Gaining and Using Six Sigma Intelligence

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By Bryan Carey

The ultimate reason for spending valuable time, money and human resources on a Six Sigma initiative is this: the customer. Establishing a culture of continuous process improvement helps companies earn customer satisfaction and loyalty.

Because of this customer focus, Six Sigma initiatives require broad access to a wide range of metrics that deal with both the customer and the processes that align to create the customer’s desired experience or product. This includes using inputs of voice-of-the-customer research and outputs of actionable data, such as a net promoter score, to collect and understand the critical-to-quality factors. Integrating these inputs and outputs yields Six Sigma “intelligence” – the information that helps practitioners pick projects more effectively, achieve results faster and reach long-term success.

Listening for the Voice of the Customer

Finding this Six Sigma intelligence can be difficult. Just as businesses have a hard time articulating their processes to their customers, customers often do not know, or cannot communicate effectively, their actual needs and requirements.

A starting point for gathering this information is through voice-of-the-customer (VOC) research. These are studies, typically resulting in both qualitative and quantitative data, that detail customers’ wants and needs. This data is presented in a hierarchical structure and prioritized in terms of relative importance and customers’ satisfaction with current alternatives. Often it is compiled in a complaint log or database.

There are a number of ways VOC data is traditionally collected:

• Customer asset metrics: Leveraging existing corporate customer-behavior data (i.e., when customers enter the organization and for what purpose)
• Complaint catcher: Collecting actionable real-time data points from customer feedback
• Survey questions: Using questions to gain customers' thoughts and opinions
• Operational metrics: Listening to the operational management of the organization
• Formal research results: Using focus groups to validate what is already being done to listen, respond to and manage customer complaints

Although the concept of VOC may seem straightforward, it is actually quite complex. Surveys, focus groups and interview processes are not easy to set up in a manner that gathers unbiased data. People often give the answer that they believe the interviewer wants to hear – as opposed to their actual opinions. This leads to biased results that may not correlate with the customer's actual satisfaction.

Finding Actionable Data

The value of data collected through VOC is directly related to a company’s ability to use it to take actions that improve the customer experiences. Therefore, it is not data abundance that is important so much as its alignment with managers’ daily business decisions.

Although typical VOC methods, such as surveys and focus groups, provide helpful information about customers, collecting a net promoter score (NPS) can be a valuable addition. An NPS is different than other VOC methods because it is actionable in the following ways:

• It provides a continuous feedback loop and acts as a diagnostic tool.
• It is simple and easy to understand, a proven tie to activity.
• It’s a short, customer-friendly survey, which leads to greater participation.
• It can be used to closely monitor the competition.
• It incorporates valuable customer satisfaction data for a more complete picture.
• It’s a forward-looking metric.
• It enables an organization to dig into the “why” question – why some customers are satisfied and others are not.

Companies obtain their NPS by asking customers a single question – "How likely is it that you would recommend us to a friend or colleague?" Based on their responses to this question, customers are categorized into one of three groups: promoters, passives or detractors. In the net promoter framework, promoters are viewed as valuable assets who drive profitable growth because of their repeat or increased purchases, longevity, and referrals. Detractors are seen as liabilities who destroy profitable growth because of their complaints, reduced purchases or defection, and negative word of mouth.

An organization calculates its NPS by subtracting its percentage of detractors from its percentage of promoters. Among its other benefits, the NPS can be used to motivate an organization to become more focused on improving products and services for customers. When compared to other organizations’ scores, it also can be used as a correlation to revenue growth among the organizations.
– it measures the future, not the present or past.

Leveraging Six Sigma Intelligence

After practitioners have gathered actionable data – the Six Sigma intelligence – from VOC methods, the next step is leveraging that intelligence to develop key process and attitudinal indicators. This involves driving out the things that are important for the organization to be doing from a customer perspective and using them to determine what changes should be made to the current processes. This approach includes:

• Analyzing major functions and processes across the organization, completing an end-to-end view of the customer’s experience
• Assessing organizational alignment of all functions
• Evaluating sites, technology, metrics, project management and employees
• Working with the customer-service division of the organization to document its current state and to design its target state
• Conducting facilitated documentation and analysis sessions with Six Sigma associates
• Conducting design sessions with stakeholders and process owners
• Socializing interim and target design recommendations with representatives from all customer-services areas

This approach allows practitioners to measure success in terms of key process indicators (KPIs), which help show how effective processes are in support of the customer experience. Additionally, by utilizing the NPS, practitioners are able to measure key attitude indicators (KAIs), which provide forward-looking opportunities to influence customer attitudes before they turn into behaviors. With Six Sigma intelligence, companies can quickly learn about customers’ attitudinal changes and measure attitude on a continual, event-driven basis. For instance, if complaint calls escalate, there are steps to manage the issue:

1. Track complaint calls through resolution
2. Document complaint issues thoroughly to understand the “why”
3. Mine customer service notes and customer emails for future use

Signs of Success

Members of an organization have successfully leveraged Six Sigma intelligence when:

• They know the flow of customers in and out of the business, their value, and why they stay or go
• They are actively tracking, managing and resolving the top complaints
• They have attached compensation, metrics and accountability to the resolution of the top complaints
• They prioritize their budgets and projects to fix the major issues
• They use customer feedback to inform their planning, projects and what they deliver
• They know which customers would recommend them and which would not and why
• They use the customer feedback in an immediate and closed-loop way to coach the front line
• They drive a set of process and operational metrics to improve the customer experience
• They attach compensation, metrics and accountability to the management and success of increasing customer loyalty
• They celebrate success and reinforce customer centricity through continued VOC research

About the Author: Bryan Carey is senior vice president of strategic consulting for Conversion Services International (CSI) and managing director of DeLeeuw Associates, a division of CSI. He also is the leader of the company's Lean Six Sigma practice. He has more than 20 years of experience as an executive in project and change management in the banking industry. At NationsBank/Bank of America, he had senior leadership roles in some of the largest mergers and change initiatives in the history of the financial services industry. Mr. Carey is a certified Six Sigma Green Belt and a trained Six Sigma Champion. He can be reached at bcarey@deleeuwinc.com.

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