International Process and Performance Institute

I heard about a young couple who decided to open a produce stand on a vacant corner a few years ago and became wildly successful.  In the beginning it was just the two of them.  Every day they conversed with their customers about what was good, what wasn’t so good, how they used the produce, and from this developed a keen understanding of what their customers valued.  They noted these discussions in a notebook by the register and used this information daily when they bought the produce they would sell to their customers.  It was a keen strategy and their business grew quickly.  Soon it was more than they could handle by themselves and they hired an employee.  And then another, until someone suggested opening another stand on another corner in town.  This stand didn’t have the success of the first, but it was still profitable.  They continued to open more stands across the city and soon had an office, running all the stands by phone from the home office. 

By most standards a huge business success story, but the couple at one point noted the success of any one stand at no time since the expansion had ever been even close to the success of the original stand prior to expansion.  Why?  Most attribute this result to the lack of direct involvement by the owners and a logical and necessary loss for the good of the company.  I won’t argue there is some degree of effect with direct owner-customer involvement.  However, my analysis is that it has more to do with the natural learning mechanisms of feedback loops, and the fact that growth in our organizations and management systems result in significant signal loss with regard to customer feedback.  Generally speaking, the larger our organizations become, the greater the feedback signal loss and customer disconnect there is, resulting in varying levels of reduced customer satisfaction.  I also believe this is not necessarily the way it has to be.

Sustainable business excellence comes from restoring the customer feedback loops we squelch with the structures and systems created in order to effectively manage our organizations.   This is in contrast to the occasional efforts we make to “get in touch with our customers” through one-off surveys and voice of the customer (VOC) programs.  What we have to do is mend, or create, new feedback loops so they become continuous and ongoing; those feedback loops need to pass through all levels of the organization. 

Where does it start?  Obviously it starts with the people in the organization who touch the customer.  These could include sales staff, customer service reps, call center reps, service techs, even the company receptionist. Anyone who interacts with the customer on a regular basis needs to be trained on how to casually and unobtrusively gather feedback from the customer about value perceptions, preferences, applications, even suggestions for enhancement, improvement or other products or services. 

Customer complaints are another great source of feedback.  I’m amazed so few organizations capture and effectively use customer complaints.  I’ve never actually seen any hard data supporting the notion there are 10 unsatisfied non-complainers for every complaint a company receives.  However, I think we all can agree there is a vocal minority.  While we may not know exactly how many customers are suffering in relative silence, we know it is some factor.  We really need to pay attention to the complaints we receive, recognizing there is some number of customers feeling the same way and not speaking out. 

What can we do with the information once we get it?  There has never been a better time to answer this question.  Those people in the organization capturing customer feedback need to be enabled to easily transfer this information (feedback associated with specific products, services and processes) to a repository which is accessible and useable by everyone in the organization.  The best systems for that purpose today are wiki-like collaboration systems.  If your organization doesn’t have an enterprise wiki tool that can be used, there are plenty of free tools such as Wikidot (http://www.wikidot.com/), Zoho Wiki (http://wiki.zoho.com/) and Ning (www.ning.com) which is part social networking – part wiki.  Just getting the feedback in a useable form is half the battle.  The other half is getting people in the organization to be aware of it and use it for the benefit and delight of customers.  This is the full circle feedback loop.  It’s how humans and organizations learn, grow and adapt to our ever changing world.

Sustainability in process improvement and business excellence depends on restoring an effective customer feedback loop in our organizations.  I’m interested in your thoughts too, so please comment or email me (don.smith@ipapi.org).