Compressed Air Best Practices - May 2008 - (Page 39)

Compressed Air Industry AUTOMOTIVE ASSEMBLY ASSEMBL | 05/08 | If you’ve realized that staying viable requires you to become truly customer-centric, here are a few truths you need to understand up-front: TRUTH #1: Right now your company is product-centric. Most companies still base their operations on the value chain that was popularized by Michael Porter in the mid-80s. The value chain is a string of critical processes that begins with raw materials, or inputs, and ends with a product or service delivered to a happy customer. Thinking this way makes sense because it is easy to place the customer at the end of the process. But this mind-set doesn’t just affect an organization’s structure; it weaves its way into every aspect of how the organization manages itself and how managers make decisions. In short, it creates a situation in which employees throughout the organization are focused upon delivering the product or service for which they are responsible. Engineers are working to design new products that will keep them one step ahead of their competition. Manufacturing is producing goods to meet customer orders or demand projections. The sales department courts potential buyers so that they become actual customers. Once they do, salespeople then return to identifying new targets and trying to transition those. Manufacturing works to refill shelves. Engineering continues developing products. The cycle continues. “Employees are trained to think in terms of product development, delivery and value,” says Giannetto. “Even if it doesn’t know it or intend to do so, the organization becomes product-centric, not customercentric. Management is comfortable with this view of the world; after all, how can a mainstream management theory like the value chain approach be wrong? But then, when they do try to focus on the customer, they do not know how.” and often dangerous network. The customer then consumes this power and must pay for it, creating the need for back office operations such as accounting, finance and customer service. The rest of the company’s employees consist of highly educated engineers, highly trained and specialized workers and a management team that is also highly educated and experienced in their field. Together they make up 75% of the organization. “But have you ever stopped to consider that an organization designed this way — and believe me, the power industry has plenty of company — has a lot of people focused on consistency in design, execution and production, but little focus on the customers and what they want?” says Giannetto. “That’s 75 percent of an organization that has little understanding of the customer’s true needs. It just goes to show what a challenge becoming customer-centric can be for most companies. But it is possible; you simply need to know where to start.” TRUTH #3: Your company’s money isn’t allocated with the customer in mind. When trying to transition to a more customer-centric organization, employees who have power within the organization are reluctant to yield it to those who understand the customer better. And their unwillingness to relinquish power results in a reluctance to shift funding from traditional areas to those that most affect the customer. “To get an idea of what this kind of transition looks like for a company, let’s go back to the power utility example,” says Giannetto. “For a power utility, this means that engineers, who have often dedicated their entire lives to the study of their work, must be considered equal to project managers and customer service agents, most of whom do not hold any academic degree. Money, resources and staffing must focus on project management and call center technology, not just on millionor billion-dollar assets. There must be financial recognition that these things equally affect the customer — and when large sums of money are involved, change tends to happen slowly.” TRUTH #2: Your employees may not understand the customer. To put the value chain concept in perspective, consider how a power utility works, says Giannetto. Power is generated by a complex and often dangerous power plant. It is delivered to the customer via a complicated www.airbestpractices.com 39 http://www.airbestpractices.com

Table of Contents Feed for the Digital Edition of Compressed Air Best Practices - May 2008

Compressed Air Best Practices - May 2008 Contents From the Editor Utility-Air News The Compressed Air Audit of the Month Pneumatics Real World Best Practices Delta Industries: Doing What is Right for Customers Delta Industries: Six Truths You Need to Know about Really Putting the Customer First Power Supply Industries Resources for Energy Engineers Wall Street Watch Advertiser Index Job Market

Compressed Air Best Practices - May 2008

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