Posted by Bill Dann

Challenges in today’s business environment often involve dealing with change. What isn’t widely known is that only about 33 percent of change initiatives are successful. This series of articles lays out the vital points of successful change implementation — points that I can vouch for after nearly 30 years of advising organizations of all sizes. This first article in the series is about the importance of customer data.

Putting Customer Data to Work

Remember, when you are undertaking fundamental change, you are bucking the odds. That is, consistent data from studies on change reveal that change initiatives fail two-thirds of the time. Our experience is that the underlying cause of this failure involves the human element: not getting people really on board; not making them comfortable.

The first stage in making your people comfortable in a new situation is to discard the ways things are being done today. That includes helping your employees give up their current ways of doing things. Helping them get ready for change. To accomplish this, you must demonstrate a compelling reason for the change.

This compelling reason can come in two flavors: 1) the fear that not changing will bring unacceptable consequences (for example, job loss, reduction in overall compensation or demotion) or, 2) excitement about a future that is bright enough that your employees put aside their anxiety and fear. An example of this might be the prospects of life being easier with new technology.

A part of our process-improvement methodology at PGS is a front-end assessment, which we call discovery. During discovery, we probe to find out if the organization or subgroup is ready to undertake change successfully.

In addition to interviewing key personnel about their awareness of the need for change, we determine whether or not there is compelling data that indicates the need for change. I’m referring to customer data.

Customer Data is a Powerful Motivator

It is perfectly normal for people to resist change, at first, especially when it involves the ways they do their work.

However, we have found one factor that is consistently successful in overcoming this resistance. That factor is customer feedback. While it is often hard to get employees to agree on the need for a change, they usually will agree that, if the customer is not satisfied, the company won’t be successful.

Even in government, where there is no operative marketplace, employees understand intuitively that if their department or program is not favored by users, they will have a tough time in the appropriations process.

It has worked 100 percent of the time. Sometimes it has to be presented more than once, but, if the data is compelling, the case is made for change.

What Constitutes Compelling Data?

Data about customer complaints won’t suffice. That measures only negative experience. Anecdotal, or internally-derived data won’t work either.

What does work is scientifically-gathered (random sampling) data, in sufficient numbers, clarity and meaning, to make the case.

When the data doesn’t exist and/or if our client’s employees don’t agree that there is a real need for change, we insist that the client invest in having us gather the data. Why? Because, without this data, we know that our other efforts will be unsuccessful. We will never be able to stop selling the need for change, and thus, the change won’t happen.

Other Ways to Use Customer Data

In addition to making the case for change, the data can clearly focus the design of the change process. It also answers the question: “Where do we need to make the change?” Once a design team is rolling toward that target, it will find other areas for improvement, but the team must be compelled to critically analyze the current process, and focus on a new performance standard that satisfies customers.

I am continually mystified that employees don’t seem to relate their own experiences, as consumers, with what they do in their work. For example, why doesn’t the healthcare industry understand the concept of, “Your pizza in 30 minutes, or it’s free?” (Domino’s Pizza) Why don’t other businesses understand that most consumers now expect a money-back guarantee?

We want to be treasured, as customers. But, somehow, we fail to see the need for treasuring customers when we’re at work. Customer feedback brings that home, in spades.

Internal Customer Data: Excellent, if Valid

If you are to benefit from internal customer data, you first have to be sure that you’ve created an environment in which your employees actually view one another as internal customers: that they, who are used to performing in functional “silos,” actually look at people in other departments and functions with the same respect and solicitation as they do external customers; that they understand what other employees need and want in order to provide external customers the products or services they want to buy. In other words, you have to have dealt with the silo effect. If you haven’t already done this, internal customer data will not be valid.

A Final Point

Customers love being asked their opinions, and they become loyal to companies that ask them for help in improving their business.

I am a frequent flyer on Alaska Airlines, and I’m loyal to the point that I will work to help them succeed in what is a very tough business. They make a practice of holding breakfast meetings of frequent flyers at hotels in cities they serve, and they ask these people for input. This strengthens my loyalty to them, brings me into their system, and makes me feel that I am contributing. Even more compelling was the call I got recently from the director of marketing, who asked me if I had any ideas on how they could improve the airline. I told him I wanted to think about it, and that I would email him. I sent him a bushel basketful, but he sent a very appreciative response.

It’s just sound business. If your customer data confirms that you are on the right path, celebrate success. If not, read the rest of the articles in this series and set about the business of improving the way you perform. Someone out there is already doing it, and there might be a target on your back that you can’t see.

Definitions:

Internal Customer: within a company, the recipient or recipients (individuals or departments) of materials, information, services and so forth, needed to perform their functions, from another individual or department in the same company. There is usually a chain of these internal-customer-supplier relationships in a company, which produces the product or service sold to external customers or end-users.

Silo Effect: lack of communication between or among different departments or work groups of an organization. Though frequently not intentional, the failure to communicate often results in duplication of work and the failure to meet both internal and external customer needs.

The rest of the story

To read the rest of the articles in this series on change click on any of the links below:

Change 2: The Importance of Selling the Big “Why”

Change 3: Define the Scope, Understand the Potential and Assess the Readiness

Change 4: Let Those Who Do the Work, Design the Work

Change 5: Make Sure Everybody Wins

Change 6: Secure and Maintain Stakeholder Support

Change 7: Keys to Innovation

Change 8: The Importance of Data on Existing Performance

Change 9: Clarify Problems Before Innovating

Change 10: Finding Breakthrough Strategies

Change 11: Grabbing the Low Hanging Fruit

Change 12: Sound Implementation Planning

Change 13: The Human Side of Change

Change 14: Management Support of Change