Seek value, not quantity

For my Quality Management course at the university, the professor used a restaurant’s business model to explain the concept of value stream mapping. According to him, value for the customer would come from reduction in the overall cycle time – From the time the order is placed to the time the customer gets the food on the table to the time the customer pays the bill and leaves. He argued that it was a win-win situation since the customer’s hunger is satisfied and the restaurant is able to maximise the potential of a limited resource i.e. seating area.

Now although it sounded logical, I did not completely agree with it simply because I have been in the customer’s shoes. The logic above would be true if hunger was my sole motivation. However, I have been to restaurants to have an evening out & spend some quality time with girlfriend/family/friends. I would have actually been annoyed at a rapid fire quick service because it would have given me lesser time to soak in the ambience, speak to people, sip my drinks and have a relaxing time. On an evening out, I would rather have the restaurant focus on catering to my needs rather than focus on getting me out of the door.

So how does the restaurant make money off me given that my longer stay at the table has reduced the total footfall ? There is another metric in the restaurant business called the ARPU – Average revenue per user. To balance the reduced footfall, restaurants maximise the average revenue earned per customer. This is achieved through consultative selling of higher margin products such as wines and desserts.

Now lets tie this back to the software development process. Stories, in the context of lean, often get treated as inventory and cycle time is defined as getting a story from definition to development. There is a focus on reduction of this cycle time because it maximises the number of stories that can be delivered. However, it would be foolish to believe that more stories delivered is the same as more value delivered.

Customers seeking to build custom software applications are often unclear about what they really need. They often go along paths which yield them wrong results. They often break their own model and come back to square one. Ultimately, they learn enough to know what they really need . It is these really valuable stories that finally get delivered. It may take them longer to get there and wasted effort may occur along the way, but the end result is far more satisfying and valuable. The more time and chance the customer has to discover what they need, the more valuable the end product is for them.

Its more important to focus on maximising business value delivered, not more stories.


Customer service

Joel Spoelsky has an excellent post on customer service

I would add two more things to the list

  1. If you are going to do something in the name of customer service – then mean it
    A colleague bought Tesco’s 200 g of roasted peanuts that supposedly contained only 150 calories. Its this new fad amongst superstores to write nutritional facts on the packaging so that customers can make rational choice. However, on close inspection, you could see a small print which actually said the nutritional information applied to only 1/8th of the pack.If you are going to put small print, you are not really helping the customer. In fact, you are doing the exact opposite.

    Conventional wisdom would have told him that peanuts are very calorific, but he ended up buying it because he was misguided.

    Congratulations Tesco !! You have earned the distrust of your customer for life because of your cynical approach to providing him with a “rational choice”

  2. Treat your customer facing employees with respect
    I was at M&S making my purchase at the till, when the manager came around. Apparently, the tiller had requested for a short break earlier and the manager came back with her records. She reprimanded him for making the request, and told him that his next break can only be taken after a period of 3 hours, as specified in his contract.

    The result – An embarassed and fuming tiller retaliated through a slower than normal service and making sour faces at customers.

    Now I dont know the working practices in M&S, but I am willing to bet there was a better way to handle the whole incident. If the purpose in refusing the short break was to ensure smaller queues, then it was defeated right there and then.

Take the agility test

Michael Hugos has come up with an agility test for the IT executive.

Take it. Get your clients and colleagues to take it. Compare notes. Learnt anything new ?