Operational Excellence and Continuous Improvement – Theory or Practice?

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I’m not only a process consultant, I am a customer who has just seen amazing process problems at a furniture retailer I purchased from in mid-September, when my order and deposit for a sectional were taken . The wait was long but finally, last Saturday night at 7 pm, they called to say my sectional was ready for delivery and could I please come in to pay the balance owing; I said I’d be there early in the week to do so and they did not speak up to say that would be a problem. So I step in to customer service on Monday at 3 pm to pay, and am told (after several employees gathered to quietly consult each other) that my sectional has been sold out from under me. Not in those words of course. No, the “system” allocated my furniture to another customer who paid up before I did. It happens, they shrugged.

Well, this just didn’t make any sense at all. They wouldn’t take my payment information over the phone, I got there in what I thought was a reasonable time, and no one said that I had a zero-minutes window to make the payment. In fact, the customer service supervisor said there was a two-day window, and the manager said it was a three-day window. So even the people who should know the window don’t give consistent information. Nevertheless, I was within the shorter, two-day window. So now my furniture is winging its way to someone else, and “maybe” they can get me a one from a shipment arriving next Sunday…but wait…no…then the manager says they might get me another set in the next couple of weeks. No promises though.

Now all around the customer service area were posted signs about “Organizational Excellence” and “Continuous Improvement”.  I immediately wondered if these words are just talk, or if management is actually committed to walking the walk that matches that talk.

So here’s my little rant: If you are actually committed to operational excellence and continuous improvement, then blaming your technology, and knowing it does this kind of thing, would require that you fix that problem.

Blaming your system for allocating product incorrectly is bad customer service, and having a system that makes such bloopers is not aligned with an “operational excellence” philosophy.

Operational excellence includes looking at the customer experience and my experience with this retailer two days ago was unpleasant and very disappointing. My trust in them has eroded considerably.

That same day, I contacted the Ontario Director of Stores (whose tagline is “Exceeding Expectations”) who said he will look into this matter. He sounds genuine. But will it get me my furniture this week? That’s all I really want. Oh, and not to have customer service people stall me and try to make it my fault. That’s not operational excellence, or any kind of excellence.

Good Process Design Increases Profits and Wealth

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If you think process discussions are frivolous, and good process design just a nice-to-have, think again. Look around and you can see numerous examples of how process is a big part of our lives. For instance, today The Economist published two articles that are quite process-oriented. One talked about how badly red tape affects various world economies, and the other was about best practices in selling. All process, isn’t it?

The Economist’s article headlined “Pointless Regulation” commented on a report (“Doing Business 2012”) compiled by the World Bank’s International Finance Corporation that assesses how easy it is to do business around the world. The gist of it is that cutting red tape makes countries wealthier, from increasing jobs and real output, to lowering the cost of credit and prices for consumers. And what is red tape? Nothing but bad processes. 

So how does this translate for your business? Bad processes can increase your cost of labour; increase your cost of capital; create drag that reduces customer satisfaction and drives away sales; and reduce the quality of your talent. And that’s just for starters.  Good process design increases profits and wealth — for countries, for businesses, for individuals, and yes,  for not-for-profit organizations to achieve more with less.

The second example of process focuses on standardization, and is quoted in The Economist’s  Schumpeter in his “The Art of Selling”. The premise is that selling has in recent times been reduced in status, and that MBA programs do not usually have a separate subject addressing the topic of sales. Times sure have changed – in the 70’s and 80’s, many a CEO came from sales; in recent years, a CEO was more likely to come from finance.

The Economist states: “There are signs that companies are starting to pay attention to selling. Some are trying to turn it from an art into a science. At the very least, this means standardising practices taken from the most successful salespeople.”  Well, standardizing those successful (“best”) practices is a path to good process design to obtain great results – more sales and bigger profits.

So next time someone says that reviewing your processes is something you’ll have to do when times improve, or when things are less frantic, you can explain the wealth building principle inherent in good process design and management.  And if you’ve been too busy to give much thought to how your people do what they do in your organization, better start now. It could mean the difference between survival and demise; the difference between declining or increasing profits and wealth. You choose. Don’t lose.