Customer Focus and Quality Organization
Customer Focus and Quality Organization
Quality organizations are those which recognize the importance of the customers. The prime objective of a quality organization is to focus on the customers. In these organizations quality normally begins and ends with customers. In these organizations, all the employees are one another’s customers and suppliers, who are linked in a chain which extends from within the organization to the external supplier and the external customer. The characteristics of the quality organization are (i) reliability which means delivering on promises, (ii) responsiveness which means willing to help or support, (iii) assurance which means inspiring trust and confidence, (iv) empathy which means treating customers as individuals, and (v) tangible which means representation of the services physically.
With increase in the competitive pressure in the present day environment, many organizations focus on the short term operational goals which can include cutting of cost, boosting the asset utilization, and gaining access to cheaper capacity. This approach is necessary to some extent but insufficient in meeting organizational goal and objectives in the long run. As the competition intensifies, the management of the quality organization is to think both operationally and strategically such as honing of the present performance and seeking opportunity of growth. The best way to uncover opportunities for these actions are to make the organization, a truly customer focused organization.
In 1954, Peter Drucker stated that ‘it is the customer who determines what a business is’. Since that time, customer perspective has become a vital concept for the organizations, and since 1980s organizations are passing through a period of customer focus. The concept of customer focus means the meeting of the needs and expectations of the present and the potential customers by developing a comprehensive understanding of the customer needs and then delivering perceived value to the customers. The expected outcomes of a customer focus strategy are creating values for the customers which lead to the loyal customers that in turn lead to the improved organizational performance.
Creating value cannot be done by looking inward. It is not enough to simply deliver a product, no matter how well engineered the product is. It is not even enough to deliver a unique product. It is necessary to think about what task the product is being used to accomplish and how that task is to be accomplished better. That way the organization’s offering is to be made distinctive where it really matters in creating value for the customer. This is the crux of the shift which the quality organization is required to make. Instead of just concentrating more on the customer, the quality organization is required to change in significant, often in a structured way, so that the customer becomes the centre of everything the organization do. The customer focus makes the quality organization customer centric.
The practice of customer focus has been identified as pivotal for the organization seeking to reach a level of sustainable performance. Sustainable performance refers to an expectation which the organization is able to react rapidly and efficiently when faced with emerging customer-related issues, including a desire for changes within the operations being performed. This is an important factor, given the dynamic nature of customer expectations. Thus, in order to implement the practice of customer focus successfully, the organization is to draw extensively on customer data which typically provides information that enable employees to engage more fully to address the customer-related issues.
The organization with the objective of the customer focus makes customers and their needs a primary focus of the actions by developing and sustaining productive customer relationships. Such organization (i) seeks to understand the customers by actively pursuing information to understand customers’ circumstances, problems, expectations, and needs, (ii) educates the customers by sharing the information with customers to build their understanding of issues and capabilities, (iii) build collaborative relationships with customers by having rapport and cooperative relationships with the customers, (iv) take actions to meet customer needs and concerns by taking up the plans which affect customers, by responding quickly to meet customer needs and resolving the problems, and avoiding over commitments, ad (v) set up customer feedback systems by implementing effective ways to monitor and evaluate customer concerns, issues, and satisfaction and anticipate the customer needs.
The hierarchy of customer requirements (Fig 1) constitutes (i) core needs, (ii) added values and (iii) delight. The core needs for customer satisfaction consists of product quality and consistency and on time delivery at competitive price. The added values features are technical support, and access to plant production and quality personnel in addition to the marketing executives. Delight includes such factors as statistical process control and product quality improvements etc.
Fig 1 Hierarchy of customer requirements
In the present day environment, customer focus is not only for the marketing personnel, but it is also a core element of the design, production, quality control, and service personnel and it begins with discovering the ‘voice of the customer’. Service quality to the customer, from the ‘customer focus point of view’ is expectation based. Customers compare the perceived result to the expected service and determine their satisfaction with the service quality. If the perceived service is equal to or higher than expected, then the customer is satisfied, and can say that the organization has quality service. If the perceived result is less than expected, there is no service quality and the customer is dissatisfied. There are several gap problems which can occur between customer expectations and needs and the quality of the service or product which the organization delivers. The quality organization eliminates or reduces the gap between consumers’ needs and expectations and the quality of service delivered, and hence improves its service quality, reputation, and profits. These gaps are described below.
The first gap consists of what customers expect and what the organization thinks they expect. This gap results due to the lack of information flowing from the customers through the marketing personnel upto the organizational management. It is essential to locate where the problem lies and the organization is to work to fix it in order to stay upto date with the present customer expectations.
The second gap is between the organization’s understanding of customer expectations and the development of customer driven service standards. This can lead to inappropriate product and service design, a belief that customer expectations are exaggerated, or a lack of appropriate process management. Organization is to learn to make the appropriate commitment to design product and services which match customer expectations or risk losing that customer segment to other organization which meets the customer expectations.
The third gap is between the product service standards and the service actually provided. This can be due to a temporary shortage of resources, a failure to match supply and demand, lack of training, or poor employee motivation. Organizational management is required to make every effort to train appropriately the employees, make sure the appropriate resources are available and to ensure that customers know the role of the employees in the service.
The fourth gap is between the promises made to the customer and the actual delivery made. This is normally caused by overpromising, or by a lack of communication. Organization management is required to integrate the marketing communications and to avoid overpromising.
Normally, in an organization only a small percentage of employees are in direct contact with the external suppliers and external customers. However, all the employees depend on the other employees for carrying out their jobs. Hence every employee is a supplier to the employee who depends on him for the input and is a customer to the employee who supplies him with his output. In this way all the employees depend on other employees for the products or services they need to carry out their jobs. This simple customer-supplier chain structure support various work processes in the organization and represents natural flow of work across functions and between employees within the organization. In fact, work of an employee can be seen as a process in which as a customer receives inputs (e.g. machine parts, data etc.) from his supplier employee, add value (e.g. assembly, data processing etc.) to the inputs and then pass output (e.g. assembled part, processed data etc.) to his customer employee. Hence the prime concern of each employee is to be the meeting of the requirements of his immediate customer. This customer-supplier chain extends from within the organization to the external supplier and the external customer as shown in Fig 2.
Fig 1 Customer Supplier chain
Type of alignments
It is necessary that there does not exist any conflict of interest between the organization’s interest and the customer’s interest. The alignment between the internal customer and the internal supplier is the matching of the capabilities of the supplier with the needs of the customer. In a quality organization, customers and suppliers work together as collaborators instead of adversaries to achieve the alignment. This collaboration also helps in promoting the overall goal and objectives of the organization. When the alignment is achieved then customer satisfaction becomes a shared goal of both the supplier and the customer. To help in the achievement of the alignment, internal customers are to make their needs known to the supplier. The goal of this alignment is to support the mission of the overall organization.
Conceptually, alignment has three variables namely (i) customer needs, (ii) supplier capabilities, and (iii) organizational goals consisting of its vision, mission, values and strategies. Alignment of these three variables is known as three-way alignment which means matching of the supplier capabilities with customer needs to reach the goal and objectives of the organization. There can be four types of alignments (Fig 3) namely (i) ideal alignment, (ii) two-way alignment, (iii) alignment with performance gap, and (iv) alignment with opportunity gap. These four types of the alignments are explained below.
Ideal alignment – In this type of alignment the supplier capability, customer needs and organizational goals are fully aligned. A quality organization normally has this type of alignment.
Two-way alignment – In the two-way alignment, there is misalignment with the organizational goal and objectives. The internal supplier meets the customer needs in a way which does not support the goal and objectives of the organization. In a quality organization, the alignment process is monitored carefully amongst the employees to avert the situations in which customer-supplier alignment does not promote the organization goal and objectives.
Alignment with performance gap – Sometimes, supplier capabilities lag behind customer requirements. That is, while the customer’s needs are in line with the organizational goal and objectives, the supplier lacks the capabilities to meet them. This results into a performance gap. This situation requires rework to prevent customer’s dissatisfaction. In such situation, the supplier is to improve its capabilities for meeting the customers need. The customer is also to provide a clear and complete feed back to help the supplier close this gap.
Alignment with opportunity gap – A gap can also occur when supplier capabilities exceed customer requirements. If the internal suppliers are giving more than what their customer needs then there is a waste of effort from the supplier’s side. This is called the opportunity gap. This shows that additional investment is needed at customer end to utilize additional capabilities available at the supplier side.
Fig 2 Types of alignment
For a proper alignment of supplier capability with customer needs which meets the organizational goal and objectives, it is necessary that a customer supplier partnership is developed. The supplier and customer are required to meet to discuss the issues related to the product/service, working relationship, integrity, delivery, and the cost. The internal suppliers are to have complete clarity of their customer’s needs and expectation. It is not possible to have alignment with the organization goal and objective without a proper understanding between the customer and the supplier.
In order to ensure that the internal customers’ requirements are objectively being constantly met by their internal suppliers, it is necessary to carry out various measurements with respect to process, output or product, and product performance at the customer end. Process measures help taking the corrective measures in time before it goes out of control for output to meet the customer needs. Further, even if the customers’ requirements are being met presently by the internal suppliers, it is still important to stay in touch with the product performance at the customer end since customer requirement can change with time. Impartial and unbiased measurements lead to ideal alignment situation in the organization.