According to the Research Institute of America, 90% of dissatisfied customers will not come back or buy again.  90%.  And yet we see service breakdowns in every type of organization pretty much every day.  In a time where good customer service may be the difference between keeping and losing a customer, why are there so many breakdowns?  And since so many organizations have cut so much the last two years, are we setting ourselves up for deteriorating service in the future?

We all have service disaster stories to share, so I’ll offer just one.  When my wife and I got married in the mid-90s, we went out for dinner about a week or so before the wedding – kind of a last-time-we-go-out-as-singles date.  We had a great dinner, paid by credit card, and went on our way.  Unfortunately – and I’ve only done this two or three times in my life – I left my credit card at the restaurant.

The next afternoon (Sunday), I called the restaurant but they had not seen the card, so of course, I called the credit card company to report the card lost.  They immediately cancelled the card and promised to re-issue one with a new account number the next day.  I told them that I was getting married in five days, and that I really would like to take their card on my two-week honeymoon (of course, I wanted to get the bonus airline miles for all of my travel expenses!).  They said it was no problem, that my card would be processed tomorrow, Monday, and overnighted to my home to arrive on Tuesday.

So far, so good.

But two days pass and no card arrives.  So I call them.  I get an apology, which was helpful, but the explanation was less than helpful and certainly not reassuring.  “I’m sorry, sir, but for some reason, your order was not processed on Monday like it was supposed to be.”  No kidding.  And why didn’t you notice it before the customer did?  “It must be something on our end.”  No kidding.  I reminded her that I really wanted the card before my wedding on Saturday and my two-week honeymoon that began Sunday.  She said that she’ll put the order in that day, it would be shipped tomorrow, and I’d receive it overnight the next, which would have been Thursday.

Thursday comes, and again no card.  Now, I’m getting frustrated.  So I call again.  Obviously, a different rep who is furiously trying to read the now-growing history of comments on my account.  “I’m terribly sorry, sir, but we had a major IT system issue last night, and all cards that were to be processed where not.  We’re back on-line and your card will be cut today, overnighted today, and you’ll receive it tomorrow.”  I reminded him that time was running out, and I’d like my card before my wedding and honeymoon.  “You’ll get it on Friday,” he assured.

Friday comes; no card.  Now, I’m getting angry.  This time, the rep had no explanation and was a little surly about it: “I have no idea why your card didn’t arrive today, sir.  The system says it was cut yesterday but I don’t show that it went out. It must be a shipping issue and not the bank’s fault.”  I asked for her supervisor, who, after reading my comment file (he must have because it took about 7 minutes for him to come to the line), was a bit more apologetic: “I’m really sorry, Mr. Lassiter, but we don’t know why your card didn’t arrive today.  It left our bank by XYZ Shipping yesterday but our records show that no one has yet signed for it.”  No kidding: that’s because it hasn’t yet arrived.

I calmly, but firmly told him that I’ve been dealing with this issue all week and that I really didn’t care who’s issue it was but that I wanted the card by tomorrow or I’d be forced to take a competitor card on my two-week overseas honeymoon.  He promised to cancel the new card that was apparently flying around the country, and a new card with a new account number would go out immediately for Saturday special delivery at the hotel at which our wedding reception was to be held.  I thought that was a good gesture, but I had no confidence that it would arrive…

Which it didn’t.  I got married, had a wonderful trip in Australia, spent $6000 on another company’s credit card, and didn’t think of the issue again until I returned home.  Which is when I wrote a three-page letter to the bank president explaining the breakdowns – the IT issue, the shipping issue, the service rep attitude issue, and so forth.  I told him that I was dissappointed not to have earned 6000 affinity miles on my favorite airline, and that not only did I hope his bank “learned something” from losing the hundreds of dollars in merchant fees, but that I hoped he could repair the relationship damage by issuing 6000 frequent flier miles to compensate for my loss.

No answer.

You see, this story could have had a happy ending if not for multiple service breakdowns in multiple delivery processes.  But as it turned out, the company lost hundreds of dollars in fees from my using a competitor card on my trip, and – more importantly – lost a significant amount of goodwill with me and with everyone else since to whom I’ve told the story.

But this happens all of the time.  Consider these data, compiled in a study conducted by the Research Institute of Amercia for the White House Office of Consumer Affairs (originally published by Harvey Mackay earlier this year):

• 90% of customers dissatisfied with the service they receive will not come back or buy again.
• Only 4% of unhappy customers bother to complain (I guess I was in the significant minority for taking the time to share my feedback with this credit card company).  For every complaint we hear, however, 24 others go uncommunicated to the company.  Imagine that.  So, in theory, if you have 10 complaints in a month, that means that potentially 240 customers also have complaints but just didn’t share them with you.  But they did share them with others…
• Unhappy customers tell his or her story to at least nine other people (I just told mine to over 9000).
• Of the customers who register a complaint, between 54-70% will do business again with the organization if they complaint is resolved.  That number goes up to 95% if the customer feels the complaint was resolved quickly.  This is commonly referred to as “service recovery”: we all make mistakes, but it’s how quickly and thoroughly a company resolves those mistakes that determines whether a customer will remain loyal and engaged.
• 68% of customers who quit doing business with an organization do so because of company indifference.  In other words, if you don’t respond and/or resolve a customer-related issue, your customers perceive that as not caring about their business.  And it takes 12 positive incidents to make up for one negative incident in the eyes of customers.

We hosted a half-day workshop on customer service last month, featuring Bryan Williams of BW Enterprises (and a former leader with the Ritz-Carlton hotel chain, an organization world renowned for their extremly high levels of service).  Bryan referred to the concept of customer touchpoints.  His definition: “a touchpoint is any moment of interaction between two parties.  If I pass you in the hallway, that’s a touchpoint; when you answer the phone, that’s a touchpoint; when you open the door for someone, that’s a touchpoint.”  (See “Engaging Service: 22 Ways to Become a Service Superstar,” Bryan Williams, 2009.)  When you think about it, every employee within every organization – regardless of size and type – has literally dozens if not hundreds of touchpoints every day.

Bryan goes on to state that every touchpoint has either a deposit or withdrawal (I love the analogy, especially given my credit card story above).  So in the minds of customers, if the touchpoint is positively perceived, goodwill is created – a “deposit” is made for the longer-term relationship.  However, if the touchpoint is negatively perceived, goodwill is eroded – a “withdrawal” is made from (hopefully) previously-established goodwill.

So, according to Bryan’s concept, “if I’m an employee at Company X, and I pass two customers in the hallway without acknowledging them, that’s a withdrawal.  If I give eye contact and smile, that’s a deposit.  Better yet, if I give eye contact, smile, stop, give a greeting, and offer assistance, then that’s an even bigger deposit.” 

We are all asked to do more with less these days.  As the recession begins to ease, we’re left with leaner (meaner?) workforces that are trying to get the same or more work done with generally smaller staffing.  In my opinion, this is a recipe for disaster when it comes to customer service.  So I challenge us all to:

• Consider the touchpoints you have with your customers – the phone calls, the face-to-face interactions, the emails, and so forth.  And then proactively think about how you can make customer deposits with these interactions rather than withdrawals.  Consider doing this in a team or department meeting to get everyone on the same page and exchange ideas for better service touchpoints. 
• Identify processes that touch the customer – ordering processes, inquiry processes (like call/contact centers and your website), complaint and suggestion processes, physical space (your lobby, your “store”), and certainly service/product delivery processes – and ensure that each of these customer-facing processes is designed to ensure more deposits than withdrawals.  Then,
• Train staff to ensure that they are making more customer deposits than the occasional accidental withdrawal (remember it takes 12 positive incidents to make up for one negative incident in the eyes of the customer).
• Reward staff for their good customer service (and for service recovery).

These tips don’t only apply to retail, service-oriented businesses.  They apply to manufacturers, schools, healthcare providers, non-profit and governmental agencies.  Every organization has customers or stakeholders.  And every organization therefore has touchpoints that either make or break customers’ perception of the organization.  Remember, 90% of dissatisfied customers won’t come back: so there is a huge financial return for those organizations who truly focus on customers rather than just talk about customer service.

Yours in Improvement,

Brian S. Lassiter

President, Minnesota Council for Quality

Times are tough for all Minnesota organizations, which is why the Council’s mission of advancing continuous improvement and performance excellence throughout the state is more relevant than ever.  Our work supports schools, healthcare organizations, non-profits, and businesses.  Through a volunteer network of more than 140 leaders and professionals, we help make good Minnesota organizations better, making this a more productive, more competitive, more livable state.

Council stakeholders have a unique opportunity to support the Council’s mission on Tuesday, November 17, as part of the state-wide “Give to the Max Day.”  Through the new www.GiveMN.org, your online contributions will be partially matched by several foundations, including Bush Foundation, Minneapolis Foundation, Blandin Foundation, St. Paul Foundation, and United Way Greater Twin Cities (matches on donations up to $2500).

Matching begins at 8AM CT on Tuesday, November 17 and runs for 24 hours until 8AM Wednesday, November 18.  Just follow this easy process:

• Go to http://givemn.razoo.com/story/Minnesota-Council-For-Quality
• Click on the green Donate button at the right of the screen.
• Enter the desired donation amount and information, and click on the green “Donate Now” button at the bottom of the page. 

The Council works with over 300 members representing more than 150,000 employees and citizens of Minnesota.  We help leaders identify strengths and improvement opportunities and build networks that bring information, resources, knowledge, and best practices to organizations desiring to improve. 

“Those who know what, and those who know how, work for those who know why.”

Zig Ziglar

Good organizations today have specialists in Six Sigma, Lean, Baldrige, Reengineering, PDCA, and other techniques working to improve the performance of their enterprise.  They are excellent at knowing what to do and how to go about it, but they may not have a good appreciation for the system of quality, the theory behind their activities, and the rationale for why particular concepts, theories, and methods work.  In short, they don’t fully appreciate the “why” of quality and improvement.  In addition, they may not have the tools to effectively integrate process improvement frameworks with the strategy and culture of the organization.

The Minnesota Council for Quality, in cooperation with Process Management LLC and Lake Superior College, is pleased to offer a 2-day seminar on the history of quality and the theories of the American and Japanese masters of quality such as Deming, Ishikawa, Juran, Kano, and Crosby.  The workshop will be December 1-2 at Lake Superior College in Duluth.

This workshop will also focus on how improvement professionals can integrate their process improvement work in the context of their organization’s strategy and culture.  The session is a mixture of lecture, exercises, and demonstrations.

The workshop will be presented by Lou Schultz, a uniquely qualified expert who has enjoyed meeting all but two of the quality masters.  Mr. Schultz, author of Profiles in Quality, Learning from the Masters, has nearly 50 years experience – half in industry and half as a consultant.  He worked closely with Dr. Deming for 13 of those years.

This seminar is a must for executives or quality professionals who are now leading (or aspire to lead) performance improvement activities for their organizations.  Whether your organization embraces Six Sigma, Lean, Baldrige, ISO, Scorecard, another framework, or any combination of frameworks, this seminar will provide the context of quality -- the “why” quality is important.

Sure, there are many improvement frameworks and tools used by companies today.  But how do you improve an organization that doesn’t make products?  How do you improve an organization that doesn’t have a profit motive, but rather is motivated by mission and societal outcomes?  How do you improve an organization who’s customers are students and other stakeholders?  How do you systematically improve schools and other non-profits – the fabric of our society – using quality and improvement frameworks proven valuable for businesses?

The Minnesota Council for Quality is pleased to welcome Jill Reilly, president, and Heidi Foley, principal of the Academy of Holy Angels to our December 3 program, "Striving for Excellence in a Non-Profit: the Holy Angels Journey."  Jill and Heidi will reveal the challenges and the rewards, goals and processes, of implementing Malcolm Baldrige quality processes at Holy Angels, a Catholic, college-preparatory high school in Richfield and the recipient of the 2008 Minnesota Quality Award, Advancement Level.

Focused primarily on traditional school-based improvement models, a former Chair of the Board of Trustee’ challenged the school administration to pursue the Baldrige process in the school’s strategic planning initiatives.  In conjunction with a program introduced by the Minnesota Academic Excellence Foundation, the school began its own quest for excellence in 2003.  Through various stages of learning, writing, re-writing, and seeking consultation, the Academy of Holy Angels submitted and received recognition for its total-process approach to education.  But they are on this journey not to win awards, but rather to improve the education they offer their students, to improve academic and non-academic outcomes, and to reach higher levels of excellence in their enterprise.  These insights apply to all organizations regardless of purpose and type, so come listen to their story!

The discussion is from 8:00-9:00 a.m. on Dec 3 (networking and continental breakfast begin at 7:30 a.m.) at the Minneapolis Community and Technical College (MCTC), 1501 Hennepin (15th and Hennepin), downtown Minneapolis, Room L3000 (Wheelock-Whitney Library). 

Admission to PIN is FREE for Council members; $10 for partner organizations; $20 for the public.

Malcolm Gladwell’s 2001 book “The Tipping Point; How Little Things Can Make A Big Difference” describes a tipping point as “that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.”  How can organizations apply the Tipping Point concepts to their own business strategies?

The Minnesota Council for Quality is pleased to welcome Michael Zdychnec, CEO, and RT Donahue, president, both of Collaboration Health Care, Inc. to our December 9 program, "The Tipping Point: Solving Complex Issues like Healthcare Reform."  Michael and RT will lead an interactive discussion of how the “Law of the Few,” a sticky message, and maintaining the right perspective and context can create a possible “tipping point” in highly complex issues -- issues you face all the time in business, and issues we face in society.  Michael and RT will show how these principles apply to one of today's most complex (and controversial) issues: the health care reform discussion.

The discussion is from 8:00-9:00 a.m. on Dec 9 (networking and continental breakfast begin at 7:30 a.m.) at Metro State University, 700 E 7th Street, downtown St. Paul. 

Admission to PIN is FREE for Council members; $10 for partner organizations; $20 for the public.

Writing is the great equalizer in Corporate America: 98% of all professionals use what some call the “Rambling Rose” writing process – where people ramble as they type in the hope that something will get done.  The result is that they inundate the reader with background information, include too much detail, or not enough of the relevant details!  They hide key points within paragraphs of explanation and use ambiguous closings that leave the reader guessing about any action to take.

The Rochester Area Quality Council, an affiliate of the Minnesota Council for Quality, is pleased to announce their Dec 1 program “Writing to Get Things Done."  The session will be led by Stu Tanquist of the Berry Writing Group.

This session teaches people how to meet important deadlines and keep projects on target by writing emails, letters, and reports that get things done.  Over the past three decades, Writing to Get Things Done has improved the productivity of over 55,000 business and government professionals.  In this practical session, participants will learn how to impel others to take action by thinking and writing from the reader’s perspective.

The session is Dec 1 from 7:45-9:00 at RCTC. 

Due to the holiday, there is no Twin Ports Performance Excellence Network in December.  But mark your calendars for the January 19 meeting, featuring a discussion on the differences in workforce generations.  More information on will be announced next month.

Are you looking to improve your organization in these tough times?  Are you looking for a strategic planning consultant?  A consultant with Six Sigma, Lean, Balanced Scorecard, Baldrige, or ISO expertise?  A consultant or trainer on leadership Organizational Development, or change efforts?

The Minnesota Council for Quality -- in cooperation with the Delaware Alliance for Excellence, the Kansas Center for Performance Excellence, the Michigan Quality Council, the Ohio Partnership for Excellence, Quality Texas Foundation, the Vermont Council for Quality, the Washington State Quality Award, and the Wisconsin Forward Award -- is pleased to offer a free on-line service, the Consultant Referral Network©, to help organizations find experts to help them improve their business.

Located at www.consultantreferralnetwork.org, the Consultant Referral Network is a dynamic, web-enabled search tool that connects organizational improvement experts to client organizations seeking them.  This service allows clients to outline their needs in terms of subject matter expertise sought, type of assistance desired (consulting, training, coaching, speaking, or facilitating), sector/industry expertise required, size of consulting firm desired, desired location of consulting firm, and years of experience preferred.  The client can also weight the relative importance of each variable.  The tool will then identify up to five consultants or firms that best match the client’s needs.

Organizations can also peruse a directory of all consultants, sorted by subject matter expertise, location, and other factors. 

Using a unique blend of stories, tips, charts, and tables that can be adapted to any organization, “The Making of a World Class Organization” by E. David Spong and Debbie Collard shares the stories, wisdom, and “silver bullets” gained by two divisions of the Boeing Corporation as they won the Malcolm Baldrige Quality Award.  The “silver bullets” are the kernels of management wisdom that set this book apart and provide the simple insights that anyone can adopt.  This book uses a systems perspective to provide solutions that will inspire leaders to champion such approaches, while also providing tried and true details and “how-to” applications to the in-house practitioners and consultants.

Whether you are looking for tools and techniques to make your organization and processes more effective or you are starting from scratch, this book provides you with a set of proven approaches to achieving excellence.  The insights into excellence and the Baldrige journey that Spong and Collard have mastered have allowed their organizations to celebrate with great processes, loyal customers, engaged employees, high quality products and services, and significant profitability.

The book retails at $42.  But, in partnership with ASQ, Council members can purchase “The Making of a World Class Organization” at a special rate:

MCQ Member Price: $25 plus shipping

Non-member Price: $35 plus shipping

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The MNODN, an affiliate partner of the MN Council for Quality, is pleased to announce its next monthly program: “Caring Bridge: How this Successful Nonprofit Navigates through Uncharted Waters,” featuring Sona Mehring, founder/CEO.

When we think about management in the not-for-profit sector, we don’t usually hear the terms “fast-paced” and “nonprofit” used together.  Join us on December 1 to hear about CaringBridge’s past, present and future plans from its Founder/CEO and the Chairperson of the Board of Directors.  Learn the special organizational challenges this Minnesota nonprofit has, and continues to face, while helping millions of people in a health crisis.  CaringBridge provides a free website for those going through a serious health event to provide hope, healing and connection through their family and friends.  The organization has grown tremendously to serve more people – creating a lot of rewards but also a lot of challenges.   Those challenges are especially present in ensuring excellence in organizational development within a fast-paced nonprofit environment.

The Minnesota Chapter of Project Management Institute (PMI), an alliance partner of the Council, is pleased to announce a special full-day session: “Leading in Turbulent Times.”  The session will be held January 26.

You are sitting in your office taking a brief sanity break in a day filled with back-to-back meetings. There are stacks of papers and ''to read'' folders on your desk. Your Blackberry vibrates incessantly signaling incoming mail and you have more than a half dozen callbacks to make before going home. Just a typical day at the office…You’ve heard fellow businesspeople refer to ''being in permanent whitewater'' – this aptly describes your situation and what many experts predict will characterize the business environment for a long time to come. You have a strong desire to freeze everything just long enough to have time to think, to plan, to find the answers, to plot your course.

So begins a fun, engaging, and informative one-day seminar, designed to tap everything you already know about leadership and enhance it for leading in turbulent times!  We effectively mix hands-on, team discussion with research and best practices from leadership and complexity science, to help you navigate your organization through these tough times.

• Typical Seminar Schedule
• Introduction to the complexity landscape
• Individual and Team Scenario
• Scenario debriefing based on research and best practices
• Focus on key leadership strategies for uncertain and turbulent times
• Putting it to work: Planning your next move back home

The session will be facilitated by Anne Knapp, PhD, HSDP, of Ready for Change, LLC and Catherine Perme (Cathy), M.A., HSDP of C. M. Perme & Associates, LLC.  

The Association for Strategic Planning-Minnesota Chapter, an alliance partner of the MN Council for Quality, is pleased to announce its next meeting: “Adaptive Action: Beyond Strategic Planning.”  The session is facilitated by Glenda H. Eoyang, PhD, Founder and Executive Director, Human Systems Dynamics Institute.

In today’s global, interconnected, and turbulent business environments, traditional strategic planning approaches which rely on assumptions about stable markets and predictable futures are shaky at best.  Adaptive action provides a clear alternative with principles and practical tools to help you and your clients build your adaptive capacity.

Enterprise Minnesota, formerly Minnesota Technology, Inc. (MTI) and a partner of the MN Council for Quality, is pleased to announce several events, all focused on using Lean or other methods to improve organizational performance:

Dec 15: Business Problem Solving, Roseville

Dec 16: The Next Generation of Lean, Mankato

The MN Healthcare Quality Professionals, an alliance partner of the MN Council for Quality, is pleased to host a (free) monthly webinar seminar series.  The series, hosted by MHQP and HealthForce Minnesota, is a monthly "quality in the trenches" brownbag education series.  The objective of these sessions is to provide a healthcare quality "survey course" using selected materials from the National Association of Healthcare Quality (NAHQ)'s Certified Professional in Healthcare Quality (CPHQ) preparation materials. 

Upcoming webinars include (over the lunch hour):

11/19      Baldrige, Magnet, TJC: Could I Do All Three?

12/17      The Relationship of Quality and EHR Informatics

The intended audience includes healthcare quality professionals who want a re-grounding in the breadth of their profession, and clinicians who want to learn more to become champions of change.  MHQP especially wants to reach out to healthcare professionals in rural/outstate Minnesota who don't get many quality education opportunities.

South Central College is pleased to announce their fall quality and performance improvement curriculum.  Council members are entitled to a 10% discount.

The following courses will be held at the Faribault campus (prices before member discount):

11/19/09, Project Management , 8a-4:30p, $235

12/2/09, Calibration Processes, 8a-12n, $125

12/2/09, Calibration of Dimensional Gages, 12:30-4:30p, $125

12/3/09, Gage Repair, 8a-4:30p, $235

12/15-16, Intro to Quality, 8:00-4:30, $445

The following courses will be held at Mankato campus (prices before member discount):

11/18, Problem Solving Tools & Methods, 8a-4:30p, $235

12/1, Introduction to Lean Application, 8a-4:30p, $235

12/2, Understanding & Implementing ISO 9001, 8a-4:30p, $235

12/3 Internal Auditor Skills, 8a-4:30p, $235

The Universty of Minnesota’s College of Continuing Education, an alliance partner of the Council, is pleased to announce their fall improvement and business courses.  Council members receive a 10% discount on all CCE courses.

11/18, Developing Leadership Skills, $750

11/19, Increasing Power and Influence through Listening, $395

11/20, Project Control and Closure, $395

12/01, Writing for the Web, $395

12/01, Technology for HR Management, $395

12/02, Coaching for Excellence, $395

12/03, Exercising Organizational Influence, $395

12/08, Process Innovation, $995

12/09, Project Management Foundations, $395

12/09, Certified Internal Auditors (CIA) Test Preparation – Part 4, $395

12/10, In-depth Coaching: Leading Individual Change Intervention, $750

12/15, Writing Business Reports, $395

12/15, Capstone in Supervision, $750

12/15, Capstone in Management, $750

12/15, Verbal and Nonverbal Communication, $395

12/15, Business Acumen for HR Professionals, $395

The University of St. Thomas’ Executive Education and Professional Development, a partner of the MN Council for Quality, is pleased to announce the following upcoming programs:

1/4 – 1/14 Six Sigma Green Belt Certificate, $3795

1/25 – 2/28 Lean Six Sigma Black Belt, $8200

3/26 – 4/10 Six Sigma Green Belt Certificate, $3795

2/22 – 5/17 Mini Master of the Lean Enterprise, $2495

Also, coming in the fall of 2010: Mini MBA for Technical Professionals and Mini Master of Supply Chain Management.

MCQ members qualify for a 15% discount. Use VIP Code Quality2010 when registering.  To register or for more information, visit http://www.stthomas.edu/execed or call 651-962-4600.

Normandale Community College, an alliance partner of the Council, is pleased to announce upcoming fall programs.  Council members receive a 15% discount.  The programs are as follows:

11/19 Value Stream Mapping, $345

12/3 Lean Leadership, $345

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