How can you align business strategy to process excellence?
Dwight D. Eisenhower once said that it is not only necessary to do the right thing, but to do it in the right way also. By aligning the process excellence to business strategy you can make sure that everyone in the organisation is contributing to same goals. Business strategy is all too often just a fluffy word to employees that does not bear real meaning. By focusing on business from an Outside-In perspective using customer centric processes techniques, you can make the strategy come alive in daily work.
First, let’s define the term process excellence used here.
PEX Network has made a great video about that which says that process excellence is the way that businesses create and deliver value to customers:
So, when we ask how can you align your business strategy to process excellence, we actually ask how can we guide everything that is done in an organisation for the customers in a standardized and meaningful way?
To be able to do this, we may have to redefine how we create our business strategies. Traditionally, a business strategy is the means by which it sets out the organisation’s mission, vision and policies to achieve its desired objectives. It can simply be described as a long-term business planning that is concerned with the scope of a business' activities i.e. what and where the company produces products or services.
The problem with this perspective is that it looks at the strategy from the organisation centric perspective (Inside-Out). Since the purpose of process excellence is to control how we deliver products and services to customers from the customer value perspective, these two things do not meet each other.
There is nothing wrong in business strategies as a concept, just in the focus we have when we build them.
So, to align business strategy to process excellence, we need to start building our business strategies from the customer centric perspective, optimising the value we create for the customer through our work. One of the key concepts for the business strategy is customer segmentation. If we use the traditional ways of segmenting such as demographics, psychographics and purchase behaviour, we will miss the opportunities we have in deep understanding of customer outcomes.
Therefore, outcome-based segmentation will be able to identify the gaps between the jobs customers are trying to do and the products and services they have available to achieve that. The traditional segmentation makes the mistake of believing that customers can be put into boxes based on their generalised characteristics. But when you build your business strategy based on identified customer outcomes, your focus will support innovation, marketing and aligning processes to maximum efficiency.
To achieve process excellence through business strategy, it must contain valid information not only about segmentation (who we sell to) but also why we sell. For example, the successful customer outcome (SCO) technique can be used to identify why customers buy our products and how can we offer them unique value. This information can be used as a solid base for process redesign and optimisation projects where everything that is done in an organisation is aligned back to the customer centric business strategy. Many times employees feel disconnected from the customer and that is why they have lost or never build a connection to both the customer outcome and business strategy. After you build your business strategy on serving the customers rather than the organisation, the employees will also see how they are part of the whole system, producing successful customer outcomes.
In summary; to align business strategy to process excellence, firstly you need to build business strategy from the Outside-In perspective-using outcome based segmentation and customer identification techniques. Secondly, you need to align those back to everything that is done in your company from top to bottom. You can use for example process optimization methods such CEI (Customer Experience Innovation) to do that. You can even use these ideas joined with Lean and Six Sigma process optimization, as long as you take that information as a guideline for the optimization instead of plain organization centric waste removal.
Here are some reflective questions for you to ask regarding this topic:
- What is the value base your business strategy is build on? Is it organization or customer centric?
- Is everything that is done in your organization aligned to customer outcomes?
- How do you drive the process excellence, i.e. the way to deliver value to customers?
- Is strategy a fluffy work to your employees, which does not have true ringing to their daily jobs?
- Are you still using the traditional segmentation methods, which do not give you proper information to deeply understand your customers?
- Is your value proposition aligned to customer outcomes?
But what do you think? Let us know by leaving a comment!