Why most Lean service programmes are failing to deliver customer value
The way that Lean is applied is not enabling customer-centricity. So what's going wrong?
"Examining the evidence shows that Lean has a way to go to enable customer-centricity."
I once made this statement to a group of Lean Six Sigma Master Black Belts. I was immediately the most unpopular person in the room and the attendees reached for justification of their qualifications as if they were life belts on the Titanic.
I did not suggest that they would mostly fail – I was not brave enough for that – although I have found many of them do. Allaboutlean.com boldly stated “Richter claims failure rates in Lean projects at well above 50%. Ignizio cites 70%, 90%, or even 95% failure rates”.
I simply don’t see the impact on the customer agenda enough – and I was a Lean Six Sigma Master Black Belt before I started looking at customer-centric thinking, which became my passion.
Here were some of the arguments that were thrown back at me:
- "Of course BPM considers the customer. Every Lean or BPM programme places the customer agenda at its centre."
- "We use exactly the same techniques to understand customers wants/needs as the best practice customer experience teams i.e. Affinity mapping and Voice of Customer."
- "The results from Lean and BPM programmes repeatedly show improvements to key customer performance indicators."
My response to these objections is the essence of Lean thinking – examine the evidence. This falls into three categories.
1. Benefit types
Go and do a web search on Lean benefits or BPM benefits. The benefits almost always cited focus primarily on costs, quality, profitability, defects, waste, etc. Sometimes the customer is never mentioned but if they are, they will rarely be mentioned in the top 5.
I’m sorry but if impact on customer can’t make it to the top 1 or 2 then I would suggest the customer is hardly at the centre. Considered: yes. Central: no.
Whenever customer experience improvement is mentioned it almost always relates to customer complaints or customer satisfaction. Reduced rate of process breakdown will certainly reduce the number of customer complaints, but this is not the same as creating a customer-centric company.
Further, I have never been particularly a fan of the term customer satisfaction. The term originated in the 70s and relates to the degree a customer thinks a business is offering a reasonable solution with a greater focus on delivering it well. It is the forerunner to how customer experience is defined and much of that misses the point. Traditional customer experience approached assess the sum of all the interactions a customer has with a company.
Yes, this offers benefits in advance of how customer satisfaction is viewed. However, the latest thinking looks at driving successful customer outcomes and the experience associated with those outcomes to the centre of everything a company does.
This is a considerably more ambitious aspiration and companies who can demonstrably do it grow disproportionately quickly and if they sustain will dominate markets. Lean and BPM in virtually any incarnation does not go anywhere near that far – hence my view these change frameworks are still predominantly “inside-out” – with the customer considered, but never central.
3. Inside-out or outside-in?
Creating a genuinely exciting, empowered and engaged customer-centric company starts with the customer and not the product or service they produce.
This differentiates between what we term an “outside-in” company where the customer is the focus for all activities and change vs “inside-out” where the company’s natural strengths, products and services represent the starting point.
I have seen many companies who announce they are “outside-in” when in reality they still identify themselves in terms of the product or service they build and then added a layer of work to improve the experience at the customer interfaces. This is not “outside-in”.
My objections to Lean are not that it is wrong, but it’s applied in a sub-optimal way to the most critical issue facing businesses: how do we put the customer at the centre of what we do and drive value – for customers and the company – as a result?
Lean service programmes are often guilty of “reductionist” thinking and in the next article in this short series I will examine this further.
Adapted from an article that originally appeared on The Next Ten Years. Republished with kind permission.