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    I am now using this blog to re-post some comments I make other blogs. For my full management blog see the Curious Cat Management Blog

    Tuesday, May 16, 2006

    The Customer Knows Best?

    Topic: Management Improvement

    The Customer Knows Best? Better Think Again by Anthony W. Ulwick

    It's important to listen to customers - but not follow their words without skepticism. Ask them to design your next product and you're likely to miss the mark, suggests this Harvard Business Review excerpt.


    Excellent point. Some management ideas are pretty easy and straight forward. But many management practices require knowledge and judgment to apply them successfully. Easy solutions may be desired, but, often you must choose between easy and effective (hint, I suggest effective is the better target).

    Listening to customers is important but it is not sufficient. W. Edwards Deming made this point emphatically on page 7 of the New Economics:

    Does the customer invent new product of service? The customer generates nothing. No customer asked for electric lights... No customer asked for photography... No customer asked for an automobile... No customer asked for an integrated circuit.


    The article by Anthony Ulwick explores how to structure the communication with customers in order to develop products that will be successful. I agree with some of the points of the article. I think, like many such article, it leaps to conclusions that are not supported by the evidence presented.

    The results of using the outcome-based methodology speak for themselves. Between 1994 and 1995, Cordis introduced 12 new angioplasty catheters and saw its market share in interventional cardiology grow from less than 1% to nearly 10% in the United States; market share approached 18% in Japan, 20% in Europe, and 30% in Canada. Net sales shot up 30%, and the company's $50 million cash position allowed it to reach into new markets.


    No, results do not speak for themselves. In most cases there are many factors that impact the results. I see no reason to believe that this methodology was responsible for those results. It may provide an example of the paring of the use of this methodology with success. That may support an argument for the value of this method but that is as far as you can go without showing direct evidence of causation - which would require theory that could be tested.

    Enron's CFO was the CFO of the year according to CFO magazine - as were WorldCom and Tyco's. People could assume the numbers at Enron proved what Enron was doing was correct. But it did not prove that. Until we start to evaluate data more accurately we will continue to mistakenly see proof where it does not exist.

    Seth Godin recently posted an excellent note on customer focus: But the focus group loved it.

    A properly run focus group is great. The purpose? To help you focus.

    Not to find out if an idea is any good. Not to get the data you need to sell your boss on an idea.

    No!

    Focus groups are very bad at that.


    Customer focus is important but at times management must ignore the claims of customers. One of the jobs of management is to know which is needed at a given point.

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