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We meet daily to examine a new customer complaint. What do we do next?

Michael Ballé
2/27/2017
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Dear Gemba Coach,

We’re a start-up and have taken your advice: we now have a customer wall and we meet daily to look into a new complaint. What do we do next? It’s hard to know what to do or how that helps?

Bravo! It might not feel like it but this is a great step in the world of lean. Good question though, why are we looking at complaints one by one?

Looking at customer complaints in detail, at least once a day or at the very least once a month is indeed a core lean practice. Of course, we’re also looking at the data about complaints (how many, how often) and we rank them in Paretos, to have some sense of perspective, but the lean point is to look at one specific, particular, individual complaint regularly to figure out who was this customer? What were they trying to do? How did we get in the way and why are they so mad about it? Data is important but not as instructive as facts. The key role of management in lean is to seek opportunities for value analysis (improving value in current contracts) in order to determine value engineering topics (improving value in the next generation offer) – complaints are a window into what customers value.

A natural reflex when trying to improve the quality of what you do is to group complaints in types, by measuring them and creating a Pareto-like analysis. Then running specific projects to get these issues to improve. Typically, beyond the early low-hanging fruit, this approach doesn’t lead very far.

Grouping complaints often leads to over-generalized categories, such as “late delivery,” or “doesn’t meet such quality standard,” and so on. It doesn’t tell you anything about your customers, it only reflects how you’re categorizing your quality issues. Not surprisingly, action plans that try to address such abstract topics – which cover a multitude of sins, each with different causes – soon run into the group or deliver very administrative responses such as more quality control and more audits. Not a great way to solve anything, particularly if you’re a start-up.

Customer Conversations

Let’s take and step back and think about why we want to look at complaints one by one. We’re not hoping to solve all complaints in one bold stroke. We have a different aim in mind: we’re trying to establish at conversation with customers. We want to figure out what made them complain in the first case (yes, well, sometimes it seems pretty obvious, but still).

What was the customer trying to do? Some complaints are about straightforward fouls on our part – we simply didn’t deliver on something we promised. But other complaints are more surprising. The first question here is what was the customer trying to do when something bad happened, that made them mad enough to go all the way to a complaint. What are they trying to educate us on?

Any product or service is just something in the way of customers trying to get things done – customers don’t use our product or service per se, they use it to get to their next step. The product or service either helps them or gets in the way. Sometimes it gets in the way of something they were trying to do we had no idea about – this is what we’re trying to figure out:

What was the customer trying to do when we caused them grief?

The second question here: is how did our process get in the way of what this customer was trying to do? By nature, processes are set up to satisfy the greater number of people in the most normal range of circumstances. This is why complaints are so interesting: was this specific customer trying to do something new or unusual? Was her context new or unusual? Are these just oddities or are they signaling us changes in usage in the market that we’re not picking up?

External change is typically faster than internal change, and will first come up as complaints as customers try and do something new that your standard service simply doesn’t allow for. On the gemba a few weeks ago, in a precision parts manufacturer, a customer was complaining because he was trying to figure out where his batch was in the process – without talking to the project manager. We didn’t understand at first, but, mulling over it, we realized that people are increasingly used to internet tracking systems where they can find the information they want without taking to a person. In this particular case, talking to the project manager might also get the customer into tricky discussion about issues or new sales that he might want to simply avoid. This single complaint led the company leadership to ask a deep question: should a digital response allow customers to track their orders in ur system? 10 years ago, it would never even have been an issue … but now?

The third question individual complaints ask is: how well did we respond? On each complaint, we’ll look into the immediate countermeasure and ask ourselves: did we satisfy the customer with our response, or make them even madder (as many businesses do when they respond to a complaint)?

From this point of view, every single, distinctive complaint is the opportunity to learn about:

In this single instance

What does this teach us?

Why is this specific customer complaining?

Is the customer trying to do something unexpected/new with our product/service we haven’t thought of? Are they in circumstances we haven’t considered when we designed the product/service?

Why did our normal process cause trouble to the customer?

What internal reason have we got not to deliver to the customer in this specific case? Is this a valid reason? How systematically does it occur?

What kind of response did this customer get from us?

Did it help him or her to get what they wanted done? Was it friendly? Did it just cheese them off even further? What does this say about our attitude to all our customer relationships?

As you keep at it, this approach teaches you to respond better, more concretely to specific customer issues (rather than try to change the process as a whole), which, in turn, creates a conversation: what do customers like/dislike? How are their tastes evolving? How are common usages evolving?

Deeper Practices

The simple practice of doing so will make you realize that things are changing. For instance, for the company mentioned previously, switching from phone to web is already a revolution – but what about switching from website to smartphone app?

The second deeper practice of lean is looking beyond our ability to better respond on a case by case basis to what changes we need to make to our mental models. Let’s go back to the daily list of customer issues. After a while, we will see a number of typical problems return in different form, as well as our responses, which might be different from case to case, but still typical as well.

By looking at five to ten recurring issues and our responses we can ask ourselves a deeper question: what do we need to change our minds on? What’s the incorrect assumption in our mental models that makes us miss this systematically? In other words, what do we have to learn?

In psychological parlance, this is called double-loop learning, a term that was coined by Chris Argyris in the previous century:

  • First learning loop: Learning to adapt better by identifying the stimulus and progressively learning to respond better.
  • Second learning loop: Evaluating whether our responses are the right ones and learning to change our understanding of the world to fit how the problem occurs, whether it is important and what changes need to be made.

Agreed, it seems unrealistic to think that by looking at single complaints one can figure out how to respond to quality in general, but in real terms, this is the only way. Empirically, we sample instances if we can’t look at them all, and don’t try to fit them in our known pattern but, on the contrary, try to see what makes them special. This is how all discoveries are made. I’m not suggesting one should ignore the numbers, on the contrary, they create an important average baseline, but qualitative, single instances, facts, are just important.

Imagine you’re trying to figure out how a species, say finches in the Galapagos, evolves. In the end, a finch is a finch. By looking at birds on average, you will never spot any evolution. Only by looking at individuals will you notice that some have longer or shorter beaks. Only then will you notice that at times, there are more with longer beaks. And that in times of drought, longer beaks have the evolutionary advantage of digging for seeds buried deeper in the dust.

The same applies for markets. By looking at how customers behave individually, we can sort the oddity from the average and rather than dismiss it, ask ourselves whether this does not reflect an evolution of either taste or environment (or often both) so that we (1) learn to respond better by hit-and-miss until (2) we figure out what, exactly we have to change in our understanding of the market:

  1. Find an interesting complaint;
  2. Figure out if the customer’s reaction fits a growing trend on the market;
  3. Look for other similar cases and try to respond better case by case;
  4. Update your mental model of customer segments and how the use case evolves (by the way, when was the last time you updated your use cases?).

In a broader sense, listing customer complaints and looking at one daily (pick an interesting one) can be seen as part of the management system of lean: by doing this systematically, you will become better at responding faster to customer issues, which is a good thing. But the real promise of lean is in the learning system: observing our own responses and asking “why?” until we change our minds, and define both the problems and the countermeasure differently, which leads to real, sustainable change for the better: improvement.

3 Comments | Post a Comment
Peter Barrett February 28, 2017

Michael : A very deep and overly embroidered answer to a very simple question  . ( What do I do next ?)

Your customer is not asking you for a Thesis on Customer Dynamics. So in this example :  please ask yourself , " Did I truly understand my customers need " ?  and "Did I supply it ?

Your inventory is words : (of wisdom ). your value is clarity in the solution , and your lean responsibility is to make the ends meet ( demand and supply ) with the minimum amount of wordage.  

ie  "This is what you do next ! steps 1 2 3 4."

Michael please view my comment as helpful feed back . I learned this lesson from the best of the best ,when my Sensai said, "Too many beautiful words Peter-san please try again !

Edgar Agustin March 1, 2017

Michael, that is a remarkable article. I fully understand your prescription for handling complaints. Thank you.

Steve Maker March 1, 2017

Thank you, Michael. By addressing the background and rationale as well as the specific steps of this process, you’ve provided a depth of understanding that will help readers actually make this practice work. So valuable!