Friday, January 15, 2010
Strategic Planning Analogy #304: Ignore Complaints?
Back in the 1800s, hospitals tended to create death almost as often as preserve life. Take childbearing, for example. Healthy mothers-to-be would come into the hospital, yet up to 25% of these mothers would die in the hospital from “Childbed Fever.”
A lot of time and effort went into caring for these women suffering from childbed fever. Later, much effort had to go into finding ways to raise the children without mothers. There were all kinds of problems needing solutions.
In the late 1840's, Dr. Ignaz Semmelweis was an assistant in the maternity wards of a Vienna hospital. There he observed that the mortality rate in a delivery room staffed by medical students was up to three times higher than in a second delivery room staffed by midwives.
What was the difference? The medical students had multiple duties and would often rush into the maternity operating room right after dissection lessons in the autopsy room. By contrast, the midwives would only come in to treat expectant mothers. Semmelweis suspected that the students might be carrying infections from the autopsy room into the maternity room, thereby infecting the birthing mothers.
To test his theory, Semmelweis ordered the doctors and medical students to wash their hands with a chlorinated solution before examining women in labor. This was a radical idea at the time, since doctors in the 1800s did not wash hands or change bloody gowns between patients. After mandating the hand-washing, the mortality rate in Sennelweis’ maternity wards eventually dropped to less than one percent.
It took many decades after this for the idea of routine hand-washing to gain widespread acceptance among doctors. The doctors resisted the idea that their hands might be causing disease to spread. This stubbornness lead to many more decades of unnecessary death. (You can read more about handwashing here.)
Problems seem to pop up all the time in the world of business. Every day seems to bring a new crisis demanding a solution. Precious time must be diverted to finding solutions to all of these problems.
The hospitals of the 1800s also had lots of problems. At least that is how it appeared to them. In reality, however, they had just one real problem—a lack of cleanliness. When doctors started washing their hands, a lot of the other problems disappeared.
Nobody was complaining about cleanliness. Nobody was fretting about what might be on the doctor’s hands. As a result, this was not an area of concern or attention. Instead the attention was on the patients with the diseases that were unknowingly caused by the dirty hands.
The problem was not with the patients. It was with the process. A simple fix to the process (wash hands) eliminated a huge number of problems with the patients.
This could be the same situation as your business. Perhaps you don’t have as many crises as you think. Instead, you may just have one bad process. A simple fix to the process might eliminate all those other problems.
The principle here is that strategic success is improved if you focus on goals rather than complaints.
Problems With Complaints
Complaints come at the end of the chain of activities. Something is wrong with the final outcome and people complain about it. It could be an internal complaint from the CEO, like “sales came in below plan.” It could also be an external complaint from customers, like “your product doesn’t work as planned.”
Complaints are typically resolved by trying to fix the outcome that came out of the process. If the complaint is about sales, then sales-boosting solutions are looked for to fix the problem. Recommendations could be to have a sales-boosting contest for your salespeople, or to lower prices, or to issue coupons, or some other sales-boosting tactic.
If the complaint is about how the product works, then solutions are looked for in ways to improve the product. Features could be tweaked or software could be modified.
The problem with focusing on complaints in this manner is that it is like hospitals in the 1800s focusing on dead patients. By the time you get to the end of the process, it may be too late to really make meaningful improvements. To really fix the issue, you have to go upsteam to alter the process and attack issues that nobody may even be complaining about (like unclean hands).
For example, all the sales-boosting strategies of the world are useless if your process is delivering a product or service nobody wants. Your patient (the product) is already dead, and sales contests won’t bring it back to life.
Similarly, modifications to a product out in the field that is inappropriate for its customer base seldom miraculously converts that product into something appropriate. The product is already dead.
Focus on Goals
Rather than focusing on complaints, a better approach is to look at goals. In general, the strategic goal of a company is the following:
Find a unique way (or process) to deliver a product or service which provides both a superior outcome for the customer and profits for the company.
When you focus on a goal such as this, you are forced to look at the entire process—the big picture. It is a focus on building an integrated business model and how it impacts the life (or business model) of the customer. It forces you to repair things upstream, before the complaints occur.
It is only when you examine the entire process that you find the importance of cleanliness in hospitals. It is only in examining your entire business model/process that you will find the superior strategy.
There is a lot of talk these days about using web 2.0 technology to have more conversations with your customers. However, to make these conversations most beneficial, it is important to talk about the right things. Don’t focus the conversation around complaints. Instead, focus the conversation around the goals and outcomes desired by your customer.
The Corporate Strategy Board published a paper in 2009 about a company who took this approach. Traditional conversations, like focus groups and satisfaction surveys, had not been very useful, because they tended to focus on complaints about the mess coming out of the current process, rather than on how to build a better process.
To fix the conversation, this company focused on trying to understand the desired outcome goals of their customers, i.e. what were each of the jobs at the customer’s company trying to accomplish (and what would success look like for these jobs).
By changing the conversation to goals, they stopped trying to improve the product and instead tried to improve the outcomes of the customer. This change lead to radically different approaches and radically different products which benefitted everyone (company and customer).
Examples in the Corporate Strategy Board paper included the following:
1) Customers complained that they needed better automobile brakes. In the old days, they would have just tried to fix the complaint by designing bigger brake pads. However, when they asked about the desired outcome goal, they discovered the customer needed to minimize breaking distance in slippery conditions. Therefore they abandoned the old break pad mindset altogether and focused on antilock braking technology.
2) Customers complained that angioplasty balloons were not smooth enough. In the old days, this would lead to focusing on ways to lubricate the balloons. However, a deeper discussion on goals discovered that the true desired outcome was minimizing the recurrence of artery blockage. That moved the process away from lubricants to collapsible stents.
Internal conversations need to change as well. Instead of complaining about sales, move the conversation to designing a business model so powerful that sales almost take care of themselves.
Rather than addressing each problem individually and sequentially, look for common threads which point to a systemic issue with your business model. Seek out your version of the “unclean hands,” where a simple process change can eliminate a wide range of downstream problems, even if nobody is complaining about the process.
And take a holistic approach to examining the business model. The Edsel was designed by trying to optimize every piece of the automotive design individually. Nobody bothered to realize that when all the individual pieces were put together, the entirety of the car was a disaster. Look at how the parts interrelate to impact the greater goal of superior outcomes for the customer.
If you want to make major improvements to your strategy, don’t focus on complaints. Instead, focus on the bigger picture goal—a better internal business model providing superior outcomes for the customer. Focusing on the big problem can save you from dealing with a lot of little problems (and complaints) later.
There was still some resistance to hand washing by doctors as late as the early 20th century. In 1910, Josephine Baker, M.D. started a program to teach hygiene to child care providers in New York. Thirty physicians sent a petition to the Mayor protesting that "it was ruining medical practice by...keeping babies well." It is narrow thinking like this that leads to failure.