Our understanding of quality in business today is still largely drawn from an approach that has evolved from the manufacturing sector during the past three decades. Quality initiatives typically have been associated with products like AC, cars, cellular phones and semiconductors. In those industries, quality has been about reducing variance and ensuring that the products conform to clear specifications. The idea is that consumers can expect the product to perform reliably. The focus on reducing variability has prompted more and more companies to adopt quality control practices like statistical process control, Six Sigma, Taguchi/Lean methods for eliminating defects in various stages of design and manufacturing.
Quality in services
Though Six Sigma was originally developed for manufacturing processes by Motorola about 15 years back, but today service firms and service functions within almost every sector are using Six Sigma to improve profits and performance. Most of the companies in services are now deploying Six Sigma in their marketing, finance, information systems, legal, and human resources processes. When Mr. Jack Welch, ex Chairman of General Electric (GE), learnt that GE was running at 3 to 4 sigma level and the cost saving opportunity of raising current quality level to six sigma level was somewhere between US $ 7 to 10 billion, he decided to deploy Six Sigma companywide, all over the world. Since 1996, GE has trained thousands of its employees as Project Champions, Green Belts, Black Belts and Master Black Belts to take up improvement projects and in the process have claimed to save over US $ 2 billion. Today many of the world’s leading corporations like Dow Chemicals, 3M, Bombardier, and Sony are using Six Sigma to improve performance and change work culture.
Unlike manufacturing operations, defining a service defect is quite a challenging aspect of applying Six Sigma in service delivery systems. This is because it is not easy to reach an agreement on what is a service defect. Since Six Sigma effort is linked to customers, service defect can be defined as a flaw in a process that results in lower level of customer satisfaction or a lost customer. As sigma increases, cost and cycle time go down while profitability, productivity and customer satisfaction go up.
Standardized service processes like issuing credit cards, opening bank account, administering customer loyalty programs etc. can yield substantial benefits from a six sigma effort. Other standardized processes within a company like purchasing, accounts payable, payroll, budgeting processes etc. can also be strong candidates for applying Six Sigma. Citibank, American Express, JP Morgan, GE Capital, Bank of America are some of the leading service companies deploying Six Sigma.
For companies offering services in media, consultancy, marketing/advertising/communication support/solutions & execution, telecom, while a defect can be linked to customer-retention/churn, customer-recommendation and customer-satisfaction score, a more extensive view of quality needs to be taken. It is also about managing emotions, expectations and experiences of customers.
In some respects, designing/developing/running/monitoring an online or offline program is not much different from running a theme park. While any amusement ride in Disney’s complex has to work flawlessly all the time, it is not just about defect –free rides. Wide variations in expectations are likely. Each consumer may have different tolerance levels for things that can go wrong. For example, when there are long lines for a favorite ride, the issue is not just the length of the wait but also how a customer feels about waiting. Disney realized it could ensure a fun-filled wait by sending out live Disney characters for the crowd to see and play with. What could have been a problem was turned into a new opportunity to reinforce the Disney Magic. Likewise, various value-adding tools, trackers, consoles for keeping the customer suitably educated, involved and informed about the campaign/project’s behavior and performance ,work like magic to effectively manage and reinforce customer’s experience for agencies. Investment firm Charles Schwab is another company trying to effectively manage customer’s experiences. Schwab clients who are put on hold are given a choice of listening to financial news, stock quotes, or other information likely to appeal them. To the financially savvy, stock quotes appear to be as interesting as Mickey Mouse is to children.
Ergo, services businesses need to adopt the emerging view of quality: adjusting to the dynamically shifting expectations of customers. The capacity of constantly being able to peg-up and up-notch the quality-levels of one’s service is a definite facilitator to become a business entity of customer’s choice and preference.
Conclusively, as we are marching into the future, the focus of quality control is shifting from ‘zero defects’ in products to ‘zero defections’ of customers in services.
