Getting it Together: Integrating Customer Focus, Involvement, and Horizontal

Management
By: Jim Clemmer

Jim Clemmer is an international keynote speaker, workshop leader, author, and president of The CLEMMER
Group, a North American network of organization, team, and personal improvement consultants based in
Kitchener, Ontario, Canada. His other bestsellers include Firing on All Cylinders: The Service/Quality System for
High-Powered Corporate Performance, and his most recent book, Growing the Distance: Timeless Principles for
Personal, Career, and Family Success. His web site is http://www.clemmer.net/

If we don't change our direction we are likely to end up where we're headed.

In today's "Nanosecond Nineties", successful organizations are doing what was once considered
impossible. They are increasing customer satisfaction, shortening process cycles and response
times, reducing costs, and developing innovative new products and services -- all at the same
time.

Not long ago, organizations could succeed by excelling at one or two of these areas. But the
corporate landscape is now littered with the once mighty victims of this obsolete thinking.
Today's winners are capitalizing on the changes and challenges facing all organizations by being
better and faster and cheaper and newer then their less nimble competitors.

Pointed In The Wrong Direction

Transforming a traditional organization to one that's better, faster, cheaper, and newer is
extremely difficult. That's because organizations have built powerful cultures, systems, and
practices that are now pointed in the wrong direction. This misdirection can be found across
three key areas:
• Internally-Focused -- most decisions about products, services, and organization
direction are inside out. Product and service development specialists, technical experts,
managers, planners, and other professionals spend most of their time inside the
organization pushing products and services out to the market.
Too often the needs of the organization are put ahead of those people it's trying to "serve". As
John McDonnell, Chairman and CEO of McDonnell Douglas put it, "we did not always listen to
what the customer had to say before telling him what he wanted". This we-know-best approach
is now finding many long time leaders out of sync with their markets. The ratings (and revenues)
of many mighty corporations are plummeting. Their "loyal" (once treated as captive) customers
find products and services that better reflect their changing perceptions of value.
• Functionally Managed -- individual departments work to optimize their own internal
efficiency. Goals, objectives, measurements, and career paths move up and down within
the narrow, functional "chimney walls". Functional managers and their employees focus
on doing their own jobs or segment of the production, delivery, or support process.
Functionally managed organizations typically reduce service/quality levels while increasing
cycle times and costs by; 1) fostering an "us-versus-them" approach to communications and
fighting for organizational resources, 2) leaving unmanaged gaps between departments which
disrupt cross-functional work processes, 3) making improvements or changes in one department
which hurts the effectiveness of other departments in the process, and, 4) losing sight of
customer-supplier relationships and meeting everyone's needs.

Since the 1950s, Toyota has worked tirelessly to reduce the walls and gaps between department.
By the 1970s, their manufacturing methods became widely known throughout Japan as the
"Toyota Production Methods". In the early 1980s, their highly successful practices migrated to
North America as Just-In-Time manufacturing. Stressing the importance of managing across
organizational boundaries, a Toyota executive said, "It is not enough to manage the affairs within
your own division. One of the most important functions of a division manager is to improve
coordination between his own division and other divisions. It you cannot handle this task, please
go work for an American company".
• Management-Centered -- management's needs, goals, and perspectives are the starting
point for all activities. Managers and their staff professionals are the brains and
employees are the hands. Employees serve their managerial masters and do as they are
told. Broad business perspectives and strategies, operational performance data, problem
solving and decision making authority, and cross-functional skills are kept by
management.
But the world is now moving too fast to maintain this archaic "command and control" approach
that puts management at the center of the universe. Managers can no longer know enough, fast
enough, about enough things, enough of the time to anticipate enough of the changes that are
needed to improve the organization enough to become better and faster and cheaper and newer
enough.

Partial Improvement Patches and Pieces

Recognizing the urgent need to quickly reverse direction, many organizations are implementing
a variety of improvement programs and process. These include:
• Employee Involvement and Empowerment -- many training and motivational
programs, as well as structural changes aim to move daily problem solving, decision
making, customer satisfaction, and productivity improvement responsibilities closer to
the front lines.

• Teams -- a rapidly growing employee involvement trend uses departmental, problem

solving, cross-functional, project, process improvement, planning and coordinating, and
self-directed workteams in many combinations and configurations.

• Customer Service -- increasingly organizations are identifying key customer groups,

clarifying and ranking their expectations, working to realign the organization's systems
customer around those expectations, and training employees to deal with customers more
effectively.

• Process Improvement and Reengineering -- data-based tools and techniques,

flowcharting, and other "mapping" approaches improve processes at micro or
departmental levels. In other cases, processes are radically reengineered across vertical
departments at macro or strategic levels.
 • Training and Development -- many executives recognize the need for massive
improvements in skill levels throughout their organizations. This is leading to major
increases in technical, personal communications and effectiveness, team (leaders and
members), data-based tools and techniques, process improvement and management, and
coaching skill development.

• Technology -- investments in factory automation, information systems, voice and data

communication systems, inventory control systems, and so on are growing rapidly as
companies push for higher productivity, faster response times, and improved
service/quality.
Many of the above efforts are piecemeal or implemented in isolation. For example, training and
development, customer service, technology, and process reengineering are often implemented by
separate departments with little or no joint planning and coordination. As a result, products or
services are either better or faster or cheaper or newer, but rarely all four. That leads to a
weakened competitive position. And cynicism for subsequent change programs grows
throughout the organization.

Total Quality Management (TQM) is one management approach that can successfully integrate
all of the above improvement efforts. But very few organizations are implementing truly total
quality management. Most so-called TQM efforts are really PQM -- Partial Quality
Management. That's why many studies now show that 50-70 percent of what are called TQM
efforts are dying or dead. The good news is that 30-50 percent of TQM implementations (those
that are truly total) are dramatically increasing customer satisfaction, shortening process cycles
and response times, reducing costs and strengthening innovation. Although it's very tough to do,
it can clearly be done.

The Labels Rarely Describe The Contents

The TQM/PQM problem is hardly unique. Most labels describing a number of organization
change and improvement efforts have become meaningless. For example, when an executive
talks about building a team-based organization, he or she may mean instilling a "teaminess"
attitude. Or this might mean using temporary task forces to solve problems. Possibly the
executive envisions filling their organization with employee improvement teams (similar to
quality circles). Or he or she may want to develop self-directed workteams with no direct
supervision. Some times "Reengineering" describes layoffs or traditional "slash and burn" cost
cutting exercises. In other cases, reengineering means a change to the organization's structure.
Sometimes it means installing new information technology systems. Or reengineering could be a
radical revamping of the macro, strategic processes that establish how most work and customer
interactions flow across the organization.

Successful change and improvement initiatives are integrated or "whole" rather then partial and
piecemeal. They flow from the organization's basic reason for being, values, vision of the future,
and strategies. The effort is intertwined with the organization's operating goals, systems, and
measurements. These changes and improvements aren't programs bolted on the side of the
organization. These approaches are tightly intertwined and connected to management systems,
daily practices, and behavior.

As he continues a long string of successes in building "the new GE", CEO Jack Welch observed,
"The winners of the 90s will be those who can develop a culture that allows them to move faster,
communicate more clearly, and involve everyone in a focused effort to serve every more
demanding customers". At Multifoods, the international food processing giant (brands include
Robin Hood and Bicks), Human Resource vice president, Bob Maddocks finds that "the
improvement process isn't separate from good leadership and management practices". He adds,
"We want everyone involved in operating the company, focusing on customers, and improving
our processes and systems. It's got to become a way of life for all of us".

Whatever labels are used, a "wholistic" or systems approach to change and improvement means
reversing the inward focus, management-centredness, and vertical management found in most
organizations.

Reversing Direction

FROM TO
1. Internal Focus Customer Focus
Products and services are pushed Products and services are pulled
out to the market through the organization
Management and internal "Naive listening" keeps everyone
professionals "know best" tuned to changing needs
Performance measurements are top Rigorous measurements are based
down and aimed at maximizing on customers' perceptions of value
internal control
2. Functional Management Horizontal Management
Departments are narrowly Managers are accountable for
accountable for the results of their understanding and managing core
individual units strategic processes that flow across
departments
Departmental walls cause work and Customer needs drive the key work
customers to "fall between the processes that are managed across
cracks" departments
Management intuition and hunches Rigorous data and analysis help
drive decision making and resource clarify systemic cause-and-effect
allocation relationships
3. Management-Centeredness Total Involvement
Management's needs come first in Managers become "servant leaders"
a "command and control" hierarchy to a team-based organization
Employees serve management Employees serve internal and
external customers
Information is hoarded Information is widely shared
For most organizations, these are not minor course corrections. Each of these three key
areas demands changing direction by a full 180 degrees.

Besides changing direction in any one of these key areas individually, there is an ever more
pressing need to integrate all three as an organization-wide system. This can be either an area-by-
area evolution or a broad scale simultaneous implementation. For example, an organization
might start by focusing on customers, begin managing processes with basic teams, then move
toward shared leadership and self-directed teams. Or the change effort may begin by involving
employees through teams, focus on customers, and then move to incorporate process
management.

An executive at a US-based telecommunications equipment manufacturer illustrates how these

areas can evolve and merge, "We hit the cultural change wall because people didn't want to do
the behavioral stuff (skill building, dealing with conflict, changing habits and practices). People
didn't want to do that because it hurt too much. That got real ugly. So we said, 'we're not going to
do that behavioral stuff. Instead we're going to do process improvement work.' And, after beating
our heads against the process wall for a few months, some people found out that they're really
not separate and distinct. You can't do one without the other. And, oh by the way, the only way
that is going to work is to have teams. So, we're starting to break through the barrier of linking
all of those pieces that were originally perceived to be separate. We're really breaking through
the barrier and recognizing that this is all interconnected."

However the transformation is begun and whatever it's called, effective long-term change and
improvement efforts integrate all three of the key areas. Only through an integrated systems
approach to customer service, process management, and employee involvement can
organizations become industry leaders who are clearly better and faster and cheaper and newer
than their competitors.
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