Primary Measures of Success of OPEX Program

In the BTOES survey, the top three measures of success were: Customer Delight, Process Improvements and Cost reductions.  It will be useful to review these three measures to see how well they translate to organizational success. An organization would not engage in OPEX unless there was a clear path and a significant benefit to the journey. Click here to read the full Survey Report 2018/19.    

Cost reductions and process improvements

Cost reductions can include reducing cost for purchased materials, facilities, purchased or leased services.  There is always a cost to making a change, whether it is in terms of reduced efficiency during startup, effect on quality of products, etc.  As an OPEX team member, understanding the end effect of the cost reduction on the enterprise will be an important measure of effectiveness.

Process improvements can include operational efficiencies, leaning out production and office processes, employing digital enabling technologies.  An OPEX team should not only be able to identify the improvements that can be gained through efficiency efforts but also how those efficiencies will affect both internal and external customers.

Both cost reductions and process improvements can be objectively measured.  To be sure, there are customer satisfaction elements that go along with these improvements, but many of the benefits are more objective than subjective.

Providing solutions in a cost effective and efficient manner will go a long way to meeting customer demands; and yet, the survey respondents clearly identified that customer demands are changing.  Customers want to be delighted with the products and services they receive, both B2B and B2C. Delight then becomes the measure of how effective our cost reduction and process improvement activities have been.

The question then becomes, how do we measure customer delight.

Delight is measured one interaction at a time.  Many organizations use surveys to gage customer delight.  We often see questions like “How satisfied were you with…“ and “On a scale of 1 to 10 how likely are you to recommend…“ as part of post contact surveys.  Data from these types of instruments can be useful - they capture customers feelings at a point of time and over many interactions – and can provide a point of view as to the performance of the organization over time.  These measures tend to be lagging indicators that measure the effect of existing behavior leaving it up to other instruments to identify the specifics of non-delight.

Unfortunately, customers are not always delighted. They may be happy with your product or service overall but retain some doubts about how effective it is for them.  As highlighted in the survey, “churn” is a significant issue with many companies because the products they provide are like other offerings in the marketplace. Taking a more proactive approach to understanding how to retain customers (reduce churn) can yield improved outcomes.

Customers want to be successful, that is their bottom line.  If the product or service your business is providing helps them achieve that success best, you have a long-term customer that will help your business be successful.  

How can we measure customer success?

We need a plan to achieve our goal of customer success.  A customer success plan helps develop expectations for both the customer and the business.  We can start by clearly identifying customer expectations. It is important to include both customer expectations and business expectations so that the path to success is clear and balanced for everyone.  Next, we need to know how we will meet those expectations – that requires mapping our processes. Having an existing mapped process ensures we are driving to a common solution and reducing variation (think Lean).  Developing realistic metrics and goals for each critical expectation and process is critical. An effective metric may not be easy to identify but is critical to know how we are doing against the expectation. Measuring hours of training on a process (input) may be useful, measuring how effectively employees are using processes (output) is essential.  Assigning an owner for each goal (responsible person) helps to assure the progress toward the goal is monitored to drive achievement. These people will be “Accountable” for their goal. Lastly, for each goal must have a schedule that is agreed to by everyone to drive to success.

One leading indicator that should be established is a customer health score – measuring how customers are using the product or service and how well the business is adopting the new processes.  Proactively reaching out to users of products to see what is required, anticipating issues that can then be addressed and resolved before they become non-delighters will drive customer success.

Customer success, like all Operational Excellence initiatives, requires a top down company wide commitment, a culture change.  When each department in an organization takes a Customer Success focus, significant synergy can be generated to assure everyone in the business is identifying who are their customers and how best to assure they are successful.  We will enable our success when we focus on helping our customers be successful. This can lead to a “Business transformation in order to keep up with changing customer (internal and external) demands.”

https://insights.btoes.com/research-report-2018/19-the-global-state-of-operational-excellence-critical-challenges-future-trends