This mistake really isn’t anyone’s fault. Our leadership fosters this misconception, usually to simplify the discussion. But internal customers don’t pay for our services. They don’t pay for the wastes in our systems. In fact, many times, they can cause the very wastes we should be removing. Misinterpreting the role of internal customers is quite often a root cause of many of our problems!

Well, if teams are wrong about who the customer is, just who are they? In a lean sense, we speak of waste as ‘system tasks and elements which our customers would not choose to pay for’. This should guide us to think about ‘paying’ customers. Paying customers generally come in 2 varieties. The first variety are those who buy for resale, including those who buy and distribute to others (let’s call them P1 customers). The second variety are those that buy items to use themselves, including the actual end-users of our products/services (let’s call them P2 customers). We can visualize these customers in the following manner:

P1 customers (buy to resale or distribute)	P2 customers (buy for use, or distributed to)	other stakeholders (NOT customers)
Company procurement departments	Buy for their own use (consumers)	Your boss (or your bosses boss)
Resale outlets	Product/service given to for their personal use	The Sales or Marketing departments
Consignment outlets	Product/service given to for business use	Research & Development
		Owners/stockholders
		Visible & invisible internal customers (those to whom you hand off work to)
		our lean consultants or internal lean team
		You

So while it’s important to note which customers we’re really talking about, it is equally important to know who is not the customer. These other ‘stakeholders’ are really consumers of system resources. They don’t pay for them, and they tend to care more for what they think they want, than the consumed resources. And despite what they believe, they don’t speak for the customer either (despite what they think and say…).

But many will ask:

• Does it really matter?
• Do we have to consider only the paying customers?
• Shouldn’t we consider internal customers and other stakeholders as true customers?

How your organization answers will affect the most important aspect of your lean system, how you will define waste. Additionally, it will affect how the organization interprets the ‘Voice of the Customer’. Giving too much weight to internal customers means defining a great deal of real waste as value-adding activity. This can place you on a very unproductive path, affecting the very culture the organization is needs to change. Since these other stakeholders (specifically, the ‘internal’ customers) don’t pay for the resources they consume, they will tend to ask for governance (inspections, audits), extraneous data processes (databases, reports), and wonderfully complex and expensive ‘catch-all’ solutions (capital investments in hardware and software). So the answer is an emphatic YES, it really does matter. Not that their voices shouldn’t be considered, but they should carry much less weight than the true customers (P1’s and P2’s), who will literally end up paying for all the waste left and introduced into our processes.

WHAT IS ‘VOICE OF THE CUSTOMER’?
Voice of the Customer (VOC) is a series of techniques (as most lean tools are) to get to the heart of the issue. Customers communicate in many ways; They tell us what they want, directly (thru orders); They tell us what they want, indirectly (by voting with their feet); They tell us what they think they want (wish lists); They give us feedback on the products and services we’ve provided; They give us feedback on products and services others provide. Unfortunately, unless we manage this important resource (customer input), it can be lost, misconstrued, misinterpreted, and end up basically worthless.

VOC seems relatively simple, like most lean concepts. But in reality, VOC means really communicating with the customer, and really understanding what they want and need. Remember, customers define their desires in several ways:

• The features of the product or service (quality, expectations of what they want)
• The delivery of the product/service (when they want it)
• The quantity they require (how much they want)
• The costs involved (time/money/effort, how much they want to pay)

These aren’t so straight-forward, since literally, every customer is different. Plus, customer desire is only part of the VOC equation. The other part of the equation comes from customer feedback. When you combine these 3 elements, customer needs, customer desires, and customer feedback, you define the VOC, which can be thought of as a true relationship between your company and the customer.

HOW DO YOU CONSTRUCT THE VOC? First, we have to realize that there is no ‘single’ VOC. Each project you execute, each problem you solve, will have a separate VOC. This is because each solution we put into place will have different effects on the customer base. So it is important to actually construct specific VOCs, for each area of focus. Depending on what is being accomplished, there are various combinations of tools to assist in truly understanding the VOC:

• Focus groups
• Customer orders
• Immediate feedback (verbal)
• Delayed feedback (verbal, written, call center feedback)
• Structured, solicited feedback (surveys)
• and there are many others…

(Customer needs, desires, feedback = Voice of the Customer)

It is important to note what is not on this list. This list doesn’t support the guessing and assumptions that are typical ways of constructing informal VOCs. We either build a proper VOC, or we don’t consider the customer. It’s really that simple. Try it, I think you’ll be surprised as to how a structured VOC will affect the direction you take, and the results you get! Remember, the customer is king, and a lean philosophy should always guide us in that direction. Otherwise, lean can be a very risky proposition!

Keywords: Customer, customer feedback, external customer, feedback, internal customer, lean, lean implementation, stakeholder, survey, VOC, Voice of the Customer

Bill Kluck is the Founder and Director of Operations for The Northwest Lean Networks, a professional society which connects the community of lean professionals worldwide. Bill has over 20 years of experience implementing lean in a wide variety of industries, both public and private. He has trained thousands of team members in various lean strategies and techniques, and has overseen financial impact in the hundreds of millions of dollars.

Bill is currently the Director of Operational Excellence with The Coca-Cola Company, in Atlanta, Georgia. His main focus is building transformational change and evolving business culture.

Bill earned his Bachelor of Science in Industrial Engineering from the University of Washington, an MBA from Seattle University, and holds several continuous improvement certifications (including a Six Sigma Master Black Belt, and a Master’s Certification in Lean Methods).

Click here for a SNEAK PEAK at next months article...