IT & Operations

The customer considers good to be good enough

February 1, 2016
restaurant

In the context of the provision of services, customer loyalty is in the first place activated by meeting the customer's expectations and not – as formerly assumed – by exceeding them. This is shown by research carried out by Dixon et al. (2010). That means that the management and implementation of the organization's core activities must predominate for attention and decision-making: ensure that you master the basics to the last detail. In other words, operational excellence.

Wastage

Prof. Dr. Ir. Marcel van Assen is a teacher in the Operational Excellence masterclass. He defines operational excellence as a method or an approach, focused on the development and management of a service provision system or production system that delivers exactly what the customer wants, at the lowest possible cost.

This contains a paradox: the internal organization strives for perfection to give the customer exactly what he/she expects of the services, nothing less and nothing more. Good is good enough and therefore time and money spent on exceeding customers' expectations are wasted. And that is the essence of operational excellence: eliminating activities that do not add value.

Precisely for that reason disciplines such as marketing, customer research and even psychology make a major contribution to the pursuit of operational excellence: Only by knowing and understanding the customer's expectations can an organization define where the value-added services end and wastage begins.

Measurement and optimization

Van Assen's definition implies that operational excellence is not (only) an end in itself, but is also based on an underlying methodology. To realize an operationally excellent organization, it evaluates, standardizes, and optimizes its processes according to the GP PCOI method: Goal, Product, Primary process, Control, Organization & Information).In addition, it starts with formulating the end goal: what must our service or product achieve to meet the expectations? It then gradually optimizes the other elements to achieve and secure that goal. Here, optimization does not necessarily mean the best score in efficiency. Alignment with, and support of the other elements, prevail. Again, we notice an apparent management paradox here.

Realizing the desired alignment is no reason to sit back. Operational excellence requires a culture of continuous improvement: a culture in which everyone works using standardized methods for continuous improvement and speaks the same "improvement language" to continually shorten turnaround times and to eliminate wastage. Good is good enough for the customer but never for the organization.

Would you like to learn more about operational excellence in services? Marcel van Assen will inform you about this in just over 30 minutes in the TIAS webinar "How do you measure professionalism of Operational Excellence?"(in Dutch)

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