc.); "killer customer care."
While you are in The Zone tomorrow, quickly list what is critical to quality for your customers. Consider the four criteria above. Then find a way to enhance your business systems and elevate your product or service beyond your competition. Your customers will love you for it, and reward you handsomely!
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The holidays are upon us and with them come many traditions. What are your Thanksgiving traditions? My thirty-five year old son plays "turkey football" every Thanksgiving morning with his high school friends. Do you serve the customary Thanksgiving dinner, watch the Macy's Thanksgiving Day Parade, or observe customs from your family background or culture?
Traditions are Systems
When you repeat any activity because it gives you good results, you have created a system. All family traditions are systems put in place to produce expected happy results. Great families create, borrow, or pass down traditions from one generation to another.
This summer, our family set up an outdoor theater in the backyard to show family videos I've created over the years. Everyone had a great time laughing and remembering the good old days. We decided to make it an annual tradition.
What are Your Business Traditions?
Good businesses also create traditions that customers or employees enjoy and anticipate with eagerness. My employees loved pizza days to celebrate success. Some businesses have dress-down Fridays, a summer picnic, or Christmas party. My son-in-law rents a theater for his customers just before the public showing of a blockbuster movie. Companies often have traditional sales promotions that customers look forward to—sidewalk sales, dollar days, and midnight specials.
These are all business systems. They are anticipated. They are fun. They get results. They become more popular over time. Traditions strengthen the bonds between the company and its customers or employees. They energize people and foster creativity and excitement.
Good traditions will set your company apart in the marketplace and add pizzazz to your business culture.
Next time you are in the Zone, consider starting one new business tradition. Better yet, invite a secretary or a small committee to come up with some ideas.
Once you implement a good system, it is a marvel to watch it consistently accomplish exactly what you planned!
And don't forget the always appropriate tradition of expressing gratitude. There is much to be thankful for; wouldn't you agree?
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One obstacle stands above all the rest that prevents people from becoming System Thinkers and experiencing massive improvements to their business. PEOPLE DON'T KNOW WHAT THEY DON'T KNOW! Becoming a Systems Thinker is a process based upon the "four stages of competence" learning model. Take a minute to ponder these four stages as they relate to you and your organization.
- Unconscious incompetence - You don't know what you don't know. You are blissfully ignorant of your deficiency or don't believe that System Thinking is relevant. You don't realize the remarkable benefits of effective systems and processes. You haven't a clue how to develop good systems and probably haven't had any desire to do so. You likely have a seat-of-the-pants operation, with rudimentary systems created out of necessity by workers.
- Conscious incompetence - Maybe you read E-Myth Revisited by Michael Gerber, or my newsletter, and a light bulb came on. You notice talk of "good systems" and "bad systems" in daily life. You now realize your deficiency--that perhaps Systems Thinking is important, and you need to learn this skill to reach your business goals. However, you're not sure where to begin and how exactly to create effective systems. You make a commitment to learn more
- Conscious competence - You begin to acquire new knowledge. Systems Thinking requires conscious effort and creating effective systems is painstaking. With ever-more practice and experience, the process becomes increasingly routine. Your confidence grows as you implement successful systems and refine your new skill--the MASTER SKILL of entrepreneurs.
- Unconscious competence - Systems Thinking is now easy and instinctive. You've had so much practice with developing systems that it has become "second nature"--a habit! You perform the task without conscious effort and with automatic ease. You are alert to cause and effect, continually refining your systems to solve problems and improve business performance. Without thinking, you teach and show others the ways of a Systems Thinker.
Become a Unconscious Competent Organization
We are all "unconscious competent" at such things as reading, typing, driving, and perhaps some sports. Are you ready to turn your business into an unconscious competent organization?
By developing effective business systems and processes, your business will operate at peak performance even when you are not around. You can take time off, or get someone to run the business for you. After all, an unconscious competent organization runs on autopilot. It has finally become what you always dreamed it would be.
Decide what stage you are at and press forward to the next stage. Experience the awakening and exhilaration that come as you take each important step. Believe me, I know. I've come through the process, just like you will!
Check out these related articles:
10 Values of a Systems Thinker!
Are You a Systems Thinker?
Systems Thinking Can Double Your Sales!
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Poor performance and frustration within an organization are symptoms of broken systems or processes. A law of physics states that all things, including business systems, naturally tend to break down over time.
You will periodically need to repair, improve, or elevate your business systems to a higher level of functioning. For example, the carpenter could sharpen his saw blade, buy a new blade with carbide tips, or even replace the saw with one that has a bigger motor--each takes him to a higher level of performance.
Stand back for a moment and look at your under performing system. Have you made any faulty assumptions? It is possible that your understanding of either the problem or the solution is wrong. You may need to re-examine your logic or perhaps drill-down to find the root cause of the problem; the apparent cause is frequently incorrect.
Discover the Cause of System Failure
Here are ten possible reasons why you are experiencing system breakdowns in your organization:
- Managers do not have sufficient customer or worker input during the system development process. (You haven't listened carefully to what your customers or employees want or need. Ask again!)
- The system is not in writing or lacks clarity, ownership, measurement, or reporting. (Your system is haphazard, ever changing, and passed on by word-of-mouth. Get it formalized!)
- The system is too slow or produces too many defects, both of which drive up costs. (Your system suffers from poor design, inadequate training, or no measurement and feedback. Take steps to eliminate defects and delay!)
- The system is overloaded and cannot handle the demand. (In-baskets are full or things are stacked up waiting to be worked on. Increase the capacity of the system. Eliminate the bottleneck!)
- The system lacks focus. It is too broad, far reaching, or complex; it has more than one purpose or objective. (Break the system into smaller, more manageable subsystems. Reduce and simplify!)
- The system is dependent upon other systems that are not performing well. (Use the "5-Why Analysis" to identify the true problem system; then go fix it first!)
- Data and feedback are used to punish people rather than to improve performance. (Most problems are your fault for not creating a good system in the first place. Provide effective training. Look first for faulty systems, not faulty people!)
- The new system is not carefully deployed. (Workers lack preparation or training. They don't have the desire to discontinue the old system or the patience to let the new system succeed. They may fear change or worry about having their performance measured. Deploy new systems with preparation, sensitivity, and encouragement. Let people know what's in it for them!)
- Information about system performance is based on gut feelings or bad data and does not reflect the true condition. (Your gut is good at sensing a problem, but not so good at diagnosing the problem. Get the facts--MEASURE!)
- Managers fail to face the brutal facts about system failures. (Confront the truth about problems that emerge from personal frustration, customer complaints or financial data. Get real, and get going!)
Do This Now
While in the Zone tomorrow, think about the most frustrating part of your business. What system does that frustration point too--lead generation, customer service, collections, production--or perhaps a more specific subsystem? Then, run the system past the ten reasons for failure described above. You will discover where to focus your improvement efforts.
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Your entire business is a system. The recipe for an excellent organization includes the right people, a good plan, the will to excel, a philosophy of continuous improvement, and high-performance business systems and processes. The resulting culture produces an organization with lasting value--one that you can sell, replicate, or let someone run for you.
Creating a culture of excellence is like creating a brand; it takes some time, but when it catches on, it is quite remarkable! Transforming your organization, Mr. or Ms. Business Owner, is your number one task. It is the Master Skill!
In describing great companies, Jim Collins said:
"The best companies never transform to greatness in 'one fell swoop.' There is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Sustainable transformations [to greatness] follow a predictable pattern of build-up and breakthrough. Like pushing on a giant heavy flywheel, it takes a lot of effort to get the thing moving at all, but with persistent pushing in a consistent direction over a long period of time, the flywheel builds momentum, eventually hitting a point of breakthrough" (Good to Great).
This transformation to greatness—becoming a culture of excellence—requires steady dedication to the development of effective business systems and processes. There is no other way!
What is Your Culture?
An organization's culture includes its values, goals, behaviors, language, organizational structure and relationships, ways of talking, dressing and interacting, traditions and rituals, logos and symbols, technologies, processes, and methods for improving behavior and performance. Like snowflakes and fingerprints, no two business cultures are the same.
I've seen business cultures of oppression and fear, cultures of disorganization and chaos, cultures with high frustration and turnover of people—all reflecting the values and leadership style of owners and managers.
I've also seen cultures characterized by enthusiasm and loyalty, stewardship and accountability, mutual respect and trust, systemized and professional operations, where people love coming to work—all reflecting the values and leadership style of owners and managers.
Culture Determines Success
Thomas Watson Jr., former CEO of IBM said, "The basic philosophy, spirit, and drive of an organization have far more to do with its relative achievements then do technological or economic resources, organizational structure, innovation or timing (Randy Pennington, Results Rule!, 8).
Surround yourself with "disciplined people who engage in disciplined thought and who take disciplined action" (Jim Collins). When your people are working individually and collectively at their highest potential—even when you are not around—you will have created a remarkable organization.
YOU are the leader and you set the pace. It is up to you break through to a high-performance culture, a culture of discipline, a culture of excellence—the natural consequence of creating effective business systems and processes.
So spend an hour in the Zone today, and begin reaping the benefits tomorrow. Every day you wait is costing you money, and much more!
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Yesterday I got a large mailer from a company called 3-Day Kitchen & Bath. The name of the company says it all. These folks promise—and deliver, I might add—a remarkable service in the eyes of their customers. As Seth Godin said, they "stand out like a purple cow in a field of brown cows."
From a System Thinker's point of view, all they did was change the ordinary kitchen remodeling process to an extraordinary new remodeling system—and then built an entire business around it. They achieved the kind of results we are all looking for.
- The offer is a powerful magnet to attract new customers.
- The service leaves customers delighted and amazed.
- Customers are eager to show their friends.
- The three-day job efficiency pushes costs down and profits up.
- The quick job cycle creates an abundant cash flow.
- The company owns its market niche.
3-Day Kitchen & Bath performs the same remodeling tasks as traditional construction companies. You may not be able to see a difference in the finished job; however, there is a huge difference in the way the work is accomplished!
The company pre-plans the job down to the last detail, and purchases all materials before construction begins. They have a specialized crew that can install cabinets, counter tops, flooring, appliances and so forth. They work extra hours on the three critical days. At the end of the third day, as the paint is drying, they pick up their check and say goodbye to their thrilled and grateful customers.
What Business System Can You Innovate?
3-Day Kitchen & Bath challenged the normal method of kitchen and bathroom remodeling. They asked, "How can we perform this service so fast that our customer's primary objections to remodeling—completion time, construction mess, and inconvenience—are totally eliminated. They figured out how to do the seemingly impossible, and turn it into a daily routine!
Increasing speed significantly beyond market norms is one secret to having a remarkable business system. One-Hour Photo did it. Federal Express did it. Twenty-five years ago, an enterprising group in our community decided to build a basic split-level home in twenty-four hours. I drove by and watched for a while. It was an incredible sight!
Years later, I suggested to one of my home-building customers that they should create a system for completing a standard home in thirty days from the time of customer purchase. They said it couldn't be done, and they continued to barely survive in a competitive market.
Ah, But It Could Be Done!
You have to think outside the box. You have to question norms. You sometimes have to do things that are hard to do. You have to change your core business system to something remarkable. You have to "dare to be great." When you do, you can gain the same benefits listed above. Review them again. Consider what system norm you could change to shake up your marketplace.
Remember: It's all in the SYSTEM!
Fast Business Processes Increase Profit—7 Strategies To Boost Speed!
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Recently, I watched a two-hour documentary on the rise of Walmart. A regional manager said, "We get up every morning running scared, trying to figure out ways we can improve." The narrator added, "Most of Walmart's improvements come by taking cost out of the business." Unrelenting focus on improvement has made Walmart one of the great international success stories.
YOUR primary improvement project is also to take waste out of your business processes, the defects and delay that increase cost and diminish customer loyalty.
You know what needs improvement; it comes from personal frustration, customer or employee feedback, and performance or financial data.
There is waste in all business processes—marketing, operations and administration—whether in the office or the factory. Your business is no exception!
Principles of Improvement
One day I began noting some principles that govern business and process improvement. I have compiled a list of twenty-three that can be found in my eCourse; I'm sure there are more. Twelve principles are listed below. Ponder each one carefully. Their application could profoundly affect your organization.
- Continuous and unrelenting effort to improve systems and processes is the only way to develop excellence in people and organizations.
- Improvement activities focus on providing the customer the best value by removing waste from the organization—defects, delay, and the resulting higher costs.
- All organizational improvement begins with personal improvement, a passionate desire to learn by personal study, formal education, experience and mentoring.
- Improvement follows the discovery and application of laws, principles, and best-known practices that govern the outcome of a specific endeavor.
- The universal Law of Cause and Effect determines all process improvement outcomes; only by improving the inputs to a process can you influence the output or results.
- Improvement is the result of painstaking preparation, documented goals and procedures, measured performance, and persistent learning.
- Standardized tasks are the foundation of improvement and empowerment of people.
- To improve the performance of any activity, increase the frequency of feedback to those engaged in the activity; the more frequent the feedback, the better the results.
- Innovation most often consists of incremental enhancements at the detail level of a system or process, often producing dramatic results.
- Improvement efforts ignore the "trivial many" variables, or systems, and focus on the "vital few" that have the most influence on business objectives (see 80-20 Rule).
- "When performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates" (Thomas Monson, business and religious leader).
- Improvement is most likely to happen in an environment that promotes customer focus, clear goals, accountability, scorekeeping, frequent feedback, recognition of personal achievements, and celebration of victories.
We don't live in a perfect world, but by pursuing it, we can achieve excellence. This unrelenting effort will catapult you far beyond your competition.
Find ways to improve each day. NEVER STOP IMPROVING!
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"Everyone makes mistakes." We've all heard that statement a thousand times, and it is true. We can never eliminate human error. However, this is more often just an excuse. With effective business systems and processes, you can reduce most of the daily human errors that are causing you to lose customers and profit.
10 Types of Human Error
Below are ten common mistakes that people make and some suggestions to minimize them in your organization.
- Misunderstanding (Teach your written policies and procedures repetitively)
- Forgetfulness (Create a checklist or a Poka Yoke)
- Wrong identification (Mark, label, color, etc., for easy recognition)
- Lack of experience/skill (Improve your hiring or training systems)
- Willful ignoring of rules or procedures (Hold people accountable)
- Slowness (Remove bottlenecks; create standards of performance; measure results)
- Inadvertent or sloppiness (Apply an improvement methodology; see eCourse)
- Lack of standardization (Reduce and simplify; create procedures, templates, jigs, etc.)
- Intentional/sabotage/not caring (Warn or terminate the person immediately)
- Surprise (Unexpected, infrequent and random causes are more difficult to eliminate)
Don't get frustrated with the mistakes people make. You know from Murphy's Law that if something can go wrong, it will. Instead, realize that frequent or repetitive mistakes are the symptoms of poor systems that you can control. You have the power to make the necessary improvements. If a person chooses not to follow your improved system, then find someone who will.
People are the most important component in most systems. Fit the right person to the job. Make sure they understand the system and are trained to do it properly. Set expectations and goals. Give people frequent feedback regarding their performance. Hold them accountable for results.
You Choose the Level of Human Errors
Remember: The more you strive to make a business system perfect--to eliminate errors and waste--the more difficult the task and the more money it costs. The good news is that you get to decide how many errors you can or will tolerate.
The airlines expect one bag in every 150 bags they handle to get lost. That's why they put a baggage claim office in each airport. Airline managers have calculated that the cost of a near-perfect baggage handling system is too expensive and the public will tolerate an "occasional" lost bag. They choose to accept this level of error in their process.
Your customers, your financial reports, or your gut will tell you when people are making too many mistakes and when it's time to pay the price of improvement.
Review the ten common mistakes again. Pick one that is currently frustrating you or your customers. Now, go change the system that is causing it.
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"My customers love me," declared one proud entrepreneur. Upon further investigation, we discovered that they really did like him personally--he was charming and knowledgeable--but they hated his company's slow response time, billing mistakes, and unfulfilled promises. This entrepreneur was living in a fantasy world that would eventually cost him his business!
Bad Business Systems Lose Customers
A year ago, I hired a company called Heritage Web Solutions to build and host my website. They got off to a good start; however, as time went on, I became increasingly frustrated. The people were very nice to work with but their internal systems for getting work done were dreadful. I tried to offer some constructive suggestions but only got token expressions of appreciation in return.
Eventually, I could not take it any more and asked to speak with a manager. She too was appreciative of my suggestions and said she would look into it. I had little confidence, and as expected, nothing changed.
Finally, I offered to make a personal visit to Heritage's place of business to discuss my experience and share some ideas that could really help the work-flow in their company. Through the grapevine, I knew other customers were having similar problems. However, no one at Heritage seemed to be interested. After six months of aggravation, I had no choice but to discontinue the service.
Soon after leaving, I got a phone call from a customer service representative asking why I discontinued the service, and if there was anything they could do to keep my business. Duh!
Good Business Systems Keep Customers
Compare the Heritage experience with this one.
My wife and I dropped into our local Costa Vida Mexican fast-casual restaurant. I requested a burrito from the hurried man behind the counter. I was only paying half attention when I noticed him begin to put cheese on top. I shrieked, "No cheese!" He immediately tossed the burrito into the garbage can and began making a new one. I tried to tell him it was not necessary to throw it away, but I was too late. To a Systems Thinker, waste is a terrible thing. I felt bad. He assured me that it was OK.
A few weeks later, we visited Costa Vida again. While talking with my wife, the food preparer began adding cheese to the burrito. Again, I blurted, "No cheese!" I startled him and several other patrons sitting nearby. However, before I knew it, he again threw the burrito into the garbage. I asked my wife, "Next time we come here, would you please help me pay attention so these folks won't have to waste another meal?"
Well, the time came. I was cocked and ready to say "No cheese" at the critical moment. There would be no burrito thrown away today! I leaned over the counter as Juan put the meat and beans in the flour tortilla. Just as I was about to say, "No cheese," Juan said, "Would you like everything on your burrito?" I quietly replied, "Everything but cheese, thank you."
Under the old food service system, Costa Vida threw away many meals a year (just with me). However, a little tweak to the system--"Would you like everything on your burrito?"--and the problem is solved. No more throwaways. This company learned and improved their system. Well done, don't you think?
The moral of these two stories: Listen to your customers and your employees. Then make the often small, instantaneous, no-cost changes to your business systems and processes. You too will have happier customers, more profit, and a better company!
The road to excellence comes by paying attention to the hum of systems and processes in your business and making small daily improvements. One improvement a day is over 250 improvements a year. You have many possibilities just waiting to be discovered. Go find one right now, and drop me a line to let me know what you did.
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There are a million business principles expounded upon in thousands of business books. However, there is only one way to put those principles into action, to turn principles into profit. Read on.
As an entrepreneur of forty years, I have owned several businesses including manufacturing, wholesale/retail distribution, technology, and financial services. I've managed business start-ups and helped failing companies become prosperous. Along the way, I became a Systems Thinker. It has vastly changed and improved everything I do--in business and in my personal life.
Early one morning, while pondering the vital role of systems, I was inspired with a concept now known as Box TheoryTM. It is a simple statement with profound implications; I explain it fully in the eCourse. For now, think of it as viewing your organization through a new lens, one that exposes operational details to close examination, making problems transparent and solutions obvious. The more I work with Box TheoryTM, the more elegant it becomes, as if God revealed one of his secrets for creating and managing the universe. I have not yet discovered its full potential!
Box TheoryTM Gold Software
The business purpose of Box TheoryTM is to help YOU dramatically increase customer loyalty, profitability, and growth by elevating the performance of your vital business systems and processes.
There is no doubt that the application of principles taught in the eCourse can put thousands of dollars in your pocket. Up until now, however, Box TheoryTM was just another book of principles--powerful, jaw-dropping, life-changing, money-making principles--but only principles.
I am excited to announce that the principles of Box TheoryTM are now incorporated into software program that will vastly accelerate your business and system development activities. Box TheoryTM Gold will change the way you view and run your business.
Five Reasons to Get Box TheoryTM Gold
Consider just five of the reasons for using this software to lift your business to a new level:
- Identify and define every major system and subsystem necessary to run your organization. Begin by developing or improving systems that provide the biggest financial payoff.
- Create, flowchart, organize, manage, record, store, and print everything pertaining to your systems and processes. This library of "the way we do things here" will be one of your most valuable assets, allowing you to replicate your business in new markets, sell it for top dollar, or let others run it for you.
- Maintain an Organization Blueprint--mission, values, strategy, goals, and structure--that serves as a foundation for building all of your systems and processes. Align your system goals with the larger company goals; get people and systems pushing together to accomplish the vision of the organization.
- Track seven attributes of high-performance for each of your business systems. Apply improvement strategies used by Fortune 500 companies to reduce waste, increase speed, efficiency and quality, and properly measure system performance.
- Easily create powerful systems that will turn customers into raving fans, increase sales, improve profit and cash flow, and give you more control over business operations while freeing up personal time.
Box TheoryTM Gold is a complete and indispensable tool; you will wonder how you ever got along without it! It is as important to system development as QuickBooks is to accounting. What could be better than a powerful software system for developing and maintaining your business systems!
Don't just work in your business; work on your business (Michael Gerber, E-Myth Revisited). Get in the Zone today and use the only product on the market designed for this unique job--Box TheoryTM Gold.
I know that systems provide the solutions you have been looking for. They are your building blocks for creating a remarkable organization. It's time to get going--to turn principles into profit with highly effective systems and processes. There is no other way, and there is no better tool for small business owners than Box TheoryTM Gold.
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