Using customer, supplier, and employee suggestions
To stay close to the customer, people should listen to the customer. Yet, many businesses only listen when they are asking the questions. They conduct surveys and focus groups, while ignoring unsolicited suggestions.
Many managers, hearing about the billions saved by Motorola, Chrysler, General Electric, and others, say, "I wish we could do that." You can, without much trouble or cost, albeit on a smaller scale.
First, try a simple pilot project: see if you have received any suggestions, in any form, from suppliers, customers, or your own staff. Then treat them as though they were survey or focus group findings: consider the cost of implementation and possible benefits. If they are cheap to implement and carry little risk, put them into action. That is all it really takes. Once you start actively and quickly handling all the suggestions you get informally, and are looking for more, take the next step: ask a few people for their input, what they would change, what bugs them. Then use that information, as well.
If you are happy with the results, consider using a small version of NUMMI's system (NUMMI is the joint venture between Toyota and General Motors, where many American Toyotas and Geos are produced). About 90% of employee suggestions there are implemented, usually in about three weeks. The suggestions are usually small in scope, but the large volume has a major effect: the plant has exceptional quality, high morale and attendance, and a good efficiency rating. (This plant was closed by GM for several years because of poor attendance, poor quality, low morale, and low efficiency).
At NUMMI, if an employee's suggestion is approved, the employee is given the authority to implement it. This makes managers' jobs easier, because the staff takes on the extra workload of implementation; and it increases the staff's morale and stake in the system, because they have a direct hand in the actual change.
Small but irritating problems tend to be resolved immediately. Quality improvement is also faster, because the line employees usually know of problems before managers do. Service or product issues may not be visible to a manager who does not spend time out front.
Part of the morale boost comes from employees' feelings that they are respected (which bounces back: when people are respected by someone else, they often reciprocate the feeling). Part comes from having the power to immediately fix problems. That will also increase their commitment to your business, because they will have a personal investment in it through their changes and actions; which will decrease turnover of the motivated, quality employees who are generally most sought after.
Though many managers are naturally reluctant to give up control of the process, it is even more effective to set up a small group of people from different areas and levels to evaluate and approve suggestions. In any case, the emphasis should be on action: if there is little risk and little time and money investment, run with it (or, rather, let the idea's proponent run with it). If there is a risk or sizable investment, consider alternative ways to test the idea and see whether it is worth the risk. In general, have a "bias for action."
Suppliers are often neglected when people ask for suggestions, but they can be very helpful. They have a vested interest in your success, an informed point of view (since they usually also visit your competitors), and an outsider's perspective combined with some knowledge of your business. Though it may not be possible to get views of competitors' practices through common suppliers, there should be little problem in obtaining views of your own practices and how they can be made better.
Chrysler has focused on suppliers in their SCORE program, which has saved $1.2 billion so far. Suppliers who cut costs, either internally (e.g. by figuring out a way to cut the price of seats they sell to Chrysler) or externally (e.g., by advising on a way to save time when installing seats) share in the savings. The key to success in a program like this is honesty and speedy follow-through: those who pull a "bait and switch" with their rewards program may gain in the short term, but will lose out on greater savings over the long run.
For some, the best way to work with suppliers may be informal conversations, essentially asking how you are doing, what you could fix or improve, and whether they have any ideas that would help sales.
Start by speaking informally; start out slow, with conversations. If you have retail outlets, try Sam Walton's (Wal-Mart) method of walking up to customers and conversationally asking them why they are interested in an item, why they would choose one over another, and what they felt the store could do better. and ramp up to more formal methods as you are implementing more suggestions and changes. In general, try to avoid getting more suggestions than you can or are willing to handle. You should also be able to justify not implementing an idea if you turn it down, using the same logical standards you would use to support making a change. (Again, there should be a "bias for change" when you solicit suggestions, because people will expect to see action. If action does not come, and quickly, they will usually feel disappointed and frustrated, unless the reasons are explained to them in a way they understand and agree with).
The next step is the suggestion box (unless you already have one). Make paper and pencils or pens easily available. In addition, each time anyone hears a customer request, have them write it down and drop it in the box. Every week, sort and summarize them. If a customer filled out a form, consider posting it with the actions you've taken or are planning (or consider contacting the customer, preferably by mail) , If you can't do it, tell the reasons why - but make sure there are other suggestions you are taking. (One demotivating manager posted twelve suggestions, each with specious reasons why it would not be done; no more suggestions were made). When you solicit suggestions, make sure you are going to follow some.
Again, you do not need to do all of this yourself; you can form a small, informal working team, involve volunteers from the staff, or delegate some of it to different people. If you keep authority, responsibility, and implementation with the same people, the reaction is usually positive.
In the end, if all goes well, you may have the next company to be hyped for its incredible savings and competitive advantages.
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