LSD Lean Train

Many people will open up the training page and expect to see it laden with tools and approaches to create QFDs and Value Stream Maps. My approach is a little different; we need trained on why we do what we do and then through the balance of the week we will discover the what and the how of what we do! If we start with the Why – who better to explain it than Simon Sinek.

Simon Sinek has a simple but powerful model for inspirational leadership all starting with a golden circle and the question “Why?” His examples include Apple, Martin Luther King, and the Wright brothers — and as a counterpoint Tivo, which (until a recent court victory that tripled its stock price) appeared to be struggling.

In 2009, Simon Sinek released the book, Start with Why: How Great Leaders Inspire Everyone to Take Action -a synopsis of the theory he has begun using to teach others how to become effective leaders and inspire change.
When developing a service design you must be able to articulate the value of it. The first step is determining why you do it. In this enclosed worksheet worksheet, complete the three step process for one of the previous determined service products from the previous lesson. If you are the adventurous type complete it for several for he other service products.

When we use money as the premise for value, “What a customer is willing to pay for” makes sense. We certainly pay for the value of a Ferrari. Using this argument, money can be the determining factor of value. However, something about it rubs me wrong and by the way; I am a capitalist at heart, so it is not the warm and fuzzy stuff that is causing me to think this way. The term is widespread but in present day scenarios, I think fundamentally flawed. We live in a world that has excess supply, and as a result we have to start viewing the market from the demand side. So the connotation what a “Customer will pay for” is problematic for me since it seems to be from an internal focus. The term stems from the process improvement mindset of the 90’s and has stayed with us through the Customer Experience decade. Now as the User Experience decade is upon us, it is simply not useful anymore (excuse the pun).

Many organizations justify improvements by using the word value and customer, internal or external. In fact, the process at times becomes more important than what the customer values. If it is not tied to the marketplace and improvement shown there, why should you do it? The other problem is that someone shows how much savings they create (Cycle Time, Space, etc.) when, in fact, there was none. I equate it to politicians when they slow down the growth of government spending and proclaim it as a cut in spending. What purpose does creating internal value serve without a demand for utilization? Should value not be perceived and created from an outside-in approach versus an inside-out approach? Is that not what pull is all about?

A goods dominant marketing logic arguably limits the mind-set for seeing the opportunities for co-creation of value with customers and other stakeholders of the firm. In a similar way, a transactional exchange view ignores customer loyalty and puts constraints on developing the lifetime value of the customer to the firm. The S-D logic proposes broadening the logic of exchange, both social and economic. – Lusch and Vargo Marketing Theory, 2006

I have seen a significant shift in the concept of value. Facebook, Twitter, LinkedIn, Craigslist, software companies and others that allow “use” free of charge. It is not a free trial offer. We derive value from it. If we want to extend that value or increase it we pay; Ads, users, membership, etc. Value is something (product/service) that someone uses. For example, if I download software or buy a book but do not “use” it, it has no value even though I purchased it.

It is in the use of the product/service that value is derived. I think of value in 3 ways: Functional, Emotional, Social. Thinking of a Ferrari (example from my esteem colleague Graham Hill), I use it to drive (functional), makes me feel good (emotional) and what others think – I am successful (social). All provide value but without the latter two, I could buy a bike. Using this as a guideline, value (Functional, Emotional, Social) is embedded in the use of the product rather than the price.

Forrester predicts that by 2012 half of all consumer purchases will either be transacted online or driven by online research and word of mouth. To succeed in the digital marketplace, it’s no longer customers that matter most, but users—anyone who interacts with your company digitally. Keep users happy, and customers follow.

If we only leave price be the governing factor, would value only be a commodity? I think it is more about users and the use of the product that determines value, Facebook being a prime example.

Today’s most successful companies organize their business around users and building user satisfaction,” writes Aaron Shapiro CEO of digital agency HUGE in his book Users, Not Customers: Who Really Determines the Success of Your Bus….

Today’s most critical driver of success is usability excellence. Users will be your growth engine for your customer base and for your entire organization!

We will discuss Service-Dominant Logic.

Anne Morriss, the best selling co-author of Uncommon Service says,

We live in a world where lots of organizations want to deliver great service. We work with managers all the time, who are committed to it. Customers, as we know, are hungry for it, and yet, our service experiences are still overwhelmingly negative. In pursuing this question, what became clear is that past excellence is not necessarily intuitive. It’s not about trying harder, deciding the customer is always right. It’s more about making careful design choices and very deliberate tradeoffs. There are some surprising rules and pitfalls along the way. We wanted to get some of those insights out in the world because we think, basically, the world is ready for it.

This is an excerpt from the Business901 podcast with Anne. In the podcast, we discuss the four universal truths outlined in the book for delivering uncommon service:

  1. You can’t be good at everything.
  2. Someone has to pay for it.
  3. It’s not your employees’ fault.
  4. You must manage your customers

The book’s website is an excellent resource and I encourage you to take the survey and utilize the Service Design Tool (free if you give up your email) located there. This is a very challenging perspective for most of us. However, I think you will find the information to be well researched and presented in a compelling fashion.

In today’s exercises, we have made a subtle shift from thinking about service product from an inside-out perspective to an outside-in perspective.

Complete the Sheets and go to the next page; Lean/Explore


Recommended Reading/Listening

Uncommon Thoughts about Service



Developing an Outside – Strategy



Escape the Improvement Trap



Managing Value Streams/Nature of Value