Your policy deployment should begin with objectives built around your customers’ voices. Those that you serve are those that can guide the way forward for your business, but are you paying attention to what they are saying? Here’s why breaking through your performance barriers starts with your customer's voice.
Written by: James Milsom, Head of Marketing
Breakthrough goals and the thinking associated with them is the process of identifying and bringing to life significant change in your business which is seen as valuable through the eyes of the customer.
It requires your business to stretch itself beyond its existing performance levels via critical thinking, cross-organizational collaboration, and management.
It means going beyond the existing budgets, targets and, ultimately, delivering on the promises to your internal and external customers.
Naturally, this is likely to be new territory for your business.
Entering unchartered grounds can bring anxieties and doubt over the course of direction, which is why systems such as the catchball technique are employed for full engagement in strategic planning processes.
However, by building an organizational culture that is centered around the customer, the Voice of the Customer no less, you can move towards hitting their expectations and delivering next-level performance.
Indeed, it will result in a 'big win' for your business.
This is what you need to know about the Voice of the Customer and the questions you must ask about whether you're truly listening to it with your policy deployment and breakthrough goals.
What is the Voice of the Customer?
Broadly, the Voice of the Customer (or VoC) is the means of gauging and recording a customer’s experiences, expectations, and wants from your business.
By understanding the opinions and desires of your customers you can place your organization in a position to systematically understand what is needed to drive breakthrough change in your products and services.
If you consider that your organization creates products and solutions to serve the needs of the market, the Voice of the Customer is the purest way of realizing what it is that your customers want.
It is a mechanism to galvanize your entire business around serving the greatest customer experience possible and is the foundation for achieving next-level performance.
That value can be looked at in four dimensions, according to Forrester:
|Value through a product / service is interpreted as|
|Economic||Money gained or spent|
|Functional||Objectives are achieved with effort or made difficult|
|Experiential||Interactions are pleasant or unpleasant|
|Symbolic||Meaning is created or destroyed in relation to myself or others|
In regard to Strategy Execution Management, it is crucial to identify the drivers of this value and to find an appropriate way to collate the voices and translate these into aligned breakthrough objectives.
Why is it important?
Customers are demanding more. We are in the era of over-indulgence, perhaps, and that means you must either play the game or change the rules.
"You must aim above the target to hit the target."
In any case, you still must listen to your customers' voices. Your competitors aren't standing still, so you must complete a true paradigm shift in your organization.
You must ensure an appropriate strategy for measuring your customer’s voice, and consider pre and post-purchase evaluation of their sentiments.
With this knowledge secured, you will enjoy significant benefits, including:
- Customer insights into your products and journey can fuel well-targeted decision making and objective setting for your strategic policy
- Pin-point sentiment at each stage of the buying and customer journey
- Identify routes to innovation for your business
- A clear picture of how customer experience influences churn rate, renewals, and market share.
“Companies that excel at customer experience grow revenues 4-8% above their competition”
How does the Voice of the Customer drive your strategic plan?
The Voice of the Customer helps to shape your definition of breakthrough goals for your policy.
While there is always the allure of setting hundreds of goals to illustrate success through volume, the Voice of the Customer restrains your logic, shifting it to think of breakthrough goals through the lens of your customer.
What value can be found in defining a strategic plan which only serves to improve the metrics and resulting value only seen internally? Very little.
It is the Voice of the Customer that drives your strategic planning and deployment.
The strategic plan then drives your Hoshin breakthrough initiatives.
Three-year horizons in policy deployment
The Voice of the Customer can be channeled through four categories of goals:
The four categories help you to consider how you can set breakthroughs which:
- Improve the quality of the customer’s life or enjoyment of the product
- Improve how quickly the customer can access the product and find value from it
- Improve the cost or value of the product by reducing the item’s cost or adding ancillary benefits/items
- Drive innovation by using customer signals to inform the direction of the product road map.
Hoshin breakthrough initiatives see you deliver world-class performance in Quality, Delivery, Cost, and Innovation, and should be thought of in a 3-year horizon.
For example, innovation may not be the correct breakthrough initiative for your organization because you're simply not close enough to your market in year one to be able to develop a product to serve the latent needs of your customers.
Instead, year one may be where you look at improving the quality of your products to drive up customer consumption and then put into place an initiative to collate feedback and measure satisfaction.
Year two would see a conscious effort to improve the delivery of the product based on the customer's voice in the second year.
By the third year, you may choose to innovate or make your products cheaper or have more value with ancillary services.
With this 3-year horizon view, you can incorporate breakthrough initiatives into your policy that map to your customer’s voice and deliver true value to them.
4 questions to ask about your customer's voice
Now that the Voice of the Customer has entered your critical thinking process with absolute clarity (step one of the seven steps of policy deployment), consider these four questions around your usage of the voice of the customer.
1) Are you measuring yourself the way customers measure you?
Consider if the way you consider success is through the customer’s eyes – this will give you an indication of the role the customer has played in your business thus far.
Ask yourself if your measurement:
- Is data-driven
- Is regular. Do you consider the cost to serve and the quality of service?
- Leads to actions or countermeasures to correct underperformance.
- Is done by identifying red traffic lights of performance (e.g. with a Bowling Chart) based around QDCI.
2) Are you hitting their expectations?
Next, consider what the customer expects from your organization:
- Do you know what they expect?
- Do you review yourself based on those expectations?
- Are you thinking of how to maximize their growth with you and setting objectives to support this?
3) Does your business policy, strategy, and objectives bring value to the customer?
Embedding the Voice of the Customer into your business must begin with your business policy, and then flow into your resulting strategy and objectives.
With that in mind, look at the quality of your existing performance and what you want to achieve.
Ask yourself, is it:
- Best in class
- Current state
4) Grade your performance and its value in the customers’ eyes.
Take your performance levels across the business, grade their performance, and then ask which are the critical few objectives that can drive the most growth (similar to Pareto's 20% of your customers bring 80% of your value thinking).
With these questions firmly in mind, your organization can look towards defining breakthrough goals that truly place the customer at the heart of what you seek to achieve.
10 items to check off to ensure your breakthrough goals are with the customer in mind
In our ‘Strat to Action: Defining Breakthrough Goals’ webinar we share 45 years’ worth of policy deployment experience from Kaizen Institute’s own Charlie Sharman.
In the webinar Charlie shares a quick 10 item checklist for you to review your breakthrough goals based on the Voice of the Customer:
1) Are daily management systems in place to allow us to improve?
2) Is it a stretch goal?
3) Is it measurable?
4) Is it linked to the Voice of the Customer?
5) Will it provide a significant competitive advantage?
6) Does it require multi-functional involvement?
7) Will it result in a new standard and/or system?
8) Is the answer to 'how do I do it?' unknown?
9) Have you checked that no problems exist in the other areas that need to be fixed first?
10) When we accomplish the breakthrough objectives, does the customer benefit?
By completing this ten-point list, your organization will be well placed to review its list of breakthrough objectives against the clear imperative to consider and heed your customer’s voice.
Your customers' voices must be heard
Indeed, the cost to acquire new customers outweighs that of your retentions, but when we look beyond the surface we arrive at a conclusion.
Without considering and basing your policy’s breakthroughs around what your existing customers want today, there may very well be no customers to base it on in the future.
The time to listen and break through your performance barriers is now. The key? Voices all too familiar to your business.
What will your next steps be in Strategy Execution Management?
With the stage set, we have a world of resources available for you to consume on all things Strategy Execution Management, including a comprehensive guide to Hoshin Kanri, as well as these:
- Strat to Action – Developing a countermeasure culture: Watch our on-demand presentation of how you can guide your business towards using data and countermeasures to drive strategic success.
- How AI and machine-assisted learning will help your Strategy Execution: As Artificial Intelligence becomes a mainstay in our lives, read how AI and machine-assisted learning will evolve to support your Strategy Execution.
- Download our Key to Strategy Execution eBook: Read how companies like Danaher and HP have mastered Strategy Execution Management and what you can learn from them.
About the author
James Milsom is Head of Marketing at i-nexus. James has wide-ranging experience in markets such as telecommunications, energy, education, and software.
As Head of Marketing, his drive is to raise awareness and understanding of the challenges facing enterprises in delivering strategic objectives and transformation amidst changing markets and the obstacles traditional tools and methods present leaders.
If you’d like to talk more about Strategy Execution, reach out to James on firstname.lastname@example.org or connect with him on LinkedIn for the latest insights.