Five Critical Success Factors

April 23, 2008

By Laurie Clarke, COO, The Tatham Group

The Tatham Group offers 5 critical success factors to ensure operational excellence. These include: FOCUS, ALIGNMENT, PEOPLE, TECHNOLOGY and COMMUNICATION.

FOCUS on creating superior value for the customer. This starts with leadership direction, vision and support. Leaders must clearly, simply and consistently communicate to the organization, through their words and actions, their strategy for creating customer value. Then, the company must define their core business processes – the ones that start with a customer need and end with customer satisfaction. Many companies get so caught up in their own internal complexity that the customer gets lost along the way. The customer is only willing to pay for what they perceive to be of value, therefore focus should be on redesigning the customer processes for flawless execution – of quality, fast, responsive and with value. The internal processes of the organization should be secondary to these efforts and should be questioned if they are needed at all and if so, how can they be designed to support the customer needs. The end result is a company-wide focus on the customer where the customer is inherently woven into the processes not excluded from them.

ALIGN processes, people and technology. Once there is a clear definition of what processes add value to the customer, the company must align around them. This is in contrast to most organizations that align around distinct functions. Support and enabling departments such as finance and human resources get untangled from the core of the business and are available to be ‘pulled’ in as needed to provide timely data and assistance with change management. Goals of the organization are aligned around the company focus – the customer. People are rewarded on following processes, using process measures to make data/fact driven decisions and for finding the root causes of problems and fixing them right the first time.

PEOPLE are a company’s most valuable asset. Only people are capable of satisfying the needs of customers and making improvements on the way things are done. However, more now than ever, it has become a challenge to attract and keep motivated and enthusiastic employees. By reducing the complexity in transactional or administrative duties, you can eliminate non-value-added steps, waste or add automation. This frees up time for people to focus on the customer, plan for new market expansions or product development or come up with innovative ways to provide the same product/service to the customer in a more efficient, value creating way. In order to ensure their creativity is applied in a structured, disciplined way provide staff with a common sense approach to problem solving that starts with the customer, is based on facts and data, uses experimentation to find the root cause of issues and prototypes solutions before full implementation. In doing so, people will have a common language and common goal and management will be confident in the changes being implemented. New talent will be drawn to this culture because they can be creative and see the impact they have on the growth of the company.

TECHNOLOGY applied last as an enabler or accelerator to the process – not as the solution. Technology is an essential component of a company achieving results and satisfying customers. However, it cements a current process it does not fix a broken one. Typically it is used too soon, before the underlying processes are running efficiently and effectively. Therefore, it often impedes people from doing their work, as they are no longer able to perform the workarounds they use to compensate for the broken process in order to satisfy the customer. The role of technology should be to enable people to perform tasks more efficiently, accelerate processing of materials/information and collect data in a simplified manner so that people can make sound decisions. It must be applied with an end-to-end, customer-to-customer, perspective once the root cause to the issue is known and the processes have been redesigned.

COMMUNICATE clearly and frequently while always checking for understanding. Now that the customer has been built into the processes, collecting customer data is no longer a huge effort or program – it is part of what everyone does, every day. In addition to the customer’s voice, a feedback process for employees is also essential in any change effort so that people feel safe to feed back data, thoughts and feelings as they test new processes. Not only will this give management a good sense of how successful the process is, people will have a sense of continued involvement. With open communication comes an environment of truth and innovation – timely, accurate data that allows action to be taken before disaster occurs, idea generation from all levels of the organization and happy employees who in turn create happy customers!