Customer relationship management emerged in the 1980’s in the form of database marketing. In those tranquil pre-social media days, the possibility of ‘managing’ clients may have been a possibility although Twitter and Facebook took care of that. Modern managers face a more dynamic environment. If you are one, then what are the trends you should be monitoring yourself (as opposed to leaving it to others).
If you want to drip feed plants, you have to keep the flow of liquid regular. The same applies to drip-feed marketing. Customers are fickle dare we say forgetful. Denizon recommends you monitor each department in terms of Relationship Freshness. When were the people on your list last contacted, and what ensued from this?
Next up comes the Quality of Engagements that follow from these efforts. How often do your leads respond at all, and how many interfaces does it take to coax them into a decision? You need to relate this to response blocks and unsubscribes. After a while you will recognise the tipping point where it is pointless to continue.
Response Times relate closely to this. If your marketing people are hot then they should get a fast response to sales calls, email shots and live chats. It is essential to get back to the lead again as soon as possible. You are not the only company your customers are speaking too. Fortune belongs to the fast and fearless.
The purpose of marketing is to achieve Conversions, not generate data for the sake of it. You are paying for these interactions and should be getting more than page views. You need to drill down by department on this one too. If one team is outperforming another consider investing in interactive training.
Finally Funnel Drop-Off Rate. Funnel analysis identifies the points at which fish fall off the hook and seeks to understand why this is happening. If people click your links, make enquiries and then drift away, you have a different set of issues as opposed to if they do not respond at all.
You should be able to pull most of this information off your CRM system if it is half-decent, although you may need to trigger a few options and re orientate reporting by your people in the field. When you have your big data lined up speak to Denizon. We have a range of data analysts brimming over with fresh ideas.
Tightening organisational flow to improve productivity and minimise costs is a growing concern for many businesses post the Global Financial Crisis. Businesses can no longer afford to waste time and personnel on inefficient processes. Organisations using either Six Sigma or Lean techniques better manage their existing resources to maximise product out-put. Both of these techniques involve considerable evaluation of current processes.
What is Six Sigma?
Six Sigma is an organisational management strategy that evaluates processes for variation. In the Six Sigma model, variation equates waste. Eliminating variation for customer fulfilment allows a business to better serve the end-user. In this thought model, the only way to streamline processes is to use statistical data. Each part of a process must be carefully recorded and analysed for variation and potential improvements. The heart of the strategy embodied by Six Sigma is mathematical. Every process is subject to mathematical analysis and this allows for the most effective problem solving.
What is a Lean Model?
Lean businesses do not rely on mathematical models for improvement. Instead, the focus is on reducing steps in the customer delivery cycle, which do not add value to the final deliverable. For example, maintaining excess inventory or dealing with shortages would both be examples of waste behaviour. Businesses that operate using Lean strategies have strong cash flow cycles. One of the best and most famous examples of Lean in action is the Toyota Production System (TPS). In this system, not only is inventory minimised, but physical movement for employees also remains sharply controlled. Employees are able to reach everything needed to accomplish their tasks, without leaving the immediate area. By reducing the amount of movement needed to work, companies also remove wasted employee time.
Industry Applications for Lean and Six Sigma
Lean businesses reduce the number of steps between order and delivery. The less inventory on hand, the less it costs a business to operate. In industries where it is possible to create to order, Lean thinking offers significant advantages. Lean is best utilised in mature businesses. New companies, operating on a youthful model, may not be able to identify wasteful processes. Six Sigma has shown its value across industries through several evolution’s. Its focus on quality of process makes it a good choice for even brand new businesses. The best use is the combination of the two strategies. With the Lean focus on speed and the Six Sigma focus on quality combined, the two organisational processes create synergy. By itself, Lean does not help create stable, repeating success. Six Sigma does not help increase speed and reduce non value-added behaviours. Combined, these two strategies offer incredible value to every business in cost savings.
Using Technology to Implement Lean Six Sigma
Automation processes represent an opportunity for businesses to implement a combination of both Lean and Six Sigma strategies. Any technology that replaces the need for direct human oversight reduces costs and increases productivity. A few examples of potentially cost saving IT solutions include document scanning, the Internet, and automated workflow systems.
* Document Scanning – Reducing dependency on paper copies follows both Lean and Six Sigma strategies. It is a Lean addition in that it allows employees to access documents instantly from any physical location. It is Six Sigma compliant in that it allows a reduction on process variation, since there is no bottleneck on the flow of information.
* The Internet – The automation potential offered by the Internet is limitless. Now, businesses can enter orders, manage logistics and perform customer service activities from anywhere, through a hosted portal. With instant access to corporate processes from anywhere, businesses can manage workflow globally, allowing them to realise cost savings from decentralisation.
* Automated Work Systems – One of the identified areas of waste in any business is processing time. The faster orders are processed and delivered, the greater the profits for the company and the less the expense per order. When orders sit waiting for attention, they represent lost productivity and waste. Automated work systems monitor workflow and alert users when an item sits longer than normal. These systems can also reroute work to an available employee when the original worker is tied up.
Each of these IT solutions provides a method for businesses to either reduce the number of steps in a process or improve the quality of the process for improved customer service.
Identifying Areas for Lean Six Sigma Implementation
Knowing that improved processes result in improved profits, identifying areas for improvement is the next step. There are several techniques for creating tighter processes with less waste and higher quality. Value Stream Mapping helps business owners and managers identify areas of waste by providing a visual representation of the total process stream. Instead of improving single areas for minimal increases in productivity, VSM shows the entire business structure and flow, allowing management to target each area of slow down for maximum improvement in all areas.
Seeing the areas of waste helps management better determine how processes should work to best obtain the desired outcomes. Adding in automated processes helps with improved process management, when put in place with a complete understanding of current systems and their weaknesses. Start with mapping and gain a bird’s-eye view of the situation, in order to make the changes needed for improvement.
Six Sigma is an industrial business strategy directed at improving the quality of process outputs by eliminating errors and system variables. The end objective is to achieve a state where 99.99966% of events are likely to be defect free. This would yield a statistical rating of Sigma 6 hence the name.
The process itself is thankfully more user-friendly. It presents a model for evaluating and improving customer relationships based on data provided by an automated customer relations management (CRM) system. However in the nature of human interaction we doubt the 99.99966% is practically achievable.
Six Sigma Fundamentals
The basic tenets of the business doctrine and the features that set off are generally accepted to be the following:
Continuous improvement is essential for success
Business processes can be measured and improved
Top down commitment is fundamental to sustained improvement
Claims of progress must be quantifiable and yield financial benefits
Management must lead with enthusiasm and passion
Verifiable data is a non-negotiable (no guessing)
Steps Towards the Goal
The five basic steps in Six Sigma are define the system, measure key aspects, analyse the relevant data, improve the method, and control the process to sustain improvements. There are a number of variations to this DMAIC model, however it serves the purpose of this article. To create a bridge across to customer relationships management let us assume our CRM data has thrown out a report that average service times in our fast food chicken outlets are as follows.
3 to 8 Minutes
9 to 10 Minutes
Table: Servicing Tickets in Chippy’s Chicken Cafés
Using DMAIC to unravel the reasons behind this might proceed as follows
Define the system in order to understand the process. How are customers prioritized up front, and does the back of store follow suit?
Break the system up into manageable process chunks. How long should each take on average? Where are bottlenecks most likely to occur?
Analyse the ticket servicing data by store, by time of day, by time of week and by season. Does the type of food ordered have a bearing?
Examine all these variables carefully. Should there for example be separate queues for fast and slower orders, are there some recipes needing rejigging
Set a goal of 90% of tickets serviced within 8 minutes. Monitor progress carefully. Relate this to individual store profitability. Provide recognition.
A symbiotic relation between CRM and a process improvement system can provide a powerful vehicle for evidencing customer care and providing feedback through measurable results. Denizon has contributed to many strategically important systems. Our consultants are highly trained and waiting for your call.
The theory that it is possible to manage organizational change (Change Management) in a particular direction has done the rounds for quite some time, but is it true about Change Management. Was Barrack Obama correct when he said, “Change will not come if we wait for some other person or some other time. We are the ones we have been waiting for. We are the change that we seek.” Or, was business coach Kelly A Morgan more on the button when she commented, “Changes are inevitable and not always controllable. What can be controlled is how you manage, react to, and work through the change process.” Let us consult the evidence and see what statisticians say.
What the Melcrum Report Tells Us Melcrum are “internal communication specialists who work alongside leaders and teams around the globe to build skills and best practice in internal communication.” They published a report after researching over 1,000 companies that attempted change management and advised:
• More than 50% report improved customer satisfaction
• 33% report higher productivity
• 28% report improvements in employee advocacy
• 27% improved status as a great place to work
• 27% report increased profitability
• 25% report improved absenteeism Sounds great until we flip the mirror around and consider what the majority apparently said: • 50% had no improvement in customer service
• 67% did not report increased productivity
• 72% did not note improvements in employee advocacy
• 73% had no improved status among job seekers
• 73% did not report increased profitability
• 75% did not report any reduction of employee absenteeism
This shows it is still a great idea to hear what all parties have to say before reaching a conclusion. You may be interested to know the Melcrum report gave rise to the legend that 70% of organisation change initiatives fail. This finding has repeated numerous times. Let’s hear what the psychologists have to say next. There is a certain amount of truth in the old adage that says, “You can lead a horse to water but you cannot make him drink.” Which of us has not said, “Another flavour of the week … better keep heads down until it passes” during a spell in the corporate world. You cannot change an organization, but you can change an individual. At the height of the Nazi occupation of 1942, French philosopher-writer Antoine de Saint-Exupéry said, “A rock pile ceases to be a rock pile the moment a single man contemplates it, bearing within him the image of a cathedral”. Psychology Today suggests five false assumptions change management rests upon, THAT ARE SIMPLY NOT TRUE.
1. The external world is orderly, stable, predictable and can be managed
2. Change managers are objective, and do not import their personal bias
3. The world is static and orderly and can be changed in linear steps
4. There is a neutral starting point where we can gather all participants
5. Change is worthy in itself, because all change is an improvement
Leo Tolstoy wrote, “Everyone thinks of changing the world, but no one thinks of changing himself.” A prophet can work no miracles unless the people believe. From the foregoing, it is evident that change management of an organization is a 70% impossibility, but encouraging an individual to grow is another matter. A McKinsey Report titled Change Leader, Change Thyself fingers unbelieving managers as the most effective stumbling stones to change management. To change as individuals – and perhaps collectively change as organizations – we need to “come to our own full richness”, and as shepherds lead our flock to their “promised land”, whatever that may be. Conversely, herding our flock with a pack of sheepdogs extinguishes that most precious thing of all, human inspiration.
Knowledge Workers include academics, accountants, architects, doctors, engineers, lawyers, software engineers, scientists and anybody else whose job it is to think for a living. They are usually independent-minded people who do not appreciate project managers dishing out detailed orders. Kanban project management resolves this by letting them choose the next task themselves.
The word ‘Kanban’ comes from a Japanese word meaning ‘billboard’ or ‘signboard’. Before going into more detail how this works let’s first examine how Japanese beliefs of collaboration, communication, courage, focus on value, respect for people and a holistic approach to change fit into the picture.
The Four Spokes Leading to the Kanban Hub
Visualise the Workflow –You cannot improve what you cannot see. The first step involves team members reducing a project to individual stages and posting these on a noticeboard.
Create Batches – These stages are further reduced to individual tasks or batches that are achievable within a working day or shift. More is achievable when we do not have to pick up where we left off the previous day.
Choose a Leader the Team Respects – Without leadership, a group of people produces chaotic results. To replace this with significant value they need a leader, and especially a leader they can willingly follow.
Learn and Improve Constantly – Kaizen or continuous improvement underpins the Japanese business model, and respects that achievement is a step along the road, and not fulfilment.
The Kanban Method in Practice
Every Kanban project begins with an existing process the participants accept will benefit from continuous change. These adjustments should be incremental, not radical step-changes to avoid disrupting the stakeholders and the process. The focus is on where the greatest benefits are possible.
Anybody in the team is free to pull any batch from the queue and work on it in the spirit of collaboration and cooperation. That they do so, should not make any waves in a culture of respect for people and a holistic approach to working together. All it needs is the courage to step out of line and dream what is possible.
The Kanban Project Method – Conclusions and Thoughts
Every engine needs some sort of fuel to make it go. The Kanban project management method needs collaboration, communication, courage, focus on value, respect for people and a holistic approach to work. This runs counter to traditional western hierarchies and probably limits its usefulness in the West.
The ‘Peter Principle’ concerning why managers fail derives from a broader theory that anything that works under progressively more demanding circumstances will eventually reach its breaking point and fail. The Spanish philosopher José Ortega y Gasset, who was decidedly anti-establishment added, “All public employees should be demoted to their immediately lower level, as they have been promoted until turning incompetent”.
The Peter Principle is an observation, not a panacea for avoiding it. In his book The Peter Principle Laurence J. Peter observes, “In a hierarchy every employee tends to rise to his level of incompetence … in time every post tends to be occupied by an employee who is incompetent to carry out its duties … Work is accomplished by those employees who have not yet reached their level of incompetence.”
Let’s find out what the drivers are behind a phenomenon that may be costing the economy grievously, what the warning signs are and how to try to avoid getting into the mess in the first place.
Drivers Supporting the Peter Principle
As early as 2009 Eva Rykrsmith made a valuable contribution in her blog 10 Reasons for Executive Failure when she observed that ‘derailed executives’ often find themselves facing similar problems following promotion to the next level:
The Two Precursors
They fail to establish effective relationships with their new peer group. This could be because the new member, the existing group, or both, are unable to adapt to the new arrangement.
They fail to build, and lead their own team. This could again be because they or their subordinates are unable to adapt to the new situation. There may be people in the team who thought the promotion was theirs.
The Two Outcomes
They are unable to adapt to the transition. They find themselves isolated from support groups that would otherwise have sustained them in their new role. Stress may cause errors of judgement and ineffective collaboration.
They fail to meet business objectives, but blame their mediocre performance on critical touch points in the organization. They are unable to face reality. Either they resign, or they face constructive dismissal.
The Warning Signs of Failure
Eva Rykrsmith suggests a number of indicators that an individual is not coping with their demanding new role. Early signs may include:
Lagging energy and enthusiasm as if something deflated their ego
No clear vision to give to subordinates, a hands-off management style
Poor decision-making due to isolation from their teams’ ideas and knowledge
A state akin to depression and acceptance of own mediocre performance
How to Avoid a ‘Peter’ in Your Organization
Use succession planning to identify and nurture people to fill key leadership roles in the future. Allocate them challenging projects, put them in think tanks with senior employees, find mentors for them, and provide management training early on. When their own manager is away, appoint them in an acting role. Ask for feedback from all concerned. If this is not positive, perhaps you are looking at an exceptional specialist, and not a manager, after all.
Consider the future, and not the past when interviewing for a senior management position. Ask about their vision for their part of the organization. How would they go about achieving it? What would the roles be of their subordinates in this? Ask yourself one very simple question; do they look like an executive, or are you thinking of rewarding loyalty.
How to Avoid Becoming a ‘Peter’ Perhaps you are considering an offer of promotion, or applying for an executive job. Becoming a ‘Peter’ at a senior level is an uncomfortable experience. It has cost the careers of many senior executives dearly. We all have our level of competence where we enjoy performing well. It would be pity to let blind ambition rob us of this, without asking thoughtful questions first. Executives fail when they over-reach themselves, it is not a matter of bad luck.
The Japanese word Heijunka, pronounced hi-JUNE-kuh means ‘levelling’ in the sense of balancing workflows. It helps lean organizations shift priorities in the face of fluctuating customer demand. The goal is to have the entire operation working at the same pace throughout, by continuously adjusting the balance between predictability, flexibility, and stability to level out demand.
Henry Ford turned the American motor manufacturing industry upside down by mass-producing his iconic black motor cars on two separate production lines. In this photograph, body shells manufactured upstairs come down a ramp and drop onto a procession of cars almost ready to roll in 1913.
Smoothing Production in the Call Centre Industry
Call Centres work best in small teams, each with a supervisor to take over complex conversations. In the past, these tended to operate in silos with each group in semi-isolation representing a different set of clients. Calls came through to operators the instant the previous ones concluded. By the law of averages, inevitably one had more workload than the rest at a particular point in time as per this example.
Modern telecoms technology makes it possible to switch incoming lines to different call centre teams, provided these are multi-skilled. A central operator controls this manually by observing imbalanced workflows on a visual system called a Heijunka Box. The following example comes from a different industry, and highlights how eight teams share uneven demand for six products.
This departure from building handmade automobiles allowed Henry to move his workforce around to eliminate bottlenecks. For example, if rolls of seat leather arrived late he could send extra hands upstairs to speed up the work there, while simultaneously slowing chassis production. Ford had the further advantage of a virtual monopoly in the affordable car market. He made his cars at the rate that suited him best, with waiting lists extending for months.
A Modern, More Flexible Approach
Forces of open competition and the Six Sigma drive for as-close-to-zero defects dictates a more flexible approach, as embodied in this image published by the Six Sigma organisation. This represents an ideal state. In reality, one force usually has greater influence, for example decreasing stability enforces a more flexible approach.
Years ago, Japanese car manufacturer Toyota moved away from batching in favour of a more customer-centric approach, whereby buyers could customise orders from options held in stock for different variations of the same basic model. The most effective approach lies somewhere between Henry Ford’s inflexibility and Toyota’s openness, subject to the circumstances at the moment.
A Worked Factory Example
The following diagram suggests a practical Heijunka application in a factory producing three colours of identical hats. There are two machines for each option, one or both of which may be running. In the event of a large order for say blue hats, the company has the option of shifting some blue raw material to the red and green lines so to have the entire operation working at a similar rate.
Predictability, Flexibility, and Stability at Call Centre Service
The rate of incoming calls is a moving average characterised by spikes in demand. Since the caller has no knowledge whether high activity advisories are genuine, it is important to service them as quickly as possible. Lean process engineering provides technology to facilitate flexibility. Depending on individual circumstances, each call centre may have its own definition of what constitutes an acceptably stable situation.
Master Data is the critical electronic information about the company we cannot afford to lose. Accordingly, we should sanitise it, look after it, and store it safely in several separate places that are independent of each other. The advent of Big Data introduced the current era of huge repositories ‘in the clouds’. They are not, of course but at least they are remote. This short article includes a discussion about Hadoop, and whether this is a good platform to back up your Master Data.
Hadoop is an open-source Apache software framework built on the assumption that hardware failure is so common that backups are unavoidable. It comprises a storage area and a management part that distributes the data to smaller nodes where it processes faster and more efficiently. Prominent users include Yahoo! and Facebook. In fact more than half Fortune 50 companies were using Hadoop in 2013.
Hadoop – initially launched in December 2011 – has survived its baptism of fire and became a respected, reliable option. But is this something the average business owner can tackle on their own? Bear in mind that open source software generally comes with little implementation support from the vendor.
The Hadoop Strong Suite
Free to download, use and contribute to
Everything you need ‘in the box’ to get started
Distributed across multiple firewalled computers
Fast processing of data held in efficient cluster nodes
Massive scaleable storage you are unlikely to run out of
There is more to Hadoop than writing to WordPress. The most straightforward solutions are uploading using Java commands, obtaining an interface mechanism, or using third party vendor connectors such as ACCESS or SAS. The system does not replace the need for IT support, although it is cheap and exceptionally powerful.
The Not-Free Safer Option
Smaller companies without in-depth in-house support are wise to engage with a technical intermediary. There are companies providing commercial implementations followed by support. Microsoft, Amazon and Google among others all have commercial versions in their catalogues, and support teams at the end of the line.
Speak to Denizon Next
It is unwise to rely on a backup you either do not trust or do not fully understand. We have business continuity consultants with a breadth of experience that’s worth considering. Following a risk assessment we’ll provide you with cost effective solutions, that take the worry out of backup so you always feel secure.
Right now, you’re probably thinking that’s a statement of opposites. Something dreamed up by a consultant to impress, or just to fill a blog page. But wait. What if I taught you to create order in procedural chaos in five minutes flat? Would you be interested then?
The first step is to create a story line …
Let’s imagine five friends decide to row a boat across a river to an island. Mary is in charge and responsible for steering in the right direction. John on the other hand is going to do the rowing, while Sue who once watched a rowing competition will be on hand to give advice. James will sit up front so he can tell Mary when they have arrived. Finally Kevin is going to have a snooze but wants James to wake him up just before they reach the island.
That’s kind of hard to follow, isn’t it …
Let’s see if we can make some sense of it with a basic RASCI diagram …
Responsibility Matrix: Rowing to the Island
Now let’s add a simple timeline …
Responsibility Matrix: Rowing to the Island
Rows the Boat
Surfaces From Sleep
Ties Boat to Tree
Things are more complicated in reality …
Quite correct. Although if I had jumped in at the detail end I might have lost you. Here’s a more serious example.
There’s absolutely no necessity for you so examine the diagram in any detail, other to note the method is even more valuable in large, corporate environments. This one is actually a RACI diagram because there are no supportive roles (which is the way the system was originally configured).
Other varieties you may come across include PACSI (perform, accountable, control, suggest, inform), and RACI-VS that adds verifier and signatory to the original mix. There are several more you can look at Wikipedia if you like. My main goal was to highlight a handy way of simplifying things, which I hope I succeeded in doing in this blog.
Organizations exploit matrix management in various ways. A company, for instance, that operates globally uses it at larger scale by giving consistent products to various countries internationally. A business entity, having many products, does not assign its people to each product full-time but assign those to different ones on a part time basis, instead. And when it comes to delivering high quality and low cost products, companies overcome industry pressures with the help of many overseeing managers. In a rapidly changing environment, organizations respond quickly by sharing information through a matrix model.
Understanding the Matrix Management Structure
A basic understanding of matrix management starts with the three key roles and responsibilities that applies in the structure.
Matrix Leader – The common person above all the matrix bosses is the matrix leader. He ensures that the balance of power is maintained in the entire organization by delegating decisions and promoting collaboration among the people.
Matrix Managers – The managers cooperate with each other by defining the respective activities that they are responsible for.
Matrix Employees – The employees have lesser direct authority but has more responsibilities. They resolve differing demands from more than one matrix managers while they work things out upwards. Their loyalty must be dual and their relationships with managers must be maintained.
Characteristics of a Matrix Structure
Here are some features that define the matrix management structure:
Hybrid Structure –The matrix structure is a mix of functional and project organization. Since it is a combination of these two, matrix management is hybrid in nature.
Functional Manager – When it comes to the technical phases of the project, the functional manager assumes responsibility. The manager decides on how to get the project done, delegates the tasks to the subordinates and oversees the operational parts of the organization.
Project Manager – The project manager has full authority in the administrative phases, including the physical and financial resources needed to complete the project. The responsibilities of a project manager comprise deciding on what to do, scheduling the work, coordinating the activities to diverse functions and evaluating over-all project performance.
Specialization –As the functional managers concentrate on the technical factors, the project managers focus on administrative ones. Thus, in matrix management, there is specialization.
Challenge in Unity of Command – Companies that employs matrix management usually experience a problem when it comes to the unity of command. This is largely due to the conflicting orders from the functional and project managers.
Types of Matrix Structure
The matrix management structure can be classified according to the level of power of the project manager. Here are three distinct types of matrix structures that are widely used by organizations.
Weak Matrix – The project manager has limited authority and power as the functional manager controls the budget of the project. His role is only part-time and more like a coordinator.
Strong Matrix – Here, the project manager has almost all the authority and power. He controls the budget, holds the full time administrative project management and has a full time role.
Balanced Matrix – In this structure type, both the project and functional managers control the budget of the project. The authority and power is shared by the two as well. Although the project manager has a full time role, he only has a part time authority for the administrative staff to report under his leadership.
Successful companies of today venture more on enhancing the abilities, skills, behavior and performances of their managers than the pursuit of finding the best physical structure. Indeed, learning the fundamentals of the matrix structure is essential to maximize its efficiency. A senior executive pointed out that one of the challenges in matrix management is not more of building a structure but in creating the matrix to the mind of the managers. This comes to say that matrix management is not just about the structure, it is a frame in the mind.