Truly Understanding Customer Value
S A Partners, LLP
Many organizations assume that customer surveys tell them what their customers truly value. This approach has its limitations. There is a difference between customer satisfaction and customer value. These must link to strategy and deploy throughout the organization.
A deep understanding of customer value is critical to drive business excellence and innovation. Traditional survey approaches fail to identify customer value so an alternative methodology must be used.
What is Customer Value?
According to Womack and Jones (Lean Thinking, 1996) the first lean principle is to understand what customers value. At first this may seem a very obvious starting point for any organization wishing success in whatever products or services they seek to supply. However, in reality it is often overlooked with organizations assuming they know what customers value.
Customer value is constantly changing and one of the models that helps describe this is from Professor Noriaki Kano who divided value into three categories. These are illustrated in Diagram 1:
Diagram 1 Customer Value Kano
Kano’s model illustrates that customers only articulate basic value criteria when the criteria are absent, and that most often it is performance criteria that are expressed. Delighters that can help to inform future value are not readily articulated and need a structured process to help bring them to light.
The Kano model helps to illustrate that what customers value changes over time and that expectations are constantly increasing. Today’s delighter quickly becomes tomorrow’s performance expectation, and the day after that, a basic requirement. This is easily illustrated in an everyday example, such as computer technology, where today’s delighter quickly becomes a performance factor, then a basic, and then falls even further to have little or no value.
“Medical Taylorism:” An Article that Does a Huge Disservice to Needed Healthcare Transformation
By Dr. Patricia Gabow and Ken Snyder
The article, “Medical Taylorism,” by Pamela Hartzband, M.D. and Jerome Groopman, M.D., in the New England Journal of Medicine, reflects a major misunderstanding of the principles and practice of the Toyota Production System, or Lean as it is often called. Specifically, the article appears to conflate poor implementation with the underlying principles. Several commentators, including many from the Lean community, have weighed in on this debate, but more needs to be said given healthcare’s need for transformation and the powerful solution that Lean offers in this transformation.
Doctors Hartzband and Groopman are feeling pain due to their experiences. We sympathize with their pain. Too often, whether in healthcare or other settings, we see poor implementations of Lean. These poor implementations are almost always due to failure to follow the principles of operational excellence.
In this discussion about Lean in healthcare, there are some specific principles that deserve emphasis. In citing these principles, we will adopt the terminology used in the Shingo Model.™
- Seek Perfection
- Respect Every Individual
- Control Quality at the Source
- Embrace Scientific Thinking
- Create Constancy of Purpose
It is unfortunate that many who implement Lean seem to forget these core principles. It is hard to imagine any set of principles which would more closely align with the needs of healthcare and commitment to the population’s well-being than these principles.
KPIs are Dead, Long Live the KBIs!
About a year ago, the head of logistics and purchasing asked me to carry out some observations on the floor. Their new ERP system had been implemented about two years ago, and he wanted to know where knowledge was still lacking so he could use the information as input for a training plan. So off I went to talk to some of the employees. I asked an employee to tell me exactly what she did while she was working on something, a bit like TV-chef Jeroen Meus. "And now I change this printer to the correct printer ... This has been wrong in the system for a long time." She felt no regrets to report the issue and get it solved once and for all, instead she solved the problem herself on a daily basis. And she was certainly not the only one I noticed doing this during my observations. The employees certainly knew what the final output should be, but they were less concerned about how it should be achieved, or even how efficiently it should be achieved. Is this the behavior and the consequent results you want to achieve as an organization?
Hoshin Kanri: Translating “Big Vision” from Strategy to Execution
Rick Edgeman, Research Director
Shingo Institute, Jon M. Huntsman School of Business, Utah State University
Part 1: Hoshin Kanri - Concept Origins
Published March 1, 2016
Prior to World War II, the U.S. share of the world export market was approximately 30%. In the aftermath of World War II that share grew to more than 70% - a result of a generally healthy and educated workforce, as well as a U.S. infrastructure that remained largely untouched by the war. In contrast, many European and Asian nations were left to deal with infrastructure devastation and human tragedy alike, often with less educated workforces using antiquated equipment.
Create Constancy of Purpose
by Mark Baker
Mark Baker will be teaching the Discover Shingo Model™ Workshop at the 28th International Conference this April
Published February 3, 2016
When I was a young mechanical engineer at Honda Motor Company, Mr. Honda was still alive and he used to always say, “Unless we have 100% of the people in the organization engaged in making the company better, we will never be able to realize our true potential.” I remember hearing this for the first time, and over the years I have found it to be a great insight, but the real question now is how is this achieved? Mr. Honda’s statement hits on two key points of building a successful organization, namely engagement and alignment. Without both of these aspects, success will be hit or miss.
Written by Bruce Hamilton, President, GBMP
Published January 21, 2016
There is a popular lore provided by Shigeo Shingo that the original name for mistake-proofing (poka-yoke) was “fool-proofing” (baka-yoke). Shingo chided managers at Panasonic for using the latter term, as it was disrespectful to workers, essentially calling them fools. Shingo substituted the word “fool” for “mistake,” because, as he aptly noted, making mistakes is part of humanity. “Mistakes are inevitable,” he said, “but the defects that arise from them are not.”
Notwithstanding Mr. Shingo’s admonitions, however, I still hear the term “fool-proofing” used regularly, and occasionally with a little more venom, “idiot-proofing.” No doubt, these derogatory terms, along with others like “screw-up” and its less gentile derivatives, have given a bad name to one of the most energizing, empowering and creative tools from the TPS toolbox.
Continuous Improvement from Where It Counts
Written by the Shingo Institute Staff
Published December 21, 2015
“What’s the difference between the Shingo Prize® and other similar awards?” It’s one of the questions most frequently asked of the Shingo Institute. The short answer is that it isn’t just a framework for management. The Shingo focus is on organizational culture conducive to having improvements come directly from the mind of every associate at the organization to get measurable, world-class results.