The Holistic Business Discipline.
How can they embed the controls of value creation from end-to-end, so that C-level management focus on interdependencies enabling superior customer experience and greater profitability?
Every commercial enterprise has customer experience as one of its key strategic metrics. CEOs and COOs talk constantly of the importance of customer satisfaction to business resilience and growth. So, isn’t it something of an irony that the systems and routines being used to manage and measure customer experience are designed from the inside out?
The paradox of an outdated legacy
Ostensibly, it is the legacy of a less customer-centric business environment that means even modern-day managerial routines, such as strategic planning and deployment, budgeting, creation and cascading of KPIs and other performance management systems, are purposed for controlling separate functions, rather than end-to-end value creation.
The paradox is that the modern CEO does not aim to deliberately destroy customer experience and satisfaction when they create these managerial routines, but when business performance fails, they are unable to pinpoint why due to inadvertent blind spots.
A facility management perspective
Let’s look at the example of facility management services. The purpose of the services from the customers’ point of view is to prevent the house or building from having any issues or complications. Yet, for the service provider, this translates into rigid corporate KPIs: the call centre is measured on the rate they “respond to customers within 2 mins”, the technicians are measured on the KPI of “billable/versus non billable hours”, the quality department has the KPI “number of complaints awaiting our response” etc.
Meanwhile, the COO is holding workshops and mapping the customer experience journey with the middle management, the C-level executives are planning next year’s budget, which will soon be cascaded to each function vertically with new corporate KPI targets. All the while, C-level management knows that the customer doesn’t care if a company is profitable or not, and they are right.
The silo problem
The foundation upon which those traditional business models are built is now shaky at best, creating silos of selective competency that do not foster creative thinking. The customary CX mindset and tools are not enough to change the paradigm of those deep wired managerial routines. A market study conducted by Forrester last year concluded that, “Poor CX negatively impacts the bottom line, yet companies let internal silos stand in the way of their success.”
Some 48% of decision makers surveyed by Forrester said their top challenge to delivering a good CX is the lack of a cohesive strategy across teams. This shows that we need to acknowledge the limitations stemming from traditional management models, tear down the cages that departments were built behind, and create end-to-end value through a holistic enterprise approach.
The end-to-end challenge
The goal of a company is to make a profit by satisfying its customers, hence CEOs still need to embed the controls of value creation and effectiveness. The question is, how can they embed the controls of value creation from end-to-end, so that C-level management focus on interdependencies enabling superior customer experience and greater profitability? How can they change the old and rigid managerial routines such as top-down budgeting, strategic planning, and vertical deployment of extraneous targets and lagging KPIs?
The holistic solution
The holistic business discipline is a solution that integrates Lean Management, Systems Thinking, Theory of Constraints, Service Design and Risk Management. It is a system that enables CEOs to zoom out and zoom in; to manage the organisation at both the systems level and process details level.
Many CEOs operate with the belief that their sole role is that of macro-manager or “big picture” thinker. However, to be effective, leaders need to understand the shop floor environment and be able to navigate fluently between strategic, tactic and operational levels.
The holistic solution involves bringing the CEO into the entire business process; mapping activity from end-to-end, understanding it from the customers’ perspective, streamlining information flow and decision making, and translating all of this into a visual representation that is monitored daily. It eliminates the top-down command and control system and creates nested teams that conduct these daily reviews based on customer needs and profitability targets, with end-to-end real time information rather than lagging KPIs.
Daily monitoring provides real-time data on:
1. Customer value and failure demand types and the frequency end-to-end
2. Current demand and capacity (before providing promises to the customers)
3. End-to-end queuing due to process constraints
4. First time quality at the moment of transaction with customers
5. The fulfilment of promises to customers
6. The risks related to suppliers
7. The overall customer satisfaction
8. The profitability
The beauty of all of this is that every CEO can finally get to see the entire business as an architect rather than the ship’s captain and when needed, make the right decisions by identifying the leverage points within the system.
It takes 2-3 years to redesign the managerial routines from silos to the holistic enterprise, and the results can be transformational. Failure demand is minimised by 40-50%, first time quality increases by 30%, promise deliveries to customers improves by 99.5%, profitability increases by 18-30% and most importantly, customer and employee satisfaction levels are dramatically improved.
Highly disciplined mentoring & advising series focused to lead you hands-on.
The business discipline focused on the end-to-end performance with customers,
suppliers and people is a game-changer. Your key leaders will work alongside
an advisor to redesign the business.
Do you experience that:
|Lost customer focus and slow adaptation to the new reality||Restored customer obsession and fast adaptation|
Teams or departments working isolated, competing to achieve their own KPI’s
Slow and isolated decision making without involving the customers, suppliers and people
One purpose, end-to-end measures focusing on the customer value and enterprise wealth
Timely and proactive decisions together with the customers, suppliers and people
|Not sharing essential information timely between customers, suppliers and departments||Daily sharing essential information and signals|
|Managers are in the firefighting mode, or only in the doing mode||Leaders proactively manage risks and improve the system based on rapid PDCA (plan-do-check-act) experiments|
|Blaming culture||Teamwork and learning culture|
|People creating value on the shop floor don’t feel valued by managers|
Increasing operational costs, bad quality and queuing
|Create a leadership enabling people on the shop floor to be heard and valued|
Improved quality and througput, decreased end-to-end costs