Defining and Creating Success The 2003 DOE Contractor Travel Managers Meeting Michael O. Mosby Lawrence Livermore National Laboratory April 15, 2003

It Has Become Critical for Organizations to Validate Their Existence Through Proper Performance Management and Measurement Systems “ If you work just for the money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.” Ray Kroc, Founder of McDonald’s First McDonald’s restaurant opened April 15, 1955

How Would You Answer the Following Question? How Do You Know Your Organization is a Success? How would you prove your success? What evidence would you use? If your existence was predicated on demonstrating success, would you survive?

Organizations with a High Customer Satisfaction (Success) Level Excel Facts from the American Customer Satisfaction Index (ACSI) Facts from the American Customer Satisfaction Index (ACSI) “The top 50% of ACSI companies have generated much more shareholder wealth than the bottom 50%” “The top 50% of ACSI companies have generated much more shareholder wealth than the bottom 50%” Changes in customer satisfaction don’t merely shift consumer preference from one company to another, but they also affect the general willingness of households to buy.” Changes in customer satisfaction don’t merely shift consumer preference from one company to another, but they also affect the general willingness of households to buy.” Taken from Quality Progress magazine, February 2003, “Boost Stock Performance, Nation’s Economy,” written by Claes Fornell

Being Able to Define “Success” in an Unambiguous Manner Has Become Crucial to the Survival of Organizations How Do You Define “Success?” There are very important questions that must be answered before you can begin to get your arms around it. How Do You Define “Success?” There are very important questions that must be answered before you can begin to get your arms around it. What is the purpose of your organization? What do your customers think is the purpose for your organization? What do your customers hope to achieve by working with you? Who are your real customers? Who has the power to change the design of your products? What do you do? Knowing what you produce, who you produce it for, and what they want empowers you with the opportunity to define “success.”

When Attempting to Define “Success”, Begin by Identifying Outcomes Why begin at outcomes? “This business trip will take you less than 30 minutes to book!” – Performance Expectation “This business trip can be booked quickly!” – Perception Expectation “You will have a successful business trip!” – Outcome Expectation

“Welcome to Princeton Travel, How May I Make Your Trip Successful?” Internal Assessment Internal Assessment Organizational Outcomes Organizational Outcomes Vision Statement Vision Statement Mission Statement Mission Statement Target Products Target Products Customer Groups Customer Groups Everyone on the left side of the room are employees of Princeton Travel Everyone on the left side of the room are employees of Princeton Travel Customer Assessment Customer Outcomes Customer Expectations of Target Products Identification of Target Products Everyone on the right side of the room are customers of Princeton Travel

Determining Outcomes Helps Organizations Find and Hit the Mark in Delivering Satisfaction Please complete the following phrases from your point of view (customers and employees): Please complete the following phrases from your point of view (customers and employees): “A Successful Princeton Travel Organization Will Result In __________________.” A Successful Princeton Travel Organization Will Not Result In _________________.”

Products are the Meeting Place for Customers and Producers Producers produce products for customers to use to achieve a desired outcome Producers produce products for customers to use to achieve a desired outcome PROCESS PRODUCTPRODUCT OUTCOME

Customers Play Different Roles Depending on Their Relationship to the Product Customer Roles: Customer Roles: End User – Personally uses the product Broker – Doesn’t personally use the product, but passes it along to someone who will Fixer – Fixes, repairs, modifies the product for the benefit of the end user Who has the power to change the design of the product? Who has the power to change the design of the product? Who should have the power to affect change in the design of the product? Who should have the power to affect change in the design of the product? How do you empower end users? How do you empower end users?

When Gathering Information from Customers, Remember that Wants, Expectations, and Needs are Different 3 Simple Phrases to Determining Customer Priorities: 3 Simple Phrases to Determining Customer Priorities: A Satisfying (Product) Results In ________________. (WANTS) A Satisfying (Product) Is ____________________. (EXPECTATIONS) A Satisfying (Product) Has ____________________. (NEEDS)

A Performance Management and Measurement System to Define and Create Success Can Now Be Developed in Partnership with Customers 1. Align Organizational and Customer Outcomes 2. Determine Target Products that have the Highest Impact on Customer Satisfaction 3. Determine Measures Based on Information from Customer Focus Groups and Partnering with Customers 4. Identify Key Internal Processes that Support the Priority Measures – Operational Leading Indicators 5. Partner with Customers to Establish a Feedback System, e.g., meetings, surveys, user groups, etc. 6. Identify Initiatives to Improve Performance (Including Cost Efficiencies) 7. Develop Workplace Measures for Organizational Agility, e.g., training and development, safety, etc.

Let’s Compare Our Model to the LLNL Travel Services “Gauge” Model

McDonald’s Became #1 in the Fast Food Industry by Concentrating on Outcomes Ray Kroc defined “success” as Quality, Service, Cleanliness, and Value for a customer that wanted to eat not to dine! Ray Kroc defined “success” as Quality, Service, Cleanliness, and Value for a customer that wanted to eat not to dine! Mike Roberts, President of McDonald’s USA Mike Roberts, President of McDonald’s USA McDonald’s still holds #1 market share in the fast food industry with 30,000 restaurants in 118 countries serving 46 million customers a day! McDonald’s still holds #1 market share in the fast food industry with 30,000 restaurants in 118 countries serving 46 million customers a day! Go and Do Your Own Investigation on Defining and Creating “Success”! Go and Do Your Own Investigation on Defining and Creating “Success”!