In my previous blog in January (I’ll explain the interruption to my blogging later) I explored the problem of understanding where your customer experience isn’t measuring up when most customer are silently dissatisfied (1 in 25 speaks up.) I left off with the question of how to more proactively identifying and addressing customer dissatisfaction by focusing on continuous customer experience improvement.
In my experience and study (hard knocks and hard data) I believe there are three key areas to focus on:
- Customer engagement monitoring
- Customer interaction improvement
- Customer feedback on ramps
I’ll start first with customer engagement monitoring.
Most software execs know that customers engage at differently levels. The most common model is to view engagement as series of concentric circles (the onion model) where customers in the inner core are the most engaged and the customers at the outer layers are the least engaged.
The inner core represents your “raving fans”. Your zealots. Where you go for case histories and testimonials. The source of most of your positive word of mouth advertising. They buy and use everything you have to offer. They’re on the highest levels of your service plans, use most or all of your products, faithfully are on the latest updates, buy your latest add-ons and upgrades and probably are the customers you use to help design new and improved offerings. Oh, to have more of these!
As we move out from this golden group, we begin moving away from lesser levels of engagement. Support, maintenance, upgrades, new products all are “markers” of engagement. A simple and elegant way to measure engagement, in addition to these, is the old RFM analysis: Recency of purchases, frequency of purchases and amount purchased are great “markers” as well. I also use RFM to evaluate a customer base to find those high value segments worth greater focus and attention as well, but that’s for another blog.
So, how do you turn this all into customer experience monitoring system? By identifying the key markers or boundaries of these various engagement groups you can then define the key metrics that you will use to segment and monitor your customers. You can then, and this is very important, score each customer based upon their engagement level. You are now set up (with a bit of help from an analytics tool) to monitor movement of your customers among this group. Migration towards the golden center indicates increased customer engagement and, of course, the opposite direction indicates less.
Over time you’ll be able to know the quantity, direction and velocity of customer movement. But this only answers the “what” it doesn’t tell you the “why”, for these you need to move to the next area that I call Customer Interaction Improvement. In Part 3 of this series, I’ll explore how we can dramatically improve customer experience proactively by focusing on the human factor of product and service experience delivery. This can yield a 10% decrease while improving customer satisfaction scores by up to 30%! Postscript: Why the Gap in my Blogging
So it’s been nearly 2 months since my last blog and some of you may have noticed this. For those of you who have (and care to know) I’ve begun a new part of my journey which is quite exciting and fulfilling for me. For over 20 years I’ve been an active member of Rolling Hills Community Church in Tualatin, Oregon and care deeply for the mission and purpose of this ministry. Over the last few months I’ve been in active discussions with the leadership there about joining the staff as the business manager, replacing the previous individual who retired over two years ago. Long story short, I was offered the position after board approval, gladly accepted and joined the staff February 1st.
What does this mean for VALUE:driven Group? I will continue to lead VDG and actively communicate through this blog and participate, as time allows, in other organizations and events, most notably the Oregon Entrepreneurs Network. I will just need to be a bit more selective (and disciplined) in how I spend my time! For purposes of this blog, I plan to move back to a two week (or so) frequency as I am committed to serving an industry that I care deeply for, that has provided me such a great career and allowed me to get to know so many wonderful people over the years.
As always, I love hearing from you; dialogs are so much richer than monologues!
Are your customers satisfied with your product and company experience? How would you answer this question? Would you point to how effectively you handling complaints? Would you highlight anecdotal evidence of customer compliments? Would you refer to your customer support transaction satisfaction metrics? Would you refer to your recent NetPromoter scores?
Some may be better indicators than others of customer satisfaction, but there’s a big problem with all of them: they don’t provide any indication of the largest group of dissatisfied customers.
The Silent Majority
No, not the same group that Nixon was referring to when he coined this phrase in his speech in 1969 (I know my age is very evident here). Here I’m referring to your largest group of dissatisfied customers! According to research, only 1 out of 25 customers that are dissatisfied ever tell the company. The rest? Well, unfortunately, they are only silent with you because they do, in fact, talk and it’s to a few others (10) who talk to a few others (10 again) who talk to a few others (5). By the time everyone’s done talking about your company and products in a not-so-positive way, that 25 turns into 1300 people who are now in the conversation! And, the company who is the source of this discontent hasn’t heard a word from any of them!
So, why do customers stay silent? There are several key reasons that have been sighted by research and experience:
This isn’t a complete list, but it doesn’t really need to be. The primary point is: the vast majority of dissatisfied customers will never directly tell you. Big problem, but there is something you can do about it.
- Non confrontational personality
- Doesn’t care enough to make the effort
- Concerns about retribution
- Bad experiences with previous complaints
- Feelings that they’re the only ones with the problem
- Concerns about wasting their time and money
- Don’t want to jeopardize their social or professional position
- Don’t know how/where to voice their complaint
Handle the complaints well that you do know about.
Realizing that for every complaint, there are 25 others that haven’t said anything directly to you, treat each complaint very seriously and professionally. Once again, research shows that there are some clearly established ways to effectively resolve complaints that will potentially help you indirectly address over half the silently dissatisfied customers issues. They include:
Satisfied Employees = Satisfied Customers
- Timeliness - prompt response to a complaint is key to getting back on the right track with a customer
- Facilitation - provide easy and well communicated methods for customers to express complaints. Remember, the easier you make it, the less will remain silent at least because they didn’t know how to voice their complaint to you.
- Redress - try to make it right. Once again, the customer has suffered a setback (real or perceived) due to your (real or perceived) shortcoming. You may not be able to make it completely right with them, but providing some redress goes a long way to restoring the relationship.
- Apology - don’t forget to apologize. Sincerely expressed apologies are very effective in healing any psychological damage that may have been incurred.
- Credibility - rather than providing excuses or self-justifications be clear and transparent with the customer about the reasons for the failure and what you’re doing (or will do) to prevent the problem from recurring.
- Attentiveness - this is represented by respect, empathy, effort and willingness to listen. Research indicates that this is the single most effective way to overcome dissatisfaction. Attitudes and behaviors that express attentiveness (or not) will make or break the relationship.
The most important factors leading to customer dissatisfaction are:
Just as employees are the primary cause of dissatisfaction, they are the primary means of overcoming dissatisfaction and creating a positive experience for the customer. As one person put it: “You can’t expect your employee to delight the customer unless you as an employer delight your employees.” This is especially true for your front-line, customer-facing employees who typically are in support and sales.
- Unsuitable employee behavior - research indicates almost 3/4 of customers are attracted to a competitor due to indifference, aggression or poor attitudes expressed to customers by employees
- Lack of high quality products or services
- Price that doesn’t reflect value received
As more and more software moves to the web and mobile devices, we have the opportunity for better customer interaction because we have the potential for a deeper engagement and more responsive environment. How many of you have looked for an app for your smartphone and read the reviews by customers who have already purchased the product? Talk about facilitation - customer response is nearly realtime! At the same time I'm sure you've also experienced the frustration of using a web service where the company provides no means of customer feedback or problem resolution, or makes it very difficult to find and access? And how about that wonderful approach of showing you the door (figuratively) to the online customer forum! All these can become part of the solution, if they are used to systematically find out what is causing dissatisfaction and then effectively addressing it.
Now, back to that silent majority. Handling complaints isn’t going to be enough, we need to be able to proactively identify those silently dissatisfied customers and, more importantly, work at preventing customer dissatisfaction in the first place by focusing on continuous customer experience improvement. Stay tuned for my next blog(s) where I’ll provide some insight into these critical areas. Until then, let me know what you’ve done to turn those dissatisfied customers around and better yet, how you prevented them from being dissatisfied in the first place.
If you’re like many software companies you have a number of critical touch points with your customer that shape and define the overall experience your customer has in doing business with you. I’ve mentioned this before, but it’s so easy to narrow our focus to just the software application when we focus on improvement efforts. Often we overlook two critical areas that our customers utilize (or not if we don’t even offer them) on a regular basis - they both relate to how our customers obtain support for the products that they are using from us.
As part of a new report, customer experience gurus, Temkin Group, is examining channel preferences for consumers across many different industries. After surveying 5,000 US consumers on their preferences for completing a wide variety of activities the two top channels that were preferred were:
And by a wide margin I might add for most activities. Only activities that involved complex interactions such as opening a new investment account or purchasing a new insurance policy was good, old face-to-face a preference. And even with those phone and web were still not far behind.
- Talking on the phone
- Self-service on the web
So, if you’re currently not offering these channels, you might be missing a significant opportunity to improve your customer experience that your customers prefer to use when dealing with you. And, if you haven’t paid much attention to the customer experience you’re delivering in these area, you might want to take a serious look at how they can be improved.
But, you say, “that’s a consumer study, I sell to businesses”. I wouldn’t be too quick to dismiss this information. The people who work at your customers’ businesses are also consumers and, as such, will expect you to provide the same high quality customer experiences in these areas as they’ve had with the best consumer products companies they personally do business with. You’ve being measured, not just by your direct B2B competitors but by the best-in-class consumer companies as well!
In my previous company, phone support and web self-service was, and still is, a very important area to shape a superior customer experience. The support organization was (and probably still is) one of the best of the best in phone-based support. One of the areas that we invested in quite heavily several years ago was a self-service, web-based knowledge-base. As we answered customers questions on the phone, we had a group of individuals who’s job it was to take the raw call notes and turn this into fresh content for the knowledge-base.
This work doesn’t come cheap, but how it paid off in helping to deliver a truly superior experience. It provided a powerful combination for the customer to quick resolve their questions on a self-serve basis, while also providing them the option to talk to an expert on the phone. It also provided us with valuable information on what articles were being searched and what areas needed additional content emphasis.
Skill-based routing is another powerful way to deliver a superior phone experience utilizing a complex combination of personnel training, performance management and phone technology. In many of these areas, you can not only find ways to improve the customer experience, but also ways to improve your internal productivity and efficiency - a real win-win. There are many ways to provide innovative and powerful customer experiences in these areas.
On the darker side, we also experienced the power of these channels to severely damage the customer experience when things don’t go well. We were the first to implement a new CRM for entire business unit including the support department. This was part of a company-wide effort to upgrade all the North American businesses over time. Because we were first, we experience many issues during the initial implementation that hadn’t been discovered in the pre-release testing.
One of the areas that significantly failed to work as well as the previous technology we were using was in our business partner (VAR) portal. We quickly realized just how much our business partners depended on this crucial (but somewhat neglected) self-service area! They weren’t happy campers until we got these issues worked out, to put it mildly. Which also brings up another key point - remember your secondary customers - they often depend on phone and self-service web channels as well. And their experiences are just as important as your primary customers.
So, as you look forward to customer experience improvement initiatives for the next year, take a close look at your phone and web self-service areas. You may just find some “low-hanging fruit” that will dramatically improve your customers’ lives as they work with you and significantly move your closer to deliver a truly superior customer experience. After all, that’s what’s it’s all about, right?
Finally, on behalf of all of us at VALUE:driven Group, I’d like to wish you and yours a very joyous Christmas season and happy and rewarding New Year!
It’s hard to deny the incredible success of Apple Stores. In just a over a decade since the first store was launched in May at Tyson’s Corner, VA they’ve grown to 245 locations in the US and 358 across the globe. Fortune magazine in 2007 named Apple “America’s best retailer” and rightfully so. According to RetailSails’ research this year, Apple Stores generated over $14 billion in sales for the trailing four quarters. That means that for the 327 stores at the time of this study generated $5,626 per sq ft of floor space, beating out the second highest Tiffany & Co. with $2,974 per sq ft!
So, you're thinking the equation is: Apple Products + Fanatical Customers = Success. Not so fast, let's take a closer look...
Apple wasn’t doing well in the traditional big box electronics stores in the late 90‘s. And so, in 1999 Apple hired Allen Moyer, a former Sony exec who had worked on the company’s retail development projects. One such project he worked on was the Metreon complex in downtown San Francisco. There Sony had opened its own Sony Style store where consumers could try out the latest Sony products. It was in the middle of a densely populated, destination city by design - for upscale traffic, lots of it.
This was the genesis of the big idea. Then along came Ron Johnson, who left Target for Apple in 2000, reporting directly to Steve Jobs. Johnson is credited with most of the strategy and the brilliant execution from there on out. In fact, the first store was designed in a rented warehouse as a prototype - Apple Store version 0.1 if you will.
According to the 2007 Fortune magazine article accompanying the ‘best retailer’ listing, Jobs discovered, during this process, that the layout of the store was by their traditional product categories instead of how the customer might actually want to buy things to accomplish specific tasks like photography, video, music, information, etc. And since this was just a mock up they were able to redesign the store layout and get the layout right when they went “live”.
Another very key element of the Apple Store strategy was the Genius Bar, which for the first few years wasn’t all that used by the customer. But, this innovation which is in great demand today, came out of a focus group panel that brought a variety of people together from all walks of life where they were asked what their best service experience was. 16 of the 18 focus group panelists mentioned a hotel example. So they asked the question “Well, how do we created a store that has the friendliness of a Four Season Hotel?” Their answer was: “Let’s put a bar in our stores. But instead of dispensing alcohol, we dispense advice.”
In Ron Johnson’s (he’s announced that he will be joining J.C. Penny as CEO) blog on the HBR Blog network he states clearly why all this effort paid off so richly for Apple, saying:
“Any store has to provide products people want to buy. That’s a given. But if Apple products were the key to the Stores’ success, how do you explain the fact that people flock to the stores to buy Apple products when Wal-Mart, Best-Buy and Target carry most of them, often discounted in various ways, and Amazon carries them all - and doesn’t charge sales tax! People come to the Apple Store for the experience - and they’re will to pay a premium for that.”
There it is - The Experience
Johnson goes on to pose a quite profound, obvious yet often missed question, “How do we reinvent the store to enrich our customers’ lives?”
What would your company do if you really started asking this question for your customers? Apple took an old bricks and mortar vehicle and reinvented it by asking and and answering this question. They weren’t focused on the revenue and profits, they were focused on creating a superior customer experience. The revenue and profits will follow. It doesn’t take a genius to figure this out - but it just may take a Genius Bar! So what’s your “genius bar” experience that you need to deliver for a superior experience?
Oh, by the way, often when you’re pursuing your own “genius bar” experience you’ll run into the “experts” who will predict your sure failure. Retail consultant David Goldstein did just this when he confidently stated in 2001:
"I give [Apple] two years before they're turning out the lights on a very painful and expensive mistake."
Keep your eyes on the customer they’re the experts you want to listen to!
We’ve seen some pretty interesting decisions from three very large and respected companies these past several weeks that have had a significant impact on literally millions of customers.
First there’s Quantas where CEO Alan Joyce decided to ground all his airplanes betting that a temporary shut down would force the government to send their labor dispute to the FWA who would, in turn, impose a binding arbitration (in their favor) on both sides. According to the Economist the move “delighted rival airlines” who “welcomed their defecting customers with open arms.” The longer strategy apparently is a major restructuring (layoff, route reductions) so that they can set up a a new premium airline based somewhere in Asia along with a joint venture to operate a low-cost carrier in Japan.
Then we have the Bank of America (they weren’t the only bank just the poster child) who after implementing a small monthly fee for debit card use decided it wasn’t such a good idea after all as customers expressed their anger and frustration in a variety of public ways, the most notable being with their feet. Apparently credit unions and smaller, local banks gained a fair amount of new customers this past few weeks. David Darnell, co-chief operating officer said, “Our customers’ voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so”, according to a recent USA Today article on the subject.
And then, the “old news” of Netflix’ subscriber loss from one-two punch of increased prices (I wrote about this in a previous blog)and aborted plans to split off the DVD rental service into a separate company called Quickster. In a rather terse email from the “Netflix Team” customers were told “It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.” Netflix has thus far lost 800,000 customers from these moves, (200,000 more than they estimated), and it’s share price has been hammered falling from a high of $298.73 to $75.28, a plunge of 37% according to Bloomberg.
Desperate times require desperate measures? Calculated risks? What were they thinking?
All these questions come to mind when considering these three separate, but in my mind, related, situations by companies each in very different industries. In all three cases the companies have made significant changes to their respective customer experiences. One by leaving customers stranded in airports, another by charging an additional $5 monthly fee and yet another by changing their service offering’s packaging and pricing. All experience significant customer backlash, trashing hard won loyalty and, in two cases publicly backtracking on their decision in whole or in part.
These are not small, insignificant decisions, so what’s going on here? Sure, no one is perfect and not every decision works out 100%. But this seems, to me, like a gross lack of understanding of their customers, even contempt for them. I have no idea what internal studies, research, focus-groups, consultants, etc. were brought in to justify such moves. But, it wouldn’t surprise me to hear that they spent hundreds of thousands of dollars on the research that led to these decisions. And still they each got it wrong, terribly wrong.
When B of A’s Darnell said that their customers voices are “most important” to them, I wonder. What voices were they listening to before they made the decision? Clearly it wasn’t the customers that caused them to backtrack.
These are all good companies, providing valuable services to millions of customers. I choose not to believe the are the “dark side” as represented in the “occupied” streets and parks in cities across our nation. But they clearly are not making decisions that are leading to anything close to a superior customer experience. And, increasingly customers are becoming "mad as hell and not going to take it anymore."
How do companies lose touch with their customers so badly as to make these kind of decisions? I don’t pretend to have inside information on these decisions and companies but this all looks to me like customer experience is taking a backseat to the shorter term economic interests of the company. The paradox is that in making these decisions, without a true understanding of their customer experience, they are shooting their own economic interests in the foot. I believe that the primary job of every company that cares to provide differentiated value and reap the rewards of growth in brand preference, revenue and profitability is providing a consistently superior customer experience. The alternative just isn't very appealing.
At the same time, there is a dramatic shift in power taking place. Many have indicated that this is going on, one being Glen Urban in his book first published in 2007 called Don’t Just Relate - Advocate. In his book Urban describes five sources of increased customer power:
The following year Li and Bernoff’s book Groundswell, laid out a strategy for addressing the growth in customer power through the effective use of social media for both listening and responding to customers. This shift in power is not new news.
- Increased access to information
- Access to more alternatives
- More simplified direct transactions
- Increased communication between customers
- Increasing control over contacts
The plain fact of the matter is companies, now more than ever, can’t afford to be ignorant or indifferent to their customers’ experience. If they don’t continually improve it they will quickly and, sometimes, dramatically hear about it - only it will be too late.
Customers (B2B & B2C) are more attuned to value as never before and they won’t settle for less than the best their money can buy. The question is are you listening, learning and responding now more than ever?
“The Google+ platform is a pathetic afterthought.” So says Google engineer Steve Yegge in a recently leaked 4,578 word, internal post and critique of Google's recently introduced social site. Now, I have to admit, I thought Yegge was going to expound on the value of Google+ in light of the alternatives or how Google+ missed the mark in understanding the social customer experience of it’s target customers. Or even, how Google+ wasn’t delivering on the original vision.
Instead, it was a well-written and, at times, entertaining perspective that revolved around three main points:
- You can’t build one product and have it be right for everyone - accessibility is the Most Important Thing.
- A platform-less product will always be replaced by an equivalent platform-ized product.
- Platforms solve accessibility - a platform is accessibility.
To boil it down, Yegge seemed to be saying with a fair amount of passion and angst that the failure of Google+ was that it continued Google’s emphasis on building products that weren’t service-oriented architectures (SOA). His premise is you can’t be all things to all people so you need to build a platform so that other people can make you all things to all people.
Where was the customer in all of this? I’m sorry, maybe I missed it but it didn’t seem focused on the customer at all. After all, who IS the customer for Google+?
Now, I have nothing against SOA and I think his points about Accessibility are quite valid as he states “When software — or idea-ware for that matter — fails to be accessible to anyone for any reason, it is the fault of the software or of the messaging of the idea. It is an Accessibility failure.” I agree with this point - after all if a customer can’t figure out how to use your software to accomplish a given task, then I’m sorry, the capability in that area doesn’t exist for them.
Where I disagree with him is his premise that we solve for the customer (accessibility) by building a Platform.
Yegge worked at Amazon before Google and drew heavily in his post from this experience. Amazon made a huge push (thanks to Jeff Bezo’s “cultural imperative” to move all development to SOA. And yet, he also jabs at Jeff’s love of his “millions of semantics-packed pixels on the landing page”, emphasizing just how difficult it is to navigate Amazon’s crowded and often confusing site. So where’s the connection between Accessibility and Platform?
I would restate Yegge’s points this way:
This to me is just another way to avoid defining your intended customer (i.e. target market customer). It’s another great example of building a solution first and then try to find the customer for it second.
- We want to sell to Everyone
- We can’t address Everyone by ourselves
- We need to build a platform that can be extended by 3rd parties to appeal to Everyone
- SOA is the best technical way to do this
And Google+’s problem, in my view is just that. After all, who is the intended customer for Google+? It appears they built it in response to the competitive threat by Facebook, or LinkedIn, or both. And while imitation is the highest form of flattery, it isn’t a path to a clear target market definition. In fact, it’s a clear path to nowhere, for by definition the target audience that you’re building for is already taken!
I’m sure many of you have received an invitation to join Google+. And like myself, you’ve accepted it and done some minimal set up and snooping around. And there certainly are some interesting twists to it, but really, are you going to move from LinkedIn, Facebook or both to Google+? Do you really need another social network?
First of all that’s a pretty rough move, akin to selling your house and moving to a foreign country in the real world. Which a few people do from time to time, but only because there’s clear value in uprooting yourself and family and making such a bold and difficult transition. I don’t personally see any compelling advantage to moving to Google+. Do you? But am I the intended customer? Are you?
Maybe it’s intended for people who haven’t joined the other social networks. Well, what is this group looking for in a social networking site? And what makes Google+ uniquely suited to this group? I currently have two myself - LinkedIn for my “professional” life and Facebook for my personal life. I’m not sure I have time, quite candidly for another virtual “life”.
According to Yegge’s post, there doesn’t seem to be any concern about any of this. Yegge is passionately advocating an internal, SOA revolution within Google. That is classic inside-out thinking that I’ve written about in this blog before.
And that is the message that I think is so important in all of this. Everything we do must be driven by a deep understanding and commitment to delivering a superior experience to our intended customer. And, if SOA does this, then great implement SOA (as painful as that may be).
Are you in the middle of a significant and costly internal improvement initiative? Is it being driven by a clear and uncompromising focus on your intended customer, or is it being driven by internal forces (e.g. cost-reduction, corporate mandates, politics, egos, etc.?)
If it’s the latter, you may want to take a step back and question whether or not it’s worth doing in the first place.
So, just to get these ambiguous acronyms straight: MFP is Maximum Flexible Product (my own invention) and the MVP is Minimum Viable Product (Eric Ries.) The two of these, in my experience, are light years apart and reflective of two different approaches to creating customer value.
First, the MFP...
Early in my software career I was introduced to the concept of “maximum flexible product.” The concept was relatively simple and straightforward - value is greatest when you give the customer as many options as possible for accomplishing any specific task.
After all, we don’t want to put the customer into a “straight jacket” where they can only do things one way. And, we also knew that every customer does things a bit differently, so in order to sell to the majority of them, we’d need to accommodate their many differences. We also aren’t completely sure which single approach will be the most common, so to hedge our bets, we need to include as many different variations as possible. Finally, and this tends to be an architectural, platform issue - it can be notoriously difficult to go back and make changes, so better to get it all in up front.
I believe this orientation comes from several customer value deficiencies. First, it comes from a lack of focus on a specific intended customer. The fuzzy focus we have on our target customer profile leads us to trying to “please all the people all the time”. Out of this uncertainty, to minimize perceived risk we emphasize product features, functionality and flexibility. Unfortunately with all this comes the unintended consequences of cost, complexity and confusion for both us and the customer. Instead of offering higher value to specific customers, we end up offer lower value to all customers. And it’s a slippery slope, because as we pursue this approach we, by necessity, have to continually add more and more flexibility, which creates more barriers to value.
There are certainly times when flexibility is required to address the customer’s needs, but it needs to be used carefully and only where it is absolutely necessary and when clearly justified by the customer’s requirements.
The MVP, by contrast seeks to build value by only adding the the minimum amount of functionality and flexibility to address the highest priority needs of a well defined customer profile. To execute an MVP well also requires an intense amount of customer understanding. Out of this customer focus and deep understanding comes an ability to hone in on the minimum but highest value needs to address, along with an appreciation of how best to address them simply and cleanly. There isn’t a need to “throw in the kitchen sink” because we know when the customer isn’t looking for a kitchen!
This approach takes an incredible amount of courage and discipline. It takes discipline to avoid drifting from our original intended customer focus. And it takes courage to say “no” to the inevitable requests for “one last” capability feature.
I mentioned that early in my software career I ran into the MFP. Well, I also ran into a great MVP as well. One of our senior product architects, in developing a new, PC-based estimating program, could have easily taken the approach of re-creating our very complex (and flexible) mini-computer estimating software. Instead, he chose to build an MVP although we didn’t call it that in those days. He took his incredible body of customer knowledge gained from developing the previous software and used it to hone the initial offering to what appeared to many of us as an overly simplistic solution.
It clearly wasn’t because he spent more time figuring out what to leave out than what to include in the initial product. Precision Estimating went on to become the industry leading construction estimating software used by thousands of contractors to this day.
I’ll leave you with this great quote from Antoine Saint-Exupery I ran across the other day that I think speaks so eloquently to the MVP approach: “Perfection is achieved, not when there is nothing more to add, but when there is nothing less to take away.”
I was just reading a recent ExecutiveBrief article on the role of the business analyst in Agile SCRUM development in preparation for a local PDMA chapter panel discussion that I’ll be on next week. It brought to mind some thoughts and observations from my relatively recent work at Sage where we implemented this methodology in a fairly large ERP project.
Agile SCRUM, like any methodology is no assurance, that high value features will be produced for the intended customer. The fast-paced SCRUM iterations can just as easily produce large volumes of great code that adds little to customer value. So as I think back on this project where we had eight teams, (if my memory is correct), I distinctly remember there were some pretty significant variations between the teams’ ability to capture high customer value.
In our case, we did use business analysts with one or several teams, who worked closely with the product owner (a senior product manager) to manage the myriad of details within this large project. The business analysts, who were also part of the product management organization, were responsible for managing their specific backlog lists to ensure that their teams were focused on the high value feature priorities. They were constantly in contact with intended customers to define and validate the teams backlog.
A fundamental characteristic of all Agile methodologies is that they are shorter on documentation and longer on face-to-face, real time interactions. And as a result, team dynamics play and incredibly important role in the overall success of this approach. Strong interpersonal skills and abilities are essential ingredients therefore, especially for the business analyst since they need to be the critical link with the customer to ensure that the customer’s value priorities are heard and met.
Teams also need to walk a careful line of applying the correct amount of technical innovation that yields the optimal value for the customer. It’s so easy for a team to over engineer features or create new feature sets that, while making for “elegant software” don’t really serve the needs to the customer. Given the relative autonomy of SCRUM teams, if the business analyst gets caught up in this gestalt, a team can quickly lose it’s way. Sometimes, as in one case that I recall, it can take some "tough love" to deal with and end up requiring some pretty significant team restructuring with the corresponding loss in time, effort and forward momentum.
My personal belief is that it’s not enough to have the business analysts and product owners to be the only links to the intended customers. All members of the team should have direct customer interaction over the course of the project. There’s just no substitute for the rich “customer value context” that the team gains as a result. It’s another way to, in VALUE:driven’s terminology, “become the customer”. As the many decisions are made by the team to determine the scope and design of the product, they are guided by a deepening sense of the customer’s needs, environment and perspective.
And, of course the product owner and business analysts must lead this charge for the team. However, senior management must reinforce and support this by creating a supporting culture - where creating and delivering superior customer value is always Job #1.
As always I invite your input and comments on this an any of my blogs. And, if you happen to be in Portland next week, I invite you to register and come to the PDMA chapter meeting I mentioned at the beginning of this blog, where we’ll be discussing the role of engineering and marketing in a lean environment. I’m sure it will be a very interactive and informative event!
We've all heard the incredibly funny baseball routine performed by Abbott and Costello in their 1945 film "The Naughty Nineties". And while miscommunication makes for great comedy, it isn't nearly as funny when it shows up in your organization. Of course there are many reasons why communication can be challenging in organizations today, one that I've seen often over the years stems from a lack of alignment about customer value.
All too often the context for understanding customer value is within each manager's respective functional area. Each area has a different role with the customer, and without an organization-wide customer value definition, each area will tend to establish what it thinks is the most relevant definition based upon their viewpoint or experience with the customer.
To product development it may be all about the number of open, P1 defects; while customer service believes it's all about first call resolution; while product management focuses on product utilization and sales believes it's about "time to close". It could be any of a million different things. And that's the point, without a clearly articulated and commonly understood statement of customer value that is based upon the customer's needs and objectives, it will be all over the board. And most likely, not at all what they customer values the most.
While we are debating among ourselves what the customer really wants from us, the customer's voice get's lost and we continue in our fragmented and disjointed delivery of our perceptions of value. One of the primary reasons for this is the simple fact that we don't really know what the customer values most from us and so, we start making things up and confusing what is valuable to us with what is valuable to them. What makes our lives easier or better vs what makes their life easier or better.
This is not to say that each functional area is wrong to have their own metrics, but it does mean that each area's metrics should be tied in some clear way to the customer value statement.
A common understanding of customer value also helps break down functional silos in the organization. It acts as a unifying principle that brings all parts of the organization, regardless of their specialized focus, together. It helps the organization work together to deliver, in a consistent and compatible way, what is of most importance to the customer. And it helps the organization shed internal barriers that limit our efficiency and effectiveness and tends to open new avenues for improved customer value delivery.
A simple test of how well you're doing in this area is to ask members of your staff what they think is of greatest value to the customer. The answers you receive will tell you whether you're united around a common customer value statement, or not.
I don't think anyone would dispute Apple's ability, under the leadership of Steve Jobs, to deliver a superior customer experience that has been of enormous value and wealth. Well some may, but they may very well be on a different planet, or a different platform, at least.
But the raging debate and intense speculation is about Job's roll in achieving such an incredible juggernaut of customer value and loyalty. For, if he was THE source, then sooner or later the enterprise will run out of this rarified inspirational gas and lose, the employee's, customer's and investors loyalties. Those who believe in Job's magical and mystical powers to somehow divine the tech market's entrails, will see this as the end of a great era and dynasty.
On the other hand if, as one commentator puts it - Apple is "infected with the Steve Job's virus" then this ship will be sailing high on the seas of customer value for a long time. My hope, is in the latter state for Apple. But even if this is not the case, Apple's roadmap (under Job's direction) is probably in good shape to deliver great value for a least a few more years.
It begs the question how does Apple consistently deliver such a great customer experience at so many levels?
If I was to point to one thing, I would point to their culture. According to Mac Observer writer Chuck La Tournous: "Apple understands the importance of creating a culture that has this DNA. It may not use focus groups, but it does pay a lot of attention to how decisions are made and how culture is infused into its employees. They’ve even reportedly devoted a significant effort to studying—and documenting—the process."
Culture infused into its employees - this is the only way to sustain value beyond one great leader. Culture is what takes a group of individuals and knits them together into a society that operates with a singular mission and focus. And, if that culture is based upon a passionate commitment to delivering superior customer value it becomes not only a glue but an engine that drives the company to even greater value regardless of any one single individual in the organization.
In fact, I believe, if the entire organization is not behind delivering this kind of customer value, it's virtually impossible to achieve with the kind of consistency that Apple has attained. One author refers to this as institutionalizing the delivery of value to the intended customer. Teaching the organization to focus on the end result (customer experience), not the means to this result (products and services.)
That will be the most important legacy of Steve Job's, way beyond the beautifully designed and delivered technology of today to the organization (organism?) who's culture is designed to deliver a consistently superior customer experience.