Will focusing on customers bring profits, or will focusing on profits bring customers?

A company may have a Business Plan format for many departments. For example, the Customer Service Center and Operations both may have Business Plans for 2007.

Both plans are well written and explain the goals with associated strategies/tactics on what needs to be accomplished. What is not known is if the annual business plans were cascaded down to actionable plans with associated performance measures.

Many companies will often use the terms strategic plan and business plan interchangeably. The difference is noteworthy because one is considered short term and one long term. A business plan goes into detail for planning of the current year, and somewhat less detail for year two. It details the who, why, what, when, where and how the plan will achieve its objectives. It should also be a document with associated action plans that contains the results of trying to reach those objectives.

Strategic planning is planning for years 3 through 5 or longer. A strategic plan involves assessing the current business and industry it is in. It defines how the company wants to exist in that industry, this is most commonly known as the mission statement. It determines where the company will be in 3 to 5 years.

Perhaps we start with the attitude “how do we provide even higher value to our customers with lower cost.” We look at data from each city on how the needs of our major customers or customer segments are changing, on the markets for our current and potential products and services, on the industry as a whole. We need to also look at environmental factors such as changes in regulations, in technologies, in unions, in demographics. We look at our internal capabilities, such as trends in process improvements and quality, cycle time, promises kept and costs. In other words we need to take an honest and open-minded look at our capability to attract, secure and retain customers.

All this information is then integrated into an understanding of our current and potential markets (cities) and our ability to respond to and shape the evolution of these markets. This understanding identifies and defines our strategy. We then should develop strategic action plans to align these activities for implementation to these objectives. Financials support this activity by what these changes will do to revenue, costs, cash flow, and profits.

See my related post @ http://qualityg.blogspot.com/2007/08/is-customer-perception-reality.html

qualityg's LEADERSHIP CHARACTERISTICS

QUALITY LEADERSHIP CHARACTERISTICS

In order to remain competitive leaders must concentrate on the following characteristics:

* Make quality the driver of increased market and revenue growth and competitive leadership.

* Achieve complete customer preference by providing exceptional products and services whose quality is defined by the customer.

* Increase sales and revenue growth through quality prevention and error free work.

* Be creative in product and service leadership and concentrate on removing non- value added activities from customer affecting processes.

* Communicate and apply the importance of using quality tools to encourage worker involvement in continuous process improvement.

* Develop customer/supplier partnerships.

* Take leadership position in environmental and safety management.

* Emphasize that quality is defined by what the customer requires and not what the organization believes it is.

* Provide leadership by example with a combination of conviction, compassion and a commitment for continuous improvement with an emphasis on open, two way communications.

* Understand that long term growth demands increased customer preference for our products and services, cost reduction, employee satisfaction and a strong customer/supplier partnership program.

* Develop a deep commitment to acquiring profound knowledge in understanding systems, variation, learning and psychology.

* Establishing true team spirit in their organization by removing internal competition and replacing it with a focus on getting better results with their customers, employees and Quality.

* Good intentions are not enough, it takes good leadership in all levels of the organization to really change the culture.

* Creating a vision that others on the team will follow. Foster a team spirit and make sure everyone involved understands how teamwork, customer focus and good problem solving skills impact both front line and bottom line.

Click Diagram to Enlarge

Developed by qualityg

So what is the definition of a great leader?

"A great leader is one that never asks the question "What's in it for Me?" But, asks "What's in it for all those people who are around me that I am resonsible for."

Do you think our leaders today in industry, education and politics ask this question before they make decisions? Based on the amount of work going to other countries and the health of our education system I would say no, how they sleep at night? Easy, it all about ME!

See my post at http://qualityg.blogspot.com/2006/12/leadership-knowledge-management-people.html more on Leadership

Why are College Costs to High?

The Demise of American Management continues when it comes to Public University/College spending. Colleges continue to follow the losing business plans from the 1970s & 1980s.

So what does that mean? It means that Public Universities put the student last just like many companies did with their customers in the 70s & 80s and some still do that (different post).

The worst part of all this is College Officials and State Political Officials use the student as the bait to get more money to fund their fat departments. There is no accountability because that would take time and effort and the state has none of that!

Let me first relate a real event from within a business organization. A few years back I worked for one of the smaller telecommunications company we were very successful in getting orders through our processes in a very timely manner.

Over time we began to grow so fast that more people and sales orders were flooding our system and it could not keep up with demand. Along with the growth came additional hierarchical layers and costs that began to lower expectations of both customers and employees.

It was no longer easy to cut through layers of management, the new layers demanded to earn their pay so every order had to go through shop regardless if it should or not. Tracking the order and costs were now impossible since our system was not re-designed to handle growth and approval levels.

The finance people had no idea if we were cost effective it just kept raising prices to pay for the additional layers of management that invades an organization like Zebra Mussels are attacking the Great Lakes.

So how does this compare to the never-ending rise of college costs? It’s easily explained when you look at a college or university as a business. Today the business side of colleges comes first (making money) and education comes second. With making money and not knowing what to do with it except divvy it out to all your departments is the kiss of death. With more money comes the need (not really) for more people to handle more checking the checker processes and internal systems that do not communicate with one another.

I used to say that government, hospitals and universities were still living in the dark ages when it came to controlling cost and putting the customer first. Now it is just the institutions of higher learning and of course the state and federal government.

And, don’t give me the crap that you are trying to serve the needs of the students within your state, if you could you would only have out of state students and foreign students because you can charge a higher costs.

Now back to the business example (a made up small phone company that works within the grasps of AT&T). What follows is a reverse customer triangle. Just put student where it says customer and look how many layers it would take for information and work to get done if the triangle were right side-up.

When I showed this once at a meeting one of the departmental VP’s complained his processes were down at the bottom. That is correct “Stupid” you support the customer processes, it’s no longer the other way around, and guess what the cutting starts at the bottom of this hierarchy baby. Bonuses and Awards are given to the process workers who interface with the customer/student.




Click on Picture to Enlarge

The Purpose of Education - How about China? - Updated 7/10/07

The Purpose of Education (K-16) is to teach the mind to think so that life-long learning can continuously be obtained.

What is Life-Long Learning? I say it is the ability to seek/learn any new knowledge each day that adds to the well being of an individual and society.

Who, What, Where, When, Why and How are excellent questions to ask throughout one’s life-long knowledge experience. The 5 Ws and 1H are most critical to establish a solid learning foundation at the earliest stages (grades) of one’s educational career.

That is why I am so disappointed that State (i.e., MEAP) and Federal (i.e., NCLB) testing instruments concentrate only on the “What” and another ‘W’ not found above “Write.”

What is the answer to ____? (Too Many Facts)

Write the meaning of the story. (No Creativity)

There are to few Who’s, Where’s and When’s in Rote Learning (there is a place for it) and Testing and most importantly there hardly any Why’s and How’s. I can think of no other questions/statements as crucial that cause the brain to think as Why and How.

In other words asking “Why” something Is, Was or Will Be and by what Method (HOW) the theory or conclusion can be made are the vital elements to life-long learning and creativity.

An example; I had a Math Teacher who explained the reasons Why math was so important with analogies of practical application (How). Sure we had to memorize the basic tables but it was so much easier when it was explained where it fit in the purpose (aim).

The problem with Why and How are the difficulties the so-called educators in the Educational System have with testing, grading, labeling, ranking and rating students with regards to memorizing and comparing student to student and one school system to another. Frankly, they (Administrators) are taking the easy way out with ramifications (too many to mention here) that now are so integrated within or educational system they know of no other means than to keep adjusting (i.e., Tampering) the system with more testing and raking to prove their point of incompetence.

Other recent Educational posts by qualityg can be found at:

http://qualityg.blogspot.com/2007/06/us-supre-court-did-not-challenge.html

http://qualityg.blogspot.com/2006/11/quality-education-nclb-state-data.html

http://qualityg.blogspot.com/2007/06/merit-pay-for-teachers-in-minnesota-so.html

Updated 7/10/07 - How About China for an Example of Importance

How about a recent example on the importance of "Education" from a man who really knows - Mr. Tom Watkins

Please read article by Carol Cain of the Detroit Free Press @ http://www.freep.com/apps/pbcs.dll/article?AID=/20070710/COL24/707100314/1002/BUSINESS

For more qg posts on Education Click on the word Education at the LABEL at the end of any post.

Tampering and the Cost of Poor Quality

Tampering - What many Managers do becasue they do not understand Variation. Basically it is the unnecessary adjustments (decisions) made in an effort to compensate for common cause variation.

Common Cause Variation - Systemic Variation that is found in all processes (i.e., inputs, new conditions, etc...) that defines the amount of variation that is within every system. Very very difficult to identify one source to common cause variation (as opposed to special cause variation).

Special Cause Variation - Are specific factors that attack a system like a virus attacks a body, they can usually be tracked down to a single source and removed. The key is identifying data in a timely manner, removing and preventing this cause from happening again. Spacial Cause results in big spikes to a system or process and must be dealt with in a completely different manner than Common Cause Variation.

CLICK TO ENLARGE SLIDE COPQ/PONC (below)

Additional Information (Post) on Worker Variation can be found at http://qualityg.blogspot.com/2007/04/worker-variation-capability-in.html

Additional Information (Post) on Cost of Poor Quality can be found at http://qualityg.blogspot.com/2007/06/cost-of-poor-quality-example.html

Best Efforts and the Cost of Poor Quality

Tampering - What many Managers do becasue they do not understand Variation. Basically it is the unnecessary adjustments (decisions) made in an effort to compensate for common cause variation.

Common Cause Variation - Systemic Variation that is found in all processes (i.e., inputs, new conditions, etc...) that defines the amount of variation that is within every system. Very very difficult to identify one source to common cause variation (as opposed to special cause variation).

Special Cause Variation - Are specific factors that attack a system like a virus attacks a body, they can usually be tracked down to a single source and removed. The key is identifying data in a timely manner, removing and preventing this cause from happening again. Spacial Cause results in big spikes to a system or process and must be dealt with in a completely different manner than Common Cause Variation.

CLICK TO ENLARGE SLIDE COPQ/PONC (below)

Additional Information (Post) on Worker Variation can be found at http://qualityg.blogspot.com/2007/04/worker-variation-capability-in.html

Additional Information (Post) on Cost of Poor Quality can be found at http://qualityg.blogspot.com/2007/06/cost-of-poor-quality-example.html