Searching for value? Focus on waste!
What do you value as a customer?
Many of us have been to a restaurant and had good and bad experiences. So what is it that pleases or upsets you as a customer when you go out for a meal? If you listed your likes and dislikes I’m sure it wouldn’t just be about the food.
If the experience has been positive, you’ll feel more inclined to leave a tip. So what is it that you value as a customer? Is it the price? Perhaps the availability of what you choose? Or is the quality of the food and service? Or are all three equally important to you?
“Knowing what your customers value will help you improve their experience”
If the restaurant knew what their customers value, could they improve the customer experience? What if they focus on consistently providing their customers with a happy experience? Besides very happy customers, the restaurant would be more likely to get repeat business, referrals, more profits and another tip on the table!
When delivering a meal, the restaurant follows a sequence of activities that shapes your experience as a customer. And everyone in the restaurant (Manager, Bar staff, Waiting Staff, Kitchen staff) involved in the process is responsible for the quality of your experience.
Just like a restaurant, businesses deliver their service through a sequence of activities to the customer.
Just like a restaurant, businesses deliver their service through a sequence of activities to the customer. This is called the value chain. Successful businesses focus their improvement drive on the value chain rather than individual departments. This is because the customer’s experience comes from the whole value chain, just as it does for a restaurant.
“Value lies at the heart of improvement. Anything that does not add value is wasteful and costly”
Value lies at the heart of improvement. Anything that does not add value is wasteful and costly. Customers won’t pay for the waste in the value chain. The fact is, these costs are being absorbed by the business.
Improvement is all about eliminating costly waste in the value chain to make value flow. So, when we eliminate waste we make value flow faster, cheaper and better through the value chain.
When you understand the value proposition as seen by your customers, you can focus on improving the quality, speed and costs of your offering through your value chain. Is the service you provide good enough to get you a tip?
There are many techniques for identifying and eliminating waste in the value chain. Have you asked the internal customers in your business for their list of likes and dislikes’ of the service you provide? You will be surprised how much knowledge they have of your value chain; after all they are working in it.
If you need any help finding the value in your business in or any other area of continuous improvement, contact us at CDI London.
Terry Johnson, CDI London