Types of Clients

Let’s face it. There are clients and then there are clients. The great clients (or customers) are those that are ready, willing, and able to work with experts to achieve organizational efficiencies.

And then there are clients who fall short on anything from initial meeting to following through with an expert’s recommendations – these latter clients are wasting not only the expert’s time, but their own, as well.

As experts in our various fields of work, we have all run into a variety of clients. Here are some of the more common types – if you’re a client, maybe you see yourself in one or more of these descriptions: 

Bargainers. These clients want everything you’re proposing, but they can’t pay for it. Or maybe they’re doing the project “under the table,” and don’t want to ask the “real boss” to pay for it. Solution: If the client does not have the money for the full project scope, downgrade the scope – phase the project into manageable chunks.

Naysayers. These clients just can’t believe the project will take six months to complete. Certainly they can do it in a fraction of the time. Solution: Explain why the project will take as long as it will (perhaps a timeline depicting steps is helpful here); if the client does not believe you, suggest a mix of internal and external resources to complete the project faster. Client is still a non-believer? Walk away.

Stealth Implementers. They insist that no one else from their organization needs to be involved in the project. Just do it. Solution: Stress (and demonstrate with examples) how involving others in the organization will greatly enhance the success of this project as well as change management when implementation occurs. 

Self-Made Experts. These clients believe they can do exactly what you’re proposing without you, so why are you charging them so much? Why don’t you just tell them the steps that you would take and then leave them to it? Solution: Walk away.

Call 9-1-1. These clients think everything is an emergency. They need your proposal “yesterday” and the work is required within the next month. However, when you give them your proposal, you don’t hear from them for six weeks. Solution: Develop a project timetable and meet each deadline. Build in “slack” time for all steps involving client input.

Weekend Schmeekend. This is the client that sends you e-mail at all hours of the day and night. Weekends are for working. There is no such thing as work-life balance. Solution: Say no when appropriate. Just because the client works all hours does not mean everyone else needs to, as well!

Committee Monger. The client who believes everything needs to be decided by committee. The end result? Everything gets decided by committee, no one takes responsibility for decisions, and decisions take much longer. Solution: Ensure that there is one “point” person (typically a Project Champion) that will sign-off on all deliverables.

Wordsmithers. You know the ones that review your work and almost re-write the entire content? Solution: Set a time limit for review and stress that only key content requires review. Provide an example. Or hand out the report ahead of time and then convene as a group to review the feedback.

In the end, it’s up to the expert to determine whether they are able to work with the client. If the decision is to fire the client, provide them with the name of another expert – even if it is a competitor. You’ll be glad you did!

Value and Billable Hours

Why do companies and individuals still insist on billing for services “by the hour?” If you are tracking billable hours, you are not being efficient. And, even worse, you are not providing the best possible service to your customers.

When companies focus on billable hours, it may be to the exclusion of other important activities, like building capacity to better serve customers.  

However, this is a Catch-22 situation:  As you build capacity to better serve your customers, you are not able to bill for your time. Then when you use this new capacity to serve customers, you discover that it takes you less time to provide the same service. If you are billing by the hour and you are very efficient, you are unable to earn as much as someone who is less efficient providing the same service.

This is why billing based on the value of service being provided makes so much more sense. Why wouldn’t your customer want to pay you the same (or more) for a service that you can deliver in less time?  

According to Canadian statistics, the amount of time spent at work is decreasing. This is also the case in the United States. Does this mean that “billing-by-the-hour companies” are earning less? Perhaps, but it might be that these same companies are realizing that it is more economical (and profitable) to bill for value rather than hours. 

The secret to creating value for both parties (the company or person providing the service and the company or person receiving the service) is to focus on outcomes rather than inputs. How much time it takes to create a widget or develop a plan is irrelevant to the value the widget or plan provides to the customer.  

In Lean Six Sigma terms, we want to go beyond just meeting our customer’s needs and wants – we want to be sure our customer is delighted with the product or service they purchase from us. This is value. And it has nothing to do with money.

If customers are delighted with the service provided by your staff, they will pay your asking price to continue to receive this value. It is irrelevant to the delighted customer that it cost you $100 to produce the widget, but they pay you $1,000 for the same widget.

In addition, fixed fees (i.e., value-based fees) have the advantage of using up less administrative time for both sides. There is no need to track hours unless the provider of the service wishes to do so. This improves efficiency for both sides.

In the words of Alan Weiss, “No one cares, really, about how good you are. Clients care about how good they are going to be when you’re done with them.”  And that, really, is the ultimate goal of any service or product.

 

Out with the Old; In with the New

Here’s a surprising fact: Most of us have NO difficulty accepting change. And this is despite the fact that 80 percent of change initiatives fail first time out of the gate. What’s wrong with this picture, you ask? 

It appears that the difficulty in implementing change is not in accepting the idea. The difficulty is in the sustained practice or application of the idea (or improvement initiative). In other words, the problem with our reaction to change does not relate to our ability to let new ideas in. The problem is in getting our old ideas out.  

Either you believe the new initiative is the best way or you believe that your old way of doing the same thing is better. Believing in both simultaneously creates discord.  

You can’t have it both ways:  Discord leads to failed change initiatives. 

Successful organizations remove the discord and it is likely that they incorporate the practice of bio-psychology of change into their change projects. According to Sherry Campbell, Director of Management Consulting at Sierra Systems, there’s a difference between a rational approach to change management and a bio-psychological approach.  

It is only through the bio-psychological approach that change initiatives are successful. Here is how it works. 

  1. Communicate the vision. Before change can occur, people need to be aware of potential changes. Working in small groups and with key individuals will go a long way to ensuring that the idea for the change initiative is firmly planted and people are primed to listen.
  2. Identify the area for change. Have individuals focus on the change and relate their thoughts, feelings and experiences around their existing circumstances. In doing so, individuals are able to “see” that their existing circumstance is in need of change.
  3. Assessment and diagnosis. With existing circumstances described, have the individual talk about their conflicting behaviours, feelings, and thoughts that may get in the way of accepting the change. What coping patterns are they using in the existing circumstances?
  4. Plan the change. Once assessment and diagnosis is complete, ask the individual what behaviour they can do less of (e.g., coping behaviours), so that they have room for this new behaviour (new change initiative) in their brain map space. Discuss their feelings relating to letting go of the old behaviour.
  5. Implement the change. Through pilot projects or visualization steps, implement the change incrementally until you reach your goal. Repetition of incremental steps may be necessary until you reach success.
  6. Monitor the change, successes and risks. Use coaching to help individuals stay on track with their new behaviour; accepting the change, and inserting it as the behaviour of choice in their brain map space.

Conducting regular check-ins after implementing change will help identify areas for further improvement. Early detection helps with early correction of failures and continuing reinforcement of new behaviours. 

Value: Defined

Lots of people are talking about value these days – especially in light of Lean culture.

The Merriam-Webster dictionary provides eight definitions for “value.” The definitions relate to market price, luminosity, and denomination. From a business perspective, value is related to market price and the customer’s perception of a fair return on an exchange.

From a Lean perspective, value is anything that the customer is willing to pay for – as long as it meets these three criteria:

  1. The customer cares about it.
  2. The product or service must be physically transformed or the step toward transformation must be an essential prerequisite for another step.
  3. The product or service is delivered “right the first time.”

“Non-Lean” organizations sometimes have a tough time determining what it is that their customers’ value. But determining value is actually not that difficult. It comes down to ensuring that the above three criteria are met – all the time. Look at it this way:

  • An organization with efficient processes is able to keep its costs down. This results in a greater ability to attract more customers and translates to value for the customer.
  • An organization with inefficient processes incurs higher production costs. These costs get transferred to the customer. The customer does not see this as value.

Inefficiency can be a business killer. This is where Lean organizations have an edge over non-Lean organizations.

Lean cultures enable waste reduction in business processes that directly contribute to value for the customer. Lean cultures help businesses thrive.

If your customer values your product or services, they will pay your asking price. If your offering does not meet your customers’ criteria for value, the customer may still pay for it, but will definitely be shopping around next time they want the same thing.

Next time you complete a transaction with your customer, ask them to rate the value that they just received from you. Their response will tell you how well you are actually doing compared to how well you think you’re doing. Consider it a reality check.

Value is the key to organizational survival. If an organization consistently delivers poor value to its customers, it goes out of business. It’s that simple.

Kaizen to the Rescue

Successful organizational improvement initiatives depend on successful follow-up and maintenance. To this end, a very effective continuous improvement approach is Kaizen—“change for the best” or “good change.”

Kaizen is a Lean methodology that includes a set of activities applied continuously to all functions in an organization. What sets Kaizen apart from other improvement methodologies is that it involves all employees in the organization—from the CEO to the front line workers.

And it is easy to apply in any type of organization and to all processes within the organization.

Kaizen originates in Japanese businesses, but its influence since the Second World War is worldwide. The reason is simple: Kaizen humanizes the workplace by involving all employees to spot and eliminate waste in business processes. The process is transparent and inclusive of all those involved in the process: from suppliers to customers to employees to all other stakeholders.

The continuous improvement from Kaizen is a daily process of evaluating workflow and eliminating waste on the spot. In many organizations bogged down with policies, directives, and other “checking” mechanisms, workflow is slow and wasteful. But with Kaizen, eliminating waste directly targets these checking mechanisms to improve efficiency and productivity, enabling a faster workflow.

Another benefit of Kaizen is that usually only small improvements are delivered. Over time, these small improvements add up to big improvements because many (all) processes are involved throughout the organization. And this compound productivity improvement means huge savings in time and money for the organization—systematically replacing inefficient practices with customer value-adding practices is a win-win for all.

Kaizen replaces the command-and-control mid-twentieth Century models of improvement programs. Because changes to processes are carefully monitored by those who directly work in the process, Kaizen’s continuous improvement is sustainable. In addition, changes are typically done on a smaller scale, so it is easier to monitor and sustain improvements in the long term.

While Kaizen events are usually week-long blitzes of improvement and limited in scope, issues identified at one event are very useful in informing subsequent improvement events. This type of “paying it forward” approach of “plan-do-check-act” helps maintain a cycle of continuous improvement in all of the processes in the organization.

What is also interesting, but perhaps not surprising, Kaizen has evolved into personal development principles because of its simplicity. Check out Robert Maurer’s book on this topic: One Small Step Can Change Your Life: The Kaizen Way.

Motivating for Change

Conventional organizational change usually fails. That’s because you and your employees look at things differently.

In traditional organizations, employers expect employees to do what they are told (i.e., their jobs for which they are paid). Some leaders still believe that the way to motivate people to change is to tell them, or persuade them. This stems from an early age of having expectations imposed on us—first by our parents and teachers and later, by our employers.

But times have changed.

Organizations are now judged on how well they meet corporate responsibility, fair trade, sustainability, and triple bottom line (profit, people, and planet). And the judging is coming from all levels—customers, employees, and the public at large.

Because people have this new perspective on their world, imposing change on people will not work. Here’s why:

  • Individual needs are not the same as those of the organization.
  • Individuals lead busy lives (even outside of work), so they are not able or willing to assimilate change just because the organization says so.

Given these new paradigms, organizations that implement successful change are those that are able to align their aims with the total life needs of their employees—that’s why addressing WII-FM (“what’s in it for me?”) is so important. Leaders that know how to tap into each individual’s WII-FM will not only build an urgency and momentum for the change, but they will also make change stick.

To help you with your change initiative, consider these facts:

  1. People will never align with bad aims. Reassess and realign your organization’s vision and mission to ensure that it meets corporate responsibility, aims for sustainability of the environment, favours fair trade, and is opposed to exploitation and executive greed, to name a few.
  2. People cannot multi-task or learn new skills without some job realignment. Several things need to be considered, not the least of which are individual capacities for change (“absorptive capacity”). Consulting with employees to learn how they think change will impact their jobs helps to see change from both perspectives.
  3.  Ignoring the above facts is a sure guarantee of failed change initiatives.

Consider also that at least 75 percent of the organization’s leadership must buy-in to the change if it is to be successful. What this means for the organization’s change leader is that they must provide compelling evidence of the change to leaders first and staff second.

When at least 75 percent of the organization’s leadership supports the change, selling the change to staff becomes much easier. Then the potential for change to stick becomes a reality, rather than a hope…and as one of my friends astutely noted – “hope is never a strategy.”

Peak Performers: Not Always Good for Business

Are you a peak performer? According to organizational psychology, the five fundamental peak performance proficiencies are:

  • Awareness of self in all domains
  • Control of effort
  • Visualization
  • Cognitive skills
  • Self-programming

These proficiencies are common to all top achievers. However, a top achiever on a team when all other members are not top achievers may be counterproductive. Why? When one team member is working harder (or less hard) than other members, workflow is hindered. In their book, Learning to See, Mike Rother and John Shook illustrate this concept.

In this graphic, you can see that individual process steps, if not optimized to the system, can create an inefficient system. A system’s parts (or team members), if synchronized, enable the system to run smoothly. This means that no one piece of the system is running faster or slower than it should. What this means for service or manufacturing settings is that workflow needs to be balanced among all individuals if the organization is to function efficiently.

There is a prevalence of advice on managing underperforming employees, but an equivalent amount of literature is not available for managing over-performers. Perhaps this is because over-performance is not seen as a problem. But it can be a problem on teams, especially in a manufacturing setting, but it can also affect service.

I am not espousing that everyone should be an underperformer—far from it! But organizations can benefit if they ensure that their systems are free of waste (especially travel and motion waste), so that their employees can be as efficient as possible. By eliminating waste and creating flow, underperformers and over-performers can work together more productively, creating efficient workflow.

Performance psychology teaches us that workers want to succeed in an organization. By extension, these same workers want the organization to succeed. What is not clear is what motivates workers to want this success.

Regardless, organizations need to remember that their front-line workers are often the face (or voice) of the organization’s brand to the customer. Organizations that provide their workers with tools and systems that enable efficiency will help their workers want to continue to succeed. It’s that simple.

Customer Service

Organizations exist to serve customers. That’s obvious. What may not be as obvious is that organizations in turmoil often forget this fact.

When an organization’s focus shifts from serving their customers to serving their own needs instead, problems arise. For instance, if your staff is exerting great effort to try and get customers to follow the organization’s internal processes, this is a problem. Typically starting in one area of the organization, this problem can permeate like a mushroom cloud throughout the organization. The results can be disastrous.

Let’s face it. Customers don’t care about your organization’s internal processes. In fact, they don’t care about your processes at all. Customers want only the end product or the end service that they believe you can provide. How you deliver that to your customer is outside of the customer’s concerns.

But your customers do care if they get the run around from you. Sometimes they care enough to leave your organization altogether. This includes both internal (e.g., staff) and external (e.g., public) customers.

Here are some telltale signs that your organization is losing touch with its customers:

  • Customer queries are met with reasons or excuses about why something has or has not occurred.
  • Your staff points to the customer as the problem when the organization’s rules are circumvented.
  • There is a high staff turnover in your organization.
  • Staff on extended sick leave is a regular occurrence.
  • Work overwhelm is the norm.
  • Customer complaints are increasing.
  • You are losing customers.

Whether it’s from internal or external customers, treat customer complaints as an opportunity—an opportunity to improve both services/products and your relationship with your customer. Here are things to consider:

  1. Above all, acknowledge the customer’s complaint with an apology. Don’t give reasons (or excuses) for why things may have turned out the way they did.
  2. Provide options for rectifying the situation. Ask the customer if any of the options are satisfactory. If not, ask the customer to provide options.
  3. Immediately follow through on delivering the agreed-upon option.
  4. Check with the customer to ensure that the final delivery is satisfactory.
  5. Ask for customer feedback.
  6. Take customer feedback seriously. Implement changes in your organization to ensure that your focus is on the customer.

To this last point, if your internal processes are a regular hindrance to both you and your customer, it may be time for an overhaul. Instead of experiencing up to 98% waste in your practices, why not turn that wasted time, effort, and resources into superb customer service?

Be the customer! Look at your internal processes and ask yourself how you would change the process if you were the customer. You may be surprised at how much waste you might uncover in your processes in just a few short minutes or hours. It won’t take a lot of money (if any) to make small process changes for big customer satisfaction gains.

What Keeps Leaders Awake?

In a recent risk management survey by Aon Global Risk Consulting, organizations cited 50 concerns that are “keeping them awake at night.” The top three are: the economy, regulations, and competition.

While risk is something for which many organizations prepare; in today’s interconnected world, it is hard to only focus on individual organizational risk. This is because risks affecting one organization are not always isolated to that organization. Corporations (and countries) can no longer function as islands or enjoy immunity from risks affecting others. Look at the economy, for instance.

In 2009, the problems in the small country of Greece were not confined to its borders. It disrupted markets worldwide; its problems spilling to Ireland, Portugal, Spain, Italy, Cyprus, and others.

And even before the Greece crisis, the United States was dealing with its own economic woes in 2008—its mortgage issues were felt by many organizations around the country and around the globe.

On top of economic struggles and perhaps because of them, governments have taken on more power in terms of regulating both government and business. This includes not only the financial sector, but all industries. New and changing regulations are a risk for corporations—the need is to adapt processes quickly to ensure regulators are happy.

The third risk, competition, is forcing big players to innovate and differentiate to survive the competitive onslaught. While survival is the stopgap; thriving is the goal.

Do you remember the “Super Size Me” documentaries? They forced McDonald’s to offer healthier meal choices on its menu. It was a matter of brand reputation (which ranks number 4 on the list of 50 risks). As McDonald’s was dragged through the documentaries, other fast food chains took note and followed quickly to update their menus. None of them wanted to be linked with obesity and poor health.

While most risks can be managed efficiently by organizations that proactively practice continuous improvement, those that scramble to react to crises are doomed to fall further behind. Think about business interruption, for example.

Major and natural disasters may impact whole communities, but smaller disasters can also wreak havoc. And we rarely hear about the smaller disasters. What happens if your library’s basement gets flooded? Do you have a contingency plan to salvage your information? Have you practiced the plan? What about if your computer system crashes? How will this impact your business?

Business interruption, if it occurs, does not need to occur for prolonged periods of time if the organization is ready to deal with anything. Lean organizations that practice efficiency in all processes are more agile to address small or large disasters. Bloated organizations can never be as ready to handle the problems nor are they able to quickly recover from disasters.

To be highly efficient and effective, here are four considerations:

  1. Implement and maintain a continuous improvement strategy so that your organization is ready to handle any risk at any time.
  2. Ensure that organizational policies and procedures are current. Test them to make sure they make sense and that they will enable productivity, especially in the face of risk.
  3. Train and re-train all staff, so that they understand policies, procedures, and their individual roles and responsibilities in the organization.
  4. Develop an organization-wide culture that includes efficiency, effectiveness, and productivity. This starts with leaders championing the culture shift and then practicing the change. Lead by example.

Organizations that plan for the future by incorporating a continuous cycle of efficient and effective practices will thrive even when faced with adversity. Those that do not have a healthy risk management strategy may not survive.

Leaning for Success

Lean is a management philosophy aimed at reducing waste—a philosophy that, to be effective, must become “second nature” to the way we work. Lean’s roots can be traced to the early 1900’s, although the term was coined in the early 1990s. The following illustrates Lean’s evolution:

There are several elements to Lean, but four fundamental principles will help to kick-start a Lean initiative. They are:

  1. Takt time
  2. Standard work
  3. One-piece flow
  4. Pull systems

Here’s how each principle contributes to your organization’s Lean initiative.

Takt time (takt: German for “beat” or “measure,” refers to music) tells organizations how many products or services must be produced/delivered based on customer demand. The formula to calculate takt time is:

Takt time = time available / customer demand

This equation can be used for any frequency of time and customer demand; however, typically, daily amounts are used.

When you know how much time is available to meet customer demand, you know exactly how much time is required for each product or service. Knowing takt time allows you to not only see the waste, but it allows you to see the strategic opportunities as well.

For example, assume that one department employs three staff to process orders. You calculate that the department has 1,080 minutes of available time (i.e., three employees each available for 480 minutes per day). You also calculate that it takes 30 minutes to process each order and there are 25 orders each day.

Therefore, 30 minutes multiplied by 25 orders equals 750 minutes—but your staff is available for 1,080 minutes. The strategic opportunity is to determine what to do with the remaining 330 minutes. Do you reduce staff working hours, reallocate staff to another area, determine how to increase customer demand, etc.?

The next principle, standard work is about ensuring that all work done is based on written standards and procedures. This is necessary to ensure that anyone doing the job does it in exactly the same way (i.e., standard work). Having procedures in place to ensure standard work is the basis for all improvement in any organization.

The third principle, one-piece flow is a difficult concept for organizations. This is because most organizations “think” along traditional functional hierarchies. In a one-piece flow system, all services relating to the value stream are co-located in one department based on the logical sequence of work.

As an example, consider parking tickets. In the traditional organization, parking tickets are issued by one department (e.g., Streets and Transportation), payment is collected by another (e.g., Finance) and challenges or complaints about parking tickets are handled by yet another department (e.g., Bylaw Disputes).

In a one-piece flow system, all the work relating to parking tickets is handled in one place by people who work side-by-side, e.g., Parking Department. Therefore, instead of the parking ticket process taking months to complete, it can be completed within days.

The final key fundamental principle, pull systems are simple; however, they can be difficult to implement. In a pull system, products and services are provided to the customer when the customer calls for them. Therefore, the organization only starts to fill customer orders at the time they are ordered and not before—drawing on inventory as required.

In a traditional organization with a push system, products and services are completed based on anticipated customer demands. In this instance, inventory becomes a real problem, not only in terms of space utilization for inventory storage, but also the associated costs of carrying (and, perhaps, destroying) inventory.

As you implement Lean in your organization, keep in mind these fundamental principles and return to them when things go off-track. No matter the nature of your organization—private or public—treat all the work you do as a business and the principles of Lean will be much easier to apply.