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Are You Serving "Internal Customers" or Your Real Customer?

by Brent Hostler
March 26, 2015

Are You Serving "Internal Customers" or Your Real Customer?

by Brent Hostler
March 26, 2015 | Comments (2)

In my work coaching organizations large and small, I often hear the term “internal customer”. For me, this concept can be potentially damaging to the successful operation of a business. Consider the following two examples why while also reflecting on the last time you considered your real customer’s needs.

When I incorporated the game of Telephone into a class I facilitated recently, I thought the participants would recall fond childhood memories. While this was partially the case, the game also served as a keen reminder of the importance of clear and simple communication. The message, relatively simple in nature, went in one end of the line and came out the other only slightly resembling its origins. Somewhere in the cycle of receive and transmit, the line of a dozen people completely reshaped the message. More importantly, the participants significantly diluted the original message within sixty seconds. I can only imagine the results across hundreds of people, with weeks of time passing between messages.

Another example to consider (for those more mathematically inclined) is the concept of Rolled Throughput Yield. If you’re not familiar with it, it’s simply the probability a process with multiple steps will produce a defect free result. For example, step one in a process is completed 90% right the first time (RFT); step two is completed 70% RFT; and step three, 80% RFT. Rolled throughput yield equals step one (90%) x step 2 (70%) x step 3 (80%) = 50.4%. Said another way, this process has a 50/50 shot at getting the end product or service actually correct. 

So let’s think about how this connects with the idea of the internal customer. Consider now the structure of your organization. Are groups or departments consistently working in silos? Do processes feel fractured? Do upstream or downstream steps occurring in different silos adhere to internal service level agreements? Any of these scenarios can lead to people striving to reach outcomes many steps removed from what the paying customer expects. The more numerous the silos, the more likely the metrics are inconsistent, and the more likely employees feel disconnected from the organizational purpose of satisfying the end customer.

By maintaining or promoting the notion of an internal customer, an organization is potentially clouding their ability to delivery a world-class service or product – the right product their customer or client actually wants or needs. Each link in the chain, each silo standing between the input of a product or service and the deliverable to the real customer, serves as one additional point of dilution to the true value sought by the customer. As not to turn a blind eye to the ever-evolving and competitive world we live in - specialization, offshoring, and telecommuting are all factors impacting this employee-customer dynamic. This may be a matter of semantics for some, but leading an organization by fostering a culture that supports the idea of ONE team - cross-functional and diverse by nature - delivering to THE customer may make the difference between keeping the lights on and going out of business. 

In an environment where outstanding customer service is evolving to be one of the most important differentiators, depending on your industry, it may be worth revisiting your organization's alignment across department and value streams. The risk of taking the wrong approach may result in “internal customers” not having an actual customer to please.

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
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2 Comments | Post a Comment
Daniel Jones March 27, 2015
2 People AGREE with this comment

Which is why we have to actively solicit customer feedback on how well we are helping them solve their problem or meet their need and how we let them down or could do better. Every comment and complaint needs to be fed right back to the line and to product development and acted upon, not left to customer service to "deal with". 

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TTRY March 30, 2015

Oh how I wish those who provide direction could understand that thought process. Typically, organizations want what satisfies their needs which they somehow align or justify those to the customers needs. But unfortunately, the real customers today are the Board members and the Share holders. Those are the ones that needs are met and not actually the customers.

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