Customer Value

Fundamental to understanding Lean is knowing who your customer is. But equally or more important is understanding what the customer values.

With Lean, value is always defined from the customer’s perspective. So if we don’t properly understand who our customer is, it is easy to see how we could misdirect our efforts when redesigning processes to reduce waste. By not getting this right, we might actually be designing waste into the process as far as our customer is concerned.

Say it’s your job to write permits. If we confuse a consultant for the customer, as opposed to the facility owner, we might easily build waste into the process of issuing a permit. Why? Because the consultant quite likely values something altogether different than his or her client, our actual customer.

For example, a consultant might prefer a relatively complex permit application if it leads to more billable time helping the facility owner to complete it. What if we made the application so simple the customer could complete it all by himself? Get the idea? Different roles lead to different values and different outcomes. With Lean, our goal is to eliminate waste and deliver best value for the customer.

This is not to say the customer is always right. In fact, the customer is often wrong. Say you walk into a car dealership, and as the customer, you want to be in and out in half-an-hour with a brand new truck at cost. Is that going to happen?  No.  Why? Because that would not be responsible to the automaker’s shareholders. No one expects the dealership to meet the customer’s every want, they just have to know that the customer values a truck that is highly reliable over time. They then proceed to charge a fair price that covers not only their costs, but delivers solid investor returns.

Here is the key, and this is true in any externally focused organization, the way to maximize the long-term benefit to the investors (the public in our case) is by delivering value to customers.