Recently there was a discussion among various BPM experts about process, outcomes, and Deming [http://bpm.com/bpm-today/in-the-forum/is-it-still-true-we-should-work-on-our-process,-not-the-outcome-of-our-processes] that has me questioning the different ways business process professionals think currently about process improvement. My position in the discussion was that focusing on process and outcome simultaneously was necessary. Further, it was my contention that the statistical process control methodology Deming advocated assumed that customer satisfaction would always increase in parallel with improvements in quality.

General Motors discovered in the 80’s with the leather seats in its Cadillac line of automobiles that increases in quality do not necessarily equate to raised levels of customer satisfaction. This discovery led to conversations about rising customer expectations, especially during the 90’s.

Then somewhere in the early 21st century the conversation morphed to customer expectation management. Many managers and their organizations found that statistical process control was not particularly helpful regarding expectations management. Was it time to move beyond Shewhart’s methodology to a more modern approach?

Interestingly, another way of thinking about process improvement was gaining favor with professionals across the globe who were involved in the more pragmatic aspects of improving business processes. However, this way of thinking was about thirty years old. From the viewpoint of management practices, it was not new! Outside In thinking about business processes appeared to be a better fit for those people whose work it was to find better ways for managing customer expectations.

Today, and for the last couple of years, the conversation has involved topics such as “customer journey” and “customer experience.” Where does that leave business process professionals? How should we be thinking about process improvement? What should our focus be to ensure that our organizations have excellent business processes?

Thinking about process improvement

For those of you who missed the Corporate America love affair with Quality Circles, Total Quality Management, and Continual Process Improvement (CIP)  of the 80’s and 90’s, Deming is known for his statistical analysis (metrics focused) approach to improving processes in business operations. Deming helped numerous manufacturing companies, starting in the 40’s and continuing through the early 90’s, improve their processes through applying Shewhart’s statistical process control methodology. Shewhart and Deming’s raison d'être was increasing quality using metrics, incremental improvements, and decreased variation. The inherent assumption was that customer satisfaction increased as quality improved.

Another very important contributor to business process thinking is Jan Carlzon, who is best known for turning around Scandinavian Airlines by using an “outside in” (customer outcome focused) approach to processes and business operations.

Carlzon improved Scandinavian Airlines’ fortunes by putting the customer, and the customer’s perception, first. He considered every interaction between his organization and its customer as a “moment of truth.” He was also very clear that the response from the customer could be “Wow!” or “Meh” or “Yuck!” He went for “Wow!” to make the airline competitive again. Whether he realized it or not, Carlzon’s realization about  “moments of truth”  ultimately leads to discussions about customer journeys and experiential observations.

At first glance, it might appear that Deming and Carlzon’s approaches are inimical to each other. One approach originated with manufacturing organizations and the other’s focus is service organizations. However, they are quite complementary.  In addition, we can use these two different views of process improvement to think differently about:

• Metrics and how they are used in process improvement
• “Moments of truth” and how they relate to the customer’s journey and overall customer experience

Process measurement discussions have typically revolved around designing measures that give us better insight into employee performance as it relates to customer satisfaction. If the goal is to measure the quality of the customer experience, it follows that we want measures that give us insight into not only customer behavior, but those behaviors that are indicative of a stellar customer experience.

Conventional wisdom among professionals who use Outside In thinking for process improvement is: Fewer “moments of truth” in a process result in a better customer outcome. However, look at how IKEA has designed its customer journey, i.e. the process for entering and exiting its stores. Despite the numerous “moments of truth” in that journey, many people rave that the IKEA customer experience is indeed very special.

In the traditional approach to performance metrics there was a mantra that everyone knew “you get the behavior you measure.” To ensure representatives performed their tasks appropriately metrics were counter balanced, such as a “time on call” metric being balanced with “percentage of first call resolutions.”
Still all of the focus was on the representative and his performance with the assumption that if she did well on the established set of balanced metrics the customer would be satisfied. Now we have discovered that satisfaction and a quality customer experience are two vastly different concepts.

This difference is best expressed in a quotation by Maya Angelou, "...people won't remember what you said or did, they will remember how you made them feel.” When the focus shifts to how did our customer feel about his experience with our organization, the consideration about metrics moves from focusing on the representative’s performance to examining the quality of that experience through designing, and testing, metrics that will deliver insight about it.

If you design metrics with the goal of uncovering an optimal customer experience, the focus shifts from the company support site or call decision tree or representative to an overarching investigation of a customer’s journey and her perceptions of a good experience. The “moments of truth” become strategic touch points along the customer’s journey, the sum of which may result in a stellar customer experience, or not!
Let’s look at a simple customer support process as an example.

Each of the possible metrics in the diagram above requires testing, and probably some refining. Further, they may not be the best metrics for insight into the customer’s journey and experience. Customer experience metrics are, in many respects, a journey of their own.

Summary

As an organization begins to view its customers’ “moments of truth” as the strategic touch points of their journey toward a good quality experience, it begins its own voyage of blending statistical and Outside In thinking together. Each of these ways of thinking about process improvement is powerful.
Deming helped numerous global organizations — Toyota, Ford, Bank of Mexico — improve and deliver high quality goods and services using a statistical control methodology. Carlzon, using Outside In thinking, recreated Scandinavian Airlines into a formidable competitor. Other organizations, such as FedEx/Kinko’s and State Farm Insurance, have benefited substantially from applying Outside In thinking to their process improvement efforts.
When these two ways of thinking are integrated into an examination of a customer’s journey and experience with an organization’s goods or services, the enterprise:

• Changes its perception of metrics from an internal to an external focus, which
• Enables the organization to align its activities, operations, and performance  to provide a deeper organizational understanding of its customers’ experience

Statistical and Outside In thinking together build a solid foundation for developing, and refining, better process improvements and customer experiences than either can do alone. With this blended thinking an organization can construct a strategic and flexible framework of metrics that assures a quality customer experience.