Benchmarking & Innovation

[Paul Hollingworth <PH@paulholl.demon.co.uk>]

Morris Taylor <Morris.Taylor@btconnect.com> writes
>If you decide on the experience that you want your travelling audience to
>have (you don't need me to tell you that by definition that has to be
>something that they will both want and pay you for - and you either have to
>know already what that is, or ask them, or be so bold that you take them by
>complete surprise

Dear Jo,

Morris Taylor raises a very relevant issue: What do your customers
_really_ need from you?
        Do you know? 
        Do your competitors know?
Perhaps a more interesting question is: 
        Do your customers know?

<suggest you pause to think about that last question before reading on>

I once (rather rashly) gave a short presentation on benchmarking to Dr
Deming (it was at a BDA Study Weekend in 1991 - there were about 20
other people in the room, but I was only aware of Dr Deming). Deming's
observation, if memory serves, was that benchmarking competitors was
unlikely to be very useful. However, we concluded that working co-
operatively with organisations in different industries with similar
process objectives could be helpful (the example I gave was a football
stadium and an airport). For most companies this may be quite difficult
to set up, but fortunately you have the rest of the Virgin organisation
to work with. This type of co-operation may be especially useful with
regard to service innovation.

As Deming observed, innovation is more important than improvement for
long term economic prosperity (see Henry Neave's Deming Dimension ch14,
the Four Prongs of Quality).

This idea links directly to Kano's model of customer perception (good
overview available in ch5 of Brian Joiner's Fourth Generation
Management). According to Kano, customers have three types of
expectation: 
1.      'More is better' factors. Typically, these are service
characteristics such as quick turn-round time. They result in customer
satisfaction when fulfilled and dissatisfaction when not fulfilled, but
more is better
2.      'Delight' factors. These characteristics are not expected, as
they are not part of the customer specification. Consequently, these
result in genuine customer satisfaction when fulfilled but leave the
customer feeling neutral when not fulfilled. For example, when you go
out of your way to solve a problem which the customer does not think is
your 'fault'. 
3.      'Must-be' factors. These are the minimal requirement of the
customer's expectation. They are taken for granted when fulfilled but
result in customer dissatisfaction when not fulfilled. For example,
trains must run on time, connections must be met.

So, back to benchmarking.
What is it you are hoping to achieve?

Although you may aim to delight your customers at Virgin, first you have
to know _exactly_ what the must-be factors are, and ensure that you
consistently meet them. 
Certainly you need to be aware of your competitors innovations, as these
become part of YOUR customers expectations of YOU and eventually become
must-be factors. 

But, don't expect customers or competitors to tell you what innovations
have yet to be devised. To quote Dr Deming: 

        "Innovation requires action on the part of the producer".

Best regards
Paul H

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Paul Hollingworth                       4GM Consulting Ltd      
email: PH@4GM.com                       http://www.4GM.com
phone: +44(0) 1423 322225               fax: +44(0) 1423 322205 
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