How to turn vision into reality with effective operational excellence

Q&A with Tim Wyllie, CEO of AirSpeed Telecom and Partner at Granahan McCourt Capital

Q: Operational excellence is what all businesses seek, but how do you regard it?

A: Everything has to be about delivery to the end-user and that means focusing on process. Improving processes comes from the intelligent use of metrics.

I’m afraid you can’t beat the power of metrics to show managers and employees where processes need to be overhauled or improved. I believe in measure, measure, measure.

Although theorists argue that operational excellence comes from employees understanding the processes that lead to customer value and being able to step in and fix them independently, this is impractical in most large organisations. Ideally, the drive towards achieving operational excellence starts at the top and needs to be woven throughout the organisation so everyone understands and values the fact that a portion of their individual remuneration is decided on by the customer they are servicing.

Q: Can an inspiring mission statement or well-articulated vision make a difference?

A: It is true that many companies believe a carefully-crafted mission statement is vital to operational excellence if it is effectively communicated to the workforce.

However I’m afraid my experience is that in the everyday effort to move the business forward, employees soon forget those wise words or snappy phrases. Even worse, dissatisfied customers at times take these statements and reword them for their own benefit as they rant about perceived shortcomings.

In my world the mission must be about how each of us impacts the customer and my inspiration comes from knowing the benefits of positive traction/trends in the ten or 15 key numbers the business needs to look at every morning.

Q: So what is the best approach to achieving operational excellence?

A: There are various theories about operational excellence, but in practice nothing beats looking at the right metrics so you know what is going on in your business and where you need to improve. When you are confronted with a difficult operational issue you need to agree what you are looking to solve, separate it into the most fundamental drivers and assign the right skill set to each. Then you must assign the best means for measuring each driver, prepare a dashboard with the specific metrics and manage it through constant reporting and communications.

It is only by looking at the right metrics that you can see where you need to drive harder to increase customer recruitment, satisfaction and retention. Operational issues can often only be rectified when they are seen clearly from numerous angles.

Q: How do you know what you should be measuring and monitoring?

A: The key is not to overload yourself with metrics. I once worked at a business where there were literally hundreds of reported metrics and that was too much – everyone lost focus. Key Performance (or Business) Indicators should essentially be that – the critical ones. Much of the skill of management is in establishing those five, ten or 20 metrics that require daily attention, weeding out those that have little impact on customer service and revenue.

You also need to adapt and reconsider what you look at, as time moves on. Although metrics from call centres, for instance, may not be in your current, primary set of metrics, they can still be hugely important. You need to remember that your customers have their own sets of KPIs that are also constantly reviewed and altered in line with the needs of their own businesses. As a service provider, it is incumbent upon you to know their drivers so that you can address them accordingly when reviewing your own internal priorities.

It is important, however, that everyone is aware that it often takes months rather than weeks before the needle on the dashboard starts moving in the right direction.

Q: How can the reliance on metrics motivate staff?

A: I do buy into the old adage that happy employees lead to happy customers, but still swear by the fact that everything needs to be about enhancing the end-user experience.  With that in mind, it is quite straightforward to inspire your staff with rewards that impact the right metrics while simultaneously educating them on the most critical drivers that will have the biggest effect on sweetening their potential rewards.

Employees, when properly motivated, will be proud of the results of their efforts. Reduced customer churn and/or ARPU (average revenue per user) erosion are two of the key benefits that motivated employees will certainly appreciate. The figures on a KPI dashboard should be clearly understood so the employees know not only what is expected of them, but also how the achievement of certain targets will directly affect their own at-risk remuneration, bonuses and career prospects.

Q: Talking about process is all very well, but what does it mean to staff on the ground?

A: In telecoms, our emphasis on process means every employee seeing how all the links in the chain come together to bring value to the customer – what the customer experiences all the way from construction to installation, activation and eventual end-use.

In any given quarter, an employee should know how the company is doing against a target such as mean time-to-repair, uptime and some other service standard. Even a small movement in one metric can, in time, have a big impact on an important indicator, which in turn can result in better remuneration.

Q:Won’t the focus on metrics make a business too rigid in its approach to operational excellence?

A: No, because it is also crucial to constantly review the metrics in relation to what the customers are telling you. Within telecoms for instance, this has meant a big shift towards customer convenience.

Take this example. For the last decade or so, everyone in telecoms management has been concerned with the abilities of their technicians, how their technology looks and how the technician behaved in terms of cleaning up and being polite when performing an installation or service call. Now, however, consumer expectations have changed and service operators have altered their processes radically to cater for them. Customers are more interested about when and how long the technician will be impacting their world. With so many dual-income households, many customers now want the technician to arrive before they go to work, after they return home or on the weekend.

In the US, numerous service companies have responded by using vehicle-equipped GPS technology to enable householders to go online to track where their designated technician is. We can expect to see more companies innovate in this way in order to meet changing customer expectations.

Q: How do you achieve operational excellence when merging two organisations?

A: Operational excellence becomes more challenging when you merge two companies with differing philosophies, outlooks and attitudes.

In our Ireland scenario, for example, one company may operate on the basis of contracting out a majority of its service work, whereas the other company may be more involved in building its own network, using its own multi-skilled staff.

Both employee groups may be very passionate but with very distinct mind-sets. Neither scenario is necessarily better than the other.  It really depends on the quality of work, the economics of the business and the all-important end-user experience. To achieve a merger rather than a takeover in this situation, senior executives in both organisations had to examine the processes of each and pick out the best for future adoption. Process re-alignment, although painstaking, was critical to our successful merger and to the maintenance of the high level of operational excellence we experienced prior to operation.

Q:What about the human element in all this?

A: In mergers, for example, you definitely require the right people in the right roles to make it all come together successfully, so that personality and internal politics do not become barriers.

But in any organisation determined to achieve excellence you need the right people and excellent relationships. Whether you opt to do things in-house or contract your service operations to third parties, the human element is critical.

In terms of dealing with contractors, nothing is as effective as a good relationship between the business and the supervisors managing the teams in the field. Experience has shown me, at least, this works better than any incentives or penalties inserted into contracts.

I have also found that it pays to talk and communicate. There is nothing more valuable than sitting down with call centre, NOC, installations or service staff to find out what is working and what is not working. They know more about what the general temperature of your customers is, since they interact with them day in and day out.

It is also vital to have plenty of versatile bench strength. You need depth in your organisation that can be quickly called upon to step in to deal with unusual demand volumes, unexpected crises, or to replace unplanned attrition. This is particularly important in a fast-growing industry like telecoms in Ireland, where staff have plenty of other opportunities, as is common in markets experiencing rapid expansion.

Q: Do you read management books about operational excellence?

A: Well, management theory has a role, but is often too industry-specific. In reality success in any industry relies on seeing an issue before it becomes a problem, defining it, understanding it and then effectively communicating what needs to be done by everyone who has an impact. Agree the metrics that need to be measured and managed and begin looking for the next anomaly.

In truth, operational excellence is not about theory. It is about decision-makers within management having their fingers on the pulse of the business, measuring what matters and using those metrics to communicate with staff so that everyone knows what they have to do, how they can achieve it and how they can ensure the business is always at optimum efficiency.

 

About Tim Wyllie