Quality Assurance and Customer Retention

This post originally appeared in 2006 on my blog, Non-Profit Concerns.

Former GE CEO Jack Welch made many things famous, not least of which is the quality assurance program knows as Six Sigma. As explained by Martin Kihn in the September 2005 issue of Fast Company, “Sigma is the Greek symbol used to denote deviations from the mean. And so Six Sigma is essentially a set of procedures and tools designed to measure and analyze ‘defects’ in a process and help determine what’s causing them. The goal – the ‘six sigma’ part – is 3.4 defects per million, or 99.997% perfection.”

Ever wonder how the Japanese took over TV, stereo, electronics and automobile production from us? In the US manufacturers were willing to accept 5% rejects per million. In other words, for every 1 million anything that was Made in America, 50,000 would be no good. The Japanese lowered that number to 200 and gained industrial leadership. As Jay Levinson notes in Guerilla Marketing, “Every error that could possibly be construed as a mistake was noticed by people actually hired by industry to count mistakes. In the category of mistakes included shoddy workmanship, tardiness, breaks that lasted too long, minor flaws in detail work, low morale, and anything at all that impeded production.”

So how many errors does your organization make? How can you implement a Six Sigma program at your agency?

How often do you send out a mailer that is improperly folded? How many of your employees arrive at work late (begin the day eating breakfast) and leave as the clock strikes five? How often do staff go out shopping on their lunch hour and return, purchases and food in hand, and then take an additional 20 minutes to actually eat lunch? How many typos are there on your publications? How proud are your staff of where they work? How much bureaucracy do you have which stifles creativity?

J. Edgar Hoover had a rule that phones had to be answered by the third ring. If I call your offices, how long is it going to take for the phone to be answered – dare I dream? – by a real person?

How long does it take for a receipt to be sent to a donor? How long does it take for a stock letter to arrive?

Here’s one: How much failure do you encourage? Do you let your staff try new things? Do you celebrate the attempt, regardless of the results? Do you see failure as a learning experience? At IBM a manager was given $10 million to start a new program. After a year the attempt was a total failure. He went to his boss and offered his resignation. His boss refused to accept it on the grounds that they had just spent $10 million educating him!

Of course it does not need to cost anything, let alone millions, to get it right. It is all a matter of recognizing for whom you really work.

When working at a nursing home, a colleague and I made a presentation at the Greater New York Hospital Association. In passing she mentioned something about working closely with hospital discharge planners and I said something about having stories about the home appear regularly in the local newspapers. They were just passing remarks of seemingly no great importance.

After the formal presentation was over, she was asked how long it took her to respond to a request from a discharge planner. She said about 10 minutes. I was asked how often stories about the home appeared in the newspapers. On average it was 15 times a month.

Our colleagues were shocked. And so were we. One hospital discharge planner said that he was happy if he got a response for a request for a bed in two days. One community relations director said that her boss was thrilled if she got them into the paper once a month. They wanted to know the secret:

There is a saying in the Talmud, Know before whom you stand. In other words, know who your clients are.

The nursing home where we worked was a good nursing home. It had been before the new admissions director arrived, and was after she arrived. But her predecessor could only keep the occupancy rate a few points above 90%. The new director had us at 99%. Same nurses, same certified nurse assistants, same doctors, same therapists, same housekeepers, same maintenance staff, same food, same everything. What was the difference? Her predecessor felt that her clients were the potential residents and family members. The new director saw the discharge planners as are her clients. Instead of going to the hospitals to interview patients, family members, doctors and nurses, she stayed at her desk to answer the phone when the discharge planners called.

As for press coverage, colleagues at other facilities told me that their bosses had them sending out long press releases going into great detail about this that or the other thing that was happening at their facilities. For them, their bosses were their clients. Not for me. I explained to the boss that we had little control over what actually happens to our press releases. The longer they are, the more editing will be needed and the more mistakes will be made. So all I would do is send out a 3 to 4 paragraph press release with a photo. Basically, they were fillers – photos with long captions. That is what my clients, the newspaper editors, wanted. And what my boss really wanted was to see the home being recognized in the press.

Remember, your clients are not your bosses and board members. They are only the ones who hire and fire you! Your real clients are the persons who allow you to succeed at your work. They may be donors. They may be hospital discharge planners. They may be newspaper editors. They may be politicians. They may be organization members. They are the ones who utilize your services and the ones whose cooperation you need. Whoever they are, if you keep your clients happy, your bosses will also be happy. And the secret to doing that is quality assurance. There are literally thousands of other nonprofits to where they can turn. Don’t encourage them by being sloppy.

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