Customer Value in Perspective

The customer is at the heart of almost all contemporary management approaches that have emerged over the last few decades – lean, six sigma, BPR, TQM, JIT, ToC to name but a few. Customer value is first, and arguably most important, of the five lean principles. The five lean principles first appeared in Womack and Jones’ seminal text of 1996, Lean Thinking. They are:

1. Specify value in the eyes of the customer
2. Identify the value stream
3. Make the value-creating steps flow
4. Let customers pull value
5. Continually strive for perfection

Customer value, in spite of being the first and most important of the lean principles, is probably the least understood. Consequently companies often ignore it opting instead to work on mapping their far more visible value streams. More often than not this is for a want of approach or technique to tackle customer value. Broadly, the lean world is awash with an array of different tools and techniques. See, for example, John Bicheno’s many toolbox publications. The over-abundance of lean tools brings with it two main problems: first, a perception that lean is all about tools rather than an holistic systems approach to business management; second, dilution of the really powerful tools amongst the many. Having argued that there are probably too many lean tools around, customer value is an area in which a tool, or rather a systematic approach, is lacking and urgently needed. Many companies would benefit from a periodic review of customer value – one that offers real depth of understanding, not the superficial and often meaningless information gathered through customer service surveys.

At S A Partners we have been experimenting with such an approach for a number of years. We have tested our approach with a number of our more adventurous clients and have been pleasantly surprised at the insight that our clients gain from this approach. For some clients it has led to a re-think of the basic elements of their prevailing strategy. In all cases, clients have learned something new about what their customer really value.

Our confidence in our systematic customer value (or Voice of the Customer) approach has grown such that we are now ready to share it with the wider lean community. We hope it will trigger debate and generate greater activity around customer value. In our forthcoming webinar my colleague, Steve Baker, will explain our approach and provide case study examples from both large multinationals and small enterprises.