Lean Service DesignAuthor

Sense and Respond: The Journey to Customer

Purpose

Stephen Parry, Susan Barlow and Mike Faulkner.

Stephen ParryCEO f S B i Diff tlCEO of See Business Differently.

Author of Sense and Respond: The Journey to Customer Purpose.

Visiting Fellow to the Lean Enterprise Academy.Operational Research advisor to the

Customer Contact Association.

Stephen.Parry@seebusinessdifferently.comTwitter: Leanvoices

Blog: Leanvoices comBlog: Leanvoices.comWebsite: www.seebusinessdifferently.com

Topic Areas:

• Why today’s business models do not support the modern customer.

• Why have we designed out our customers and employees?

• What happens to people when technology is the face of the company?

• Changing the way we develop and bring to market new software applications.

• Changing the way organisations think and operate.

• A new role for employees, managers and leaders.

What is your change agenda?What is your change agenda?

hang

eee

of c

hD

egre

Lean Deployment Considerations

New KPIs

NewProcess

New System

New Structure

Current ‘change’ drivers

• Government spending cuts• Global competitionG oba co pet t o• Global sourcing• New technologiesNew technologies• Fiscal pressures• Workforce expectations• Workforce expectations• Social networks• Customer individualisation• Customer individualisation• Customer customisation

Customer business co creation• Customer-business co-creation

Modern businesses are not designedto meet the needs of the modern customer.

We need to Sense what matters soonerand Respond quicker.

We need modern operating systems which lock onto changing customer needs.which lock onto changing customer needs.

We need to manage the explosion in variety and individualisation.g p y

We need a different approach to people management and leadershipmanagement and leadership.

The customer challenge: They don’t have time………….they say things like:

Solve my problem, completely.y p , p y

Don't waste my time or cause me hassle.

Minimise the cost of doing business with youMinimise the cost of doing business with you.

Provide exactly what I need and deliver value where I need it.

Reduce the number of decisions I must make to resolve my problems.

Don’t get me to help you; I want you to help me!

7Adapted from Lean Solutions: Jim Womack and Dan Jones by Stephen Parry

Question:

What would organisations do if they had to pay for all the customer time theyto pay for all the customer time they

wasted?

8Adapted from Lean Solutions: Jim Womack and Dan Jones by Stephen Parry

Traditional approach: Feasible parts creating an infeasible whole.

Functional units

F1 F2 F4F3 Fn

Independent SolutionsDesigned to

It’s not unusual to have thirty or more

S1 S2 S4S3 Sn

Designed to Meet functionalTargets andGoals.

solutions lining up for attention

Throughput process

©Copyright Stephen Parry 2011 All rights reserved.

Traditional approach: Feasible parts creating an infeasible whole.

Functional units

F1 F2 F4F3 Fn

Independent SolutionsDesigned to

It’s not unusual to have thirty or more

S1 S2 S4S3 Sn

Designed to Meet functionalTargets andGoals.

solutions lining up for attention

Improved Customer Experience ?

©Copyright Stephen Parry 2011 All rights reserved.

M t f V l ?Measurement of Value?

Comparing traditional targets and goals withComparing traditional targets and goals with Lean targets and goals

Customer and People Measures:

ndYou’ll not find many measures

in this zone.Flow

End

to E

n

‘If you measure your service using averages,

you will deliver an

ctio

nal

you will deliver an

average service.’

Func

ValueNo Matters to Customers Yes

Purpose

Value

©Copyright Stephen Parry 2011 All rights reserved.

What we measure today…staff,

13

Measurement before and after

Sense and Respond or Lean Enterprise approach

SENSE what matters DRIVE the service and

ctur

ep at

a

p

SENSE what matters to customers and

service users

DRIVE the service and develop on-demand flow

p In

fras

truc

rela

tions

hi

Dem

and

Da

rela

tions

hiPeople

1.People

2.People

3.Your customers or Your operating Your support

Dev

elop

Bui

ld r

Cap

ture

DB

uild

ryour clients customersp g

staffpp

organisation

Adapt – Evolve – Inform – Innovate

Design around customers not only the service user

RESPOND

©Copyright Stephen Parry 2011 All rights reserved.

Mass Production Organisations

Mass Mass

Company pushes products and services ON-COMMANDCustomers and employees are designed out

Mass Production

assCustomisation

Transactionaland processed

Incentivisedcontribution

Functionalefficiency

Directand control

Customer experience Employee motivation Executive leadershipSupport operations

Willing contribution

Relationaland personal

End-to-endeffectiveness

Listenand adapt

MassSpecialisation

MassAdaptation

Customer pulls products and services ON-DEMANDC t d l d i d iCustomers and employees are designed in

Sense and Respond Organisations (Lean Design)

©Copyright Stephen Parry 2011 All rights reserved.

Mass Adaptation

ue

Mass Specialisationar

d

and

uniq

u

and

stan

d

FourPer

sona

l

Per

sona

l a

Four Operating

Modes

ze fi

ts a

ll

d P

lay

One

siz

Plu

g an

d

Mass Production Mass Customisation©Copyright Stephen Parry 2011 All rights reserved.

Climetrics ® Operating Modes and their Characteristics

Character OfferingsCustomer

ExperienceEmployee Expertise

Improvement Responsibility

Management Focus

Competitive Basis

Leadership Focus

The Personal

Personalised, individual,Bespoke.Unique

Customer experience is personal and

unique

Expert Broad knowledge to

provideFront-line

experimentation

Creativity, expertise, new products and

services

Trusted advisor and

expertListen and ss ta

tion

ShopperUnique.

Flexible Offerings

unique

Co-Creation of solution design

provide integrated solutions

experimentationand Learning

services. Customer outcomes.

Problem Solving

Integration

Business Outcomes

adapt

High level ofDeveloping staff

knowledgeIn-depth

specialities connected toon

Ma

Ada

pt

The DepartmentStore

More choice from a variety

of standard offerings

High level of customer

interaction to identify needs and situation

Specific and deep specialist knowledge and

skills

Front-line staff

ManagersCapture and reuse

solutions

Effectiveness

connected to expert

networks

Economies of Scope

Consultative

Discuss simple

Mas

sSp

ecia

lisat

i

Plug-and-playFixed menu with simple

options

pneeds and available options

Low customer involvement

during solution design

Understand basic option

configurations

Central Change Teams

Managers

Cost, efficiency and Coordination

Commodity Driven

Emphasis on providing

value-add and choice

Direct and ControlM

ass

Cus

tom

isat

ion

design

One-size fits all Low Variety

Transactionaland

Processed

No customerBasic

ImprovementBoards

ImprovementSpecialists

Employee utilisation, cost reduction, work intensification

Commoditised

High Volume

Low MarginsCommand and

ControlMas

s ro

duct

ion

No customer involvement in solution design Suggestion

Schemes

intensification.

Economies of Scale

Pr

Climetrics ® is a registered trademark of Stephen Parry: © 2011 All Rights Reserved

Climate Strength

Climetrics® : Service Climate Comparison Typical Industry Distribution

High EnergyUtilities

WaterUtilities

InsuranceServices

Low-costAirline Travel

PurchasingComputers

InvestmentServices

Medium

Consumer IT Differentiation

Health-CareServicesMobile Phone

Support Services

Revenueand Tax

Airline TravelServices

Legal AdviceCredit Card

Services

Consumer Advice

Corporate ITPost and

Parcel Services

Mobile PhonePurchasing

IndependentFinancialAdvice

Low

Mass P d ti

Mass C t i ti

MassS i li ti

MassAd t ti

Consumer IT SupportServices

Differentiation CurveConsumer

BankingServices

Work andPensions

Corporate ITServices

Parcel Services

Climate Type

Production Customisation Specialisation Adaptation

Climetrics ® is a registered trademark of Stephen Parry: © 2011 All Rights Reserved

Climate Strength

Climetrics® : Service Climate Comparison Before and After

High

Solution

End-to-end Management

After

Medium CustomerService

SolutionProviders

Differentiation

Before

Low

Mass P d ti

Mass C t i ti

MassS i li ti

MassAd t ti

Differentiation Curve

Climate Type

Production Customisation Specialisation Adaptation

Climetrics ® is a registered trademark of Stephen Parry: © 2011 All Rights Reserved