Customer Value Part Two

With Lean, it is very important not only to know who your customer is, but to understand what he or she values.

A core concept to understand is that for any externally focused organization, including a state agency, the way to maximize the long-term benefit to the investors – in our case, the tax paying public – is by delivering value to customers. 

Because we don’t get to do our vital mission work when we fail to deliver value for our customers. Instead, we’re bogged down dealing with complaints and other distractions that keep us from our mission. Even worse, dissatisfied customers often will invent solutions to perceived problems – solutions we may not like.

Let’s more clearly define what we mean by “value.”

Lean narrowly defines value-added activities as those which:

Transform materials or information into products or services that …
The customer wants, and which are …
Done right the first time.

Let’s say you produce a report for your supervisor. In this particular case, you chose to write about a topic that interests you and you spent the better part of a week researching the data, documenting the sources, carefully ensuring the facts were correct. Because you are good at what you do, you thoroughly proof read the document before submitting it to her. Indeed, you think this might be the finest report you produced in your long and stellar career.

But, hold on, your supervisor didn’t ask for the report, and so she tells you “thanks but no thanks,” and to stop wasting your time.

In this example, you definitely transformed information into a product – the report – which may have been well done but had no value to your customer. In fact, you probably created additional waste for her by adding something to her in-box.

Likewise, had your supervisor asked for a report, but you blew off the assignment and submitted substandard work days past the deadline, you would find much the same result but for another reason: you transformed material into a product your customer wanted, but it was not done right the first time and so again, it was wasted effort.

It may surprise you that much of what we do in our day-to-day job is not value-added from the customer’s perspective. Studies have shown that upward of 95 percent of worker time is spent on nonvalue-added activity. And even if this estimate is high – say the figure is more like 85 percent – there is still a lot of room for improvement.

Now just because activities may be nonvalue-added in terms what our customer may be willing to pay for, it doesn’t mean they aren’t necessary. We all operate in a world of constraints over which we have no control. Think how much more productive we might be if only the Internet worked faster, or the phone stopped ringing or you didn’t receive so much spam email.

In government, as in any industry, there are requirements imposed that we simply must do whether our customer finds value in them or not.