Quality and Customer Loyalty Goals

This article is part of an on-going series on Customer Loyalty and Customer Satisfaction

Customer loyalty can be defined as a bond between a supplier and target customer, reflected by the customer’s consistently spending most or all of its entire budget on the supplier. Two important aspects of this very simple definition deserve elaboration. Retaining a customer by no means results in getting all, or even most of its budget. Managers often think they do not have a customer loyalty problem because the names on the customer list have not changed in ten years. In our experience, these same managers inevitably find their businesses would be more than twice the current size were they to win the entire budgets of their existing customers for competing products or services.

The second important aspect of the definition above is the “target customer” part. In fact, there are certain customers whose business, let alone loyalty, you do not want. The story of two general merchandise retailers is a case in point. Analysis showed that very seasoned customers of Company A, the historical market leader, (now number two in the industry) became proficient at scanning the Sunday papers for specials, and would essentially “cherry pick” the retailer of low price/low margin merchandise. While Company B, the (then) number two competitor retained customers at a lesser rate, their customers: (1) bought a desirable mix of merchandise; (2) paid twice as many visits per…

Leading the Innovation in Aviation – Airbus, Boeing, and Embraer

Airbus, Boeing, and Embraer have recently signed a memorandum of understanding to collaborate on the development of drop-in, affordable aviation biofuels. These three major airframe manufacturers agreed to seek collaborative opportunities to speak in unity to government, biofuel producers, and other key stakeholders to support, promote, and accelerate the availability of sustainable new jet fuel sources. The significance of this agreement is substantial, considering the size and scope of these organizations. In addition to this collaboration, these airlines are taking initiatives across the board to reduce emissions, increase efforts dedicated to societal responsibility, and slash waste; all of which can be found within the Baldrige Criteria.

“We’ve achieved a lot in the last ten years in reducing our industry’s CO₂ footprint – a 45 percent traffic growth with only three percent more fuel consumption,” said Tom Enders, Airbus President and CEO. “The production and use of sustainable quantities of aviation biofuels is key to meeting our industry’s ambitious CO₂ reduction targets and we are helping to do this through Research & Technology, our expanding network of worldwide value chains and supporting the EU commission towards its target of four percent of biofuel for aviation by 2020.”

While committing to substantial developments in the biofuel sector, these airframe manufacturers are also attempting to raise the bar through increased R&D efforts and development of value chains. Airbus is set to invest 2 billion Euros towards environmental research and development this year,…

Key Elements of Employee Engagement

We’ve written frequently about the value of employee engagement on bottom results (here and here, for example) and how to engage employees (here and here). The second part of the fifth category of the Baldrige model is titled “Workforce Engagement.” It asks about key dimensions of employee engagement including culture, performance management, learning and development, and career progression. It also asks “how you determine the key elements that affect workforce engagement?”

Lonnie Wilson has been teaching and implementing lean and other culture-changing techniques for more than 40 years. His recent article in IndustryWeek, “Find the Missing Pieces in Your Employee Engagement Effort,” provides some context for that Baldrige question by listing five key elements necessary to engage employees—and keep them engaged:

• A sense of meaningfulness. Wilson poses a Baldrige-esque question: “Do [employees] understand the company mission and vision to represent a company that seeks to be competitive, thriving, growing, a company that not only makes money but gives back to the employees and it a good corporate citizen?” And do they believe their jobs serve that mission and vision?
• A sense of control. Do employees have ways to control what and how they do things or do they check their brains at the door every day?
• A sense of accomplishment. Can employees codify and quantify their contribution? Can they answer the question: “How did I (we) do today?”
• A sense of growth. Do employees have ways to learn, grow, and contribute as individuals?…

Developing the Elements of Strategic Planning and Deployment (A 2-Part Series)

Part I

Establish a Vision

Strategic deployment begins with a vision that is customer-focused. In the organizations we know that are successfully making the transition to a more collaborative organization, the key to success is developing and living by a common strategic vision. When you agree on an overall direction, you can be flexible about the means to achieve it (Tregoe and Tobia 1990).

“Really powerful visions are simply told. The Ten Commandments, the Declaration of Independence, a Winston Churchill World War II speech – all present messages that are so simple and direct you can almost touch them. Our corporate strategies should be equally compelling.”

A vision should define the benefits a customer, an employee, a shareholder, or society at large can expect from the organization.  Here are a few examples:

• Samsung, the world’s largest manufacturer of high-quality digital products is guided by a singular vision: “to lead the digital convergence movement.” Samsung believes that through technology innovation today, we will find the solutions we need to address the challenges of tomorrow. From technology comes opportunity – for business to grow, for citizens in emerging markets to prosper by tapping into the digital economy, and for people to invent new possibilities. It’s our aim to develop innovative technologies and efficient processes that create new markets, enrich peoples’ lives, and continue to make Samsung a trusted market leader.
• Sentara Health: We have commitment to grow as one of the nation’s leading health…