Providing quality products and services is the key in any organization. For most, in professional services it’s often very hard to identify and track what real quality means to their clients, due to the lack of a tangible product of “service.” Some industries are even more complex, like financial services where there is an intimate mix of a service and product both must meet some level of quality to collectively drive a sustainable value to a client.
At this point in the discussion, we won’t focus much on “product”, but rather how can we make sure to identify the quality of a “service” and how it can both drive top line and bottom line results. What are the things that can impact the business and lastly how it’s all intimately connected as it relates to the ability to grow and compete in this digital economy?
Have you ever considered the business impact of low quality in a service environment? Well, studies indicate that defects (poor quality) are more expensive than you think, and account for as much as 25-30% of revenue lost. Maybe you’re saying it’s impossible, that number is too high or maybe that the number is subjective?
Subjective impacts are hard to measure:
- Potential negative impact of a bad reputation
- Reduction of growth potential due to lack of viable testimonials
- Lack of client or referral partner referrals due to lack of “promoters”
- The lack of secondary sales due to client’s unwillingness to go “all in”
It’s big business trying to help companies figure this stuff out, however (and whomever) you look at it these subjective measures are very hard to quantify. First, the measures are often multi-variable input, so even if you could identify all the inputs that would drive the outcome you would then have to figure out what percentage impact each item has and then apply solutions to each. Second, the data collection methods to get actionable ideas is also usually less than qualified to be considered scientific. Even if you could get good data, (it would likely be biased in some way, then even if you could identify the drivers) it would be hard to pin a target on any one item as a lever, that if fixed, would have enough impact to make a real difference.
So, rather than doing a big customer satisfaction study, you can first look to provide stability to the data points using concepts tied to the Harvard “Service Profit Chain” concepts. This is a far more objective way to assess items within the organization that are far more objectively measured and can have more than just a dotted line impact to top and bottom line business results.
Here is a comprehensive list of things that are worth assessing, not only due to the positive impact on your clients but also due to the positive impact it will have on your employees and the culture of the organization. By focusing here, you can actually get some huge wins, improve the value of your service delivery to clients, and also turn your organization into a great (better) place to work!
- The internal failures that drive costs:
- Work arounds to broken problems
- Quick fixes implemented by the team
- Mistakes made in delivering value
- Employee turnover rates
- Sorting or hunting for the right materials
- Downtime of equipment or people
- The external failures that drive costs:
- Customer complaints
- Penalties from regulators
- Liability suits
- Repair or replacement costs
- Time spent evaluating that drive costs:
- Time spent dealing with upset customers
- Checking materials or activities
- Verifying materials or processes
- Inspecting that drives costs:
- Paperwork or Process steps being completed
- Activities that were done outside of standards
- Auditing activities or communications manually
- Prevention efforts that drive costs
- Error proofing processes, that can’t be changed easily
- Capability studies of people and organization
- Procedure writing that can quickly get stale if not maintained
- Educational training
When you focus here first, these items drive major wins within the organization, which can not only take margin pressure away but also have additional values like improving the working environment for the team. As the “Service Profit Chain” method details, if you can improve the culture of the organization, the employees become more empowered and dedicated to being the best. As the organization continues to drive best in class experiences for clients the word will get out and that in fact will drive market share, revenues, as well as have a positive impact on costs.
The goal is to identify the sources of these issues, then fix them. Not only the defects (poor quality) but also the slowness of the processes which is something everyone should be working to resolve. Ultimately by doing this with the team, you get the greatest results because they not only will always be doing things the best way, they will also feel empowered and unafraid to come up with the next best way to be doing things tomorrow, the foundational element of continual improvement!
At Trutelic, Inc. our mission is to help our clients make certain they're able to sustainably stay focused on delivering value, with the least amount of waste possible. We achieve this outcome for clients by helping them clearly define the value and then subsequently develop the digital platform that focuses their time on value creating activities with the minimization of DOWNTIME. Our platform is driven by four key engines, the Trutelic iOP™, Recommended Day™, Trutelic Beacon™ (CMS), and the powerful Athena Business Cloud™. We offer business solutions within marketing, sales, service all supported by a Lean support, operations and supervisory hub. We have proven experience and expertise with professional service firms including financial services, accountants, and consulting firms who leverage our hybrid service model to break their organizations "out of the box!”. Learn more about Lean Digital Transformations on our website