The Three Bears - Project Gutenberg etext 19993

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The variety of demand in service is one reason it differs from manufacturing. This is a subject I have talked about before.  In service, the customer brings variety and the aim of a service organization is to understand what matters to customers (their nominal value).  A manager for a client of mine came up with the analogy of Goldilocks and the Three Bears to describe the relationship.

You know  the story of Goldilocks.  She finds a house that is empty and different types of porridge, chairs and beds until she finds one that is “just right.”  So it is with customers that are provisioned service they want service to respond to what matters to them, not the standardized process that they get when they interact with an industrialized, mass-production service provider.

Customers want it “their way” and not providing it in the manner they want it stands to increase costs through waste like failure demand (demand caused by a failure to do something or do something right for a customer – Seddon).  When customers don’t get what they want . . . they either don’t do business with you or complain.  In Taguchi terms, when service organizations don’t  provide for a customer’s nominal value there is economic loss.

Key to understanding a customers nominal value is first understanding your service organization outside-in (customer’s perspective) as a system.  Understanding customer demands that are placed on the organization helps us define and refine customer purpose.  Measures emerge that are significant to the customer.

Measures like end-to-end time for certain types of services are important to customers.  But each customer or group of customers sets their own nominal.  Only by going to the points of transaction can we listen to the demands placed on service organizations by customers and learn what their nominal value is.  Just like Goldilocks wants things “just right” so do your customers.

Before your service organization heads down the industrialized approach promoted by today’s management fads, consider designing or redesigning your service system to one that truly differentiates you from the pack . . . or would that be a sleuth?

Join me for the International Deming Conference in New York City on March 21 – 22.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for  Download free from “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at LinkedIn at

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