Volume 20 November 25, 2002
Message From Charles Loew
Comments From Our Readers
Helpful Hints from fellow Practitioners
New Truths on Quality
Top Ten List
Feature Of This Issue
Second Feature Of This Issue
Coming in the Next Few Issues
Welcome to MASET News. A monthly publication dedicated to the communication between MASET and our many interested friends, customers and potential customers
MESSAGE FROM CHARLES LOEW:
I have been on the road continuously since the last issue of Maset News and will be until December 15, 2002. This is both good and bad. Living out of a suitcase and away from home is difficult, but trying to respond to e-mails, voice mails, etc. makes travel even more challenging. As a result, nothing new has been added to our web page. However, you can expect a number of very exciting programs and offerings now in the works. They shall be added over the next few months.
During my travels around the world, I keep being reminded of the desire of people everywhere to improve their standard of living, to acquire knowledge, and accumulate material possessions. The vast majority is willing to work toward the achievement of these goals. Everyone I have met has been friendly, hospitable and has always attempted to make me feel very welcome in their country, city or home. It is regrettable that there is a small minority that hates so badly that they will kill innocent people to satisfy their hatred. Hopefully, somehow this hatred will end and the world will become a peaceful place for all its human inhabitants.
One of the Maset associates, Mr. Jack O'Mara saw the following "21 Suggestions for Success" in the Black Canyon coffee shop in Silom Complex, Bangkok. Jack took the time to jot them down. We will share them with you during November and December in our Top Ten List. If you have any suggestions for either the Top Ten List or for the Helpful Hints from Fellow Practitioners, please send them to us.
This month's feature article covers one of our customers, WIPRO. Our association with WIPRO began in 1996 when we assisted them in implementing Six Sigma. They are a very special organization with a very special leader. I am sure you will enjoy reading about the continuing success of the company and their great leader Mr. Azim Premji. If you are interested in emulating the success of Wipro, please contact us for assistance at Charles.Loew@masetllc.com
Our second article deals with service to the customer and especially why service is particularly important when the economic picture is bleak. Few organizations realize that now is the best time to truly differentiate their business from the competition. Enjoy this hard hitting, easy to understand article and learn what you can do to grow, not just survive in these times.
COMMENTS FROM OUR READERS:
"Your Newsletter is appreciated. Thanks for keeping me on the distribution." California
HELPFUL HINTS FROM FELLOW PRACTITIONERS:
Frequently a member of the team will ask the facilitator a difficult question. In most cases, the inquirer either knows the answer or has a strong view as to the anticipated response. Thank the inquirer for the question, indicate that she or he has most likely given some thought to it and perhaps can more fully explore the rationale for the question as well as what options may be considered as a solution.
NEW TRUTHS ON QUALITY:
New Quality Programs Have High Up-Front Costs.
The Best Quality Programs Have No Up-Front Costs.
TOP TEN LIST:
Key Learnings in - Success
The first eleven of twenty one Suggestions for Success
1. Marry the right person. This one decision will determine 90% of your happiness or misery.
2. Work at something that you enjoy and that is worthy of your time and talent.
3. Give people more than they expect and do it cheerfully.
4. Become the most positive and enthusiastic person you know.
5. Be forgiving of yourself and others.
6. Be generous.
7. Have a grateful heart.
8. Persistence, persistence, persistence.
9. Discipline yourself to save money on even the most modest salary.
10. Treat everyone you meet like you want to be treated.
11. Commit yourself to continuous improvement.
by: H. Jackson Brown, Jr.
FEATURE OF THIS ISSUE:
THE WIPRO WAY
by Srikumar S. Rao
All companies promise quality, but few have made it the mantra it is at Bangalore-based Wipro. Once a small Indian cooking oil business, the company name is now a diversified global powerhouse with a passion for perfection.
The stories of Azim Premji's commitment to quality and integrity are already becoming the stuff of legend: In the early 1980's, when his growing company, Wipro, decided to open a soap and cooking oil factory in Southern India, the head of the local electricity board let it be known that a "consideration" of Rs100,000 (US$10,000) would get the company's application approved. Premji refused and flew in generators to get his factory started. The generators stayed for two years, until an election brought in a new state government that replaced the corrupt official. Cost to Wipro? More than Rs20,000,000 (approximately US$2million).
In a country and an era in which business success has too frequently required cozying up to powerful politicians and bestowing largess on key bureaucrats, Premji said no. While his peers stuffed upper echelons of their companies with relatives and cronies who could be "trusted," he went out of his way to find talented professional managers. Other industrialists created rigid hierarchies and lived opulently while he flew coach and encouraged a culture in which newly hired trainees could challenge him in open forums.
It has paid off. The Stanford University alumnus joined what was then called Western India Vegetable Products Ltd. in 1966 at the age of 21, taking over the reins of the family business after his father died. He took a sleepy cooking oil company and transformed it into a technology powerhouse, renaming it Wipro in 1977 and diversifying into new industries while keeping the original core business.
This year, the company has had a market capitalization as high as US$51billion. Wipro is the largest publicly traded information technology company in India and has a presence in several business areas - IT, financial services, and health care technology. As a part of that mix, Wipro is a provider of software services to Fortune 500 companies around the world. Premji, in his mid-50s, is now setting his sights a little higher. He wants Wipro, based in the thriving technology center of Bangalore, with facilities in a growing number of other locations, to become globally respected as one of the best-run companies in the world.
Premji has been called the Bill Gates of India. Those who have followed Premji's efforts over the past two decades know that he did it by flouting conventional wisdom. His entrepreneurial spirit includes a lifelong passionate commitment to sound values and integrity. And enough eyes are watching his progress to indicate that imitators may lead an entire economy up the trail he is blazing.
"We have our roots in India," says Premji, "but our vision is global. We take traditional cultural values such as respect for education and marry them to modern management notions such as a focus on quality."
Earlier this year, Wipro's infotech division achieved a Level 5 certification by Carnegie Mellon's Software Engineering Institute. It is the highest possible rating by this blue-chip evaluation agency, and fewer than 25 organizations worldwide have achieved it. Premji has also launched a companywide initiative to achieve the highly respected Six Sigma quality standard by December 2002.
Six Sigma is a rigorous methodology designed to reduce the occurrence of defects to less than 3.4 out of every million opportunities to produce a defect. Despite the high-profile example of General Electric-which has documented savings of hundreds of millions of dollars through Six Sigma-very few companies have embraced this approach because it is an arduous road to take. It requires examining every single process in a company to identify and eliminate bottlenecks. It necessitates nudging suppliers and customers to look at their operations where they impinge on yours. Turf battles erupt as powerful executives are forced to share information and coordinate operations.
"Six Sigma is forcing us to quantify the customer benefit in everything we do," says V. Rama Kumar, the executive heading the drive. "It's amazing how much waste gets squeezed out of the system."
A good example at Wipro is the sales cycle for custom-configured computers. It used to take 350 days to get from the sales order to the receipt of payment. A purchase order generated activity in manufacturing, accounting, billing, and other departments-and these were not always coordinated. A special price needed clearance from a senior executive on a specific form. It had to be clear what was included in a quoted price: delivery? sales tax? installation? Missing or ambiguous information led to time-consuming back-and-forth, which left customers unhappy. A newly designed computerized order-entry process will not accept an order until all information necessary to process it has been entered. If a configuration requested by a customer is technically infeasible, the salesperson knows it immediately rather than weeks later when manufacturing reports that it can't be made. The cycle is now down to 150 days, and Rama Kumar expects to slice it in half again.
"We have more than 160 Six Sigma projects going on throughout Wipro," says Premji. "Each time we eliminate a bottleneck, some other upstream or downstream process becomes a new bottleneck and we have to gear up to tackle that. It is a treadmill, but one that is leading us to function at higher and higher levels of efficiency."
Customers, such as long-time Wipro client Lucent Corporation, have taken notice. Wipro developed significant parts of the call-processing software that Lucent uses globally. Microsoft recently signed an agreement with Wipro, making it a software development partner. The move came after Microsoft executives thoroughly scrutinized operations. Some Microsoft divisions are already pushing work onto Wipro.
"Wipro is competitive with any company in the world in terms of the quality of its work," says John Broom, Lucent's vice president of advanced technologies.
Although Wipro's recent run-up in stock price has catapulted Premji's net worth to more than $35 billion, he downplays the fact. He dresses in off-the-rack clothing, has no retinue, and climbs up to his 10th-floor office every day or takes a crowded elevator. Part of his success is that he refuses to let his wealth insulate him from hard information.
Unlike many other senior Indian executives, Premji's style is to welcome- even invite-criticism. And he has built a reputation for fixing underlying problems rather than covering them over with slick public relations.
For example, retention is a chronic problem in the field of high technology. Talented engineers can take their pick of jobs, and each move generally means a higher salary and better perks. Premji tackles this by trying to make Wipro too good a company to leave. He invests almost half his time in personnel matters of one kind or another. Wipro offers technical training programs to keep employees current and also offers "soft-skill" programs emphasizing leadership, team building, and customer orientation. Thanks to 360-degree evaluations, managers get frequent feedback from bosses, peers, subordinates, and customers.
While purse strings are open for education, they close for what are perceived as nonessential expenditures that other companies countenance. Wipro executives do not live the good life on a corporate expense account. When traveling for business, they stay at company-owned guesthouses rather than plush hotels. They are expected to dine frugally and select low-cost transportation when options exist. "We don't have a 'five-star' culture," says Dileep Ranjekar, head of human resources. "If luxurious living is that important to a person, he or she would be better off at another company."
Wipro's approach is simple: Treat employees fairly, throw them plenty of professional challenges and opportunities to learn, offer constant feedback on how they are doing and where improvements are needed, and provide customized training programs to fit developmental objectives. So far it has worked. Wipro's employee attrition rate of 10-15 percent is well below the industry average. There are also programs in place to hire more women and to become more diverse. Top management is remarkably stable despite the recent defection of several senior executives who left to join a start-up company.
There is still a taboo topic in India's business world, one that no one will willingly talk about. Corrupt government employees often shake down companies operating in India, even large ones. Premji is rock-hard in his determination not to knuckle under to such pressure. He is prepared to lose money and even to walk away from an investment rather than compromise, as evidenced by his actions when confronted by the electricity board "consideration." There are many such stories, and even competitors grudgingly acknowledge that Wipro has succeeded in running a clean ship in muddy waters. "When you look at yourself in the mirror," asks Premji, "are you proud of what you are and the work you do?"
Such steadfastness to principle breeds fierce loyalty. "Premji has built a company where you never have to take a briefcase full of cash to anyone," says a former senior executive. "There are a lot of people who stay with Wipro because there are not that many places they can go where the same is true."
It remains to be seen if Premji's strategy will continue to work as well as it has. He correctly identified e-commerce and telecommunications as hot growth areas and is trying to land large projects helping companies move older "legacy" software applications to the Web. As a sign of Wipro's commitment to global thinking, Vivek Paul, the newly hired former GE executive who heads Wipro's infotech division, is based in Silicon Valley to be closer to such customers.
But there will always be challenges and new hurdles. For example, Wipro employees inevitably develop skills that are in exceedingly short supply world-wide, and one thing that could make them stay is employee stock options. But on this topic, Premji is very tight-fisted. He owns 75 percent of Wipro and hates parting with equity. Despite recent moves to give more stock to key managers, Wipro is far behind rivals such as Infosys in helping employees build their personal net worth.
"You are a billionaire," said one Wipro recruit at an orientation session Premji was addressing. "How come we don't get stock options?" It is a tribute to the culture he has created that such a question could even be asked, let alone so fearlessly. It is also a sign of the times. Silicon Valley expectations have come to India, and other companies are accommodating them. Can Wipro adapt? If there is one thing Premji has shown in Wipro's success, it is that he can change as readily as he expects others to. But whatever he does next, his actions are likely to set a model that many will follow.
Srikumar S. Rao is Louis and Johanna Vorzimer Professor of Marketing at New York's Long Island University. Reprinted with permission of Professor Rao. Article originally appeared in Hemispheres, June 2000, pp. 54-58.
SECOND FEATURE OF THIS ISSUE:
IN CHALLENGING TIMES, SERVICE MATTERS MOST!
by Ron Kaufman
As we adjust to difficult economic times, some businesses cut costs by cutting corners on customer service. This is exactly the wrong thing to do. Right now, service matters more than ever. Here's why:
- When people buy during an economic downturn they are extremely conscious of the "hard earned" money that they spend. Customers want more attention, appreciation and recognition for their purchases, not less.
- Customers want to be sure they get maximum value for the money they choose to spend. They want assistance, education, training, installation, modifications and support. The basic product may remain the same, but they want more service.
- Customers want stronger guarantees that their purchase was "the right thing to do". In good times, a single bad purchase may be quickly overlooked or forgotten, but in tough times, every expenditure is scrutinized. Provide the assurance your customers seek with generous service guarantees, regular follow-up and speedy follow-through on any queries or complaints.
- In tough times, people spend less time traveling, wining and dining, and more time carefully shopping for each and every purchase. Giving good service enhances the customer's shopping experience and boosts your own company image.
When times are good, people move fast and sometimes don't notice your efforts. In tighter times, people move more cautiously, and notice every extra effort that you make.
- When money is tight, many people experience a sense of lower self-esteem. When they get good service from your business, it boosts their self-image. And when they feel good about themselves, they feel good about you. And when they feel good about you, they buy.
- In tough times, people talk more with each other about saving money and getting good value. "Positive word of mouth" is a powerful force at any time. In difficult times, even more ears will be listening. Be sure the words spoken about your business are good ones.
So giving good service in tough times makes good business sense. But how do you actually achieve it? Here are eight proven principles you can use. I call them "The Secrets of Superior Service":
- Understand how your customers' expectations are rising and changing over time. What was good enough last year may not be good enough now. Use customer surveys, interviews and focus groups to really understand what your customers want, what they value, and think about what they are getting (or not getting) from your business.
- Use quality service to differentiate your business from your competition. Your products must be reliable and up to date ... but your competitors' are, too. Your delivery systems must be fast and user-friendly, but so are your competitors'!
Make a real difference by providing personalized, responsive and "extra-mile service" that stands out in a unique way that customers will appreciate, and remember.
- Set and achieve high service standards. Go beyond basic and expected levels of service to provide your customers with desired and even surprising interactions. Determine the "norm" for service in your industry, and then find a way to go beyond it. Give more choice than "usual", be more flexible than "normal", be "faster" than the average, and extend a "better" warranty than all the others.
- Your customers will notice your higher standards. But eventually they'll be copied by your competitors, too. So don't slow down. Keep on improving!
- Learn to manage your customers' expectations. You can't always give customers everything their hearts desire. Sometimes you need to bring their expectations into line with what you know you can deliver.
The best way to do this is by first building a reputation for making and keeping clear promises. Once you have established a base of trust and good reputation, you only need to ask your customers for their patience in the rare circumstances when you cannot meet their first requests. Nine times out of 10 they will extend the understanding and the leeway that you need.
The second way to manage customers' expectations is with the tactic called "Under Promise, then Over Deliver". It works like this: your customer wants something done FAST. You know it will take one hour to complete. Don't tell your customer! Let them know you will rush the project ... but then promise 90 minutes. Then, when you are done in just an hour (as you knew you would be all along), your customer will be delighted that you actually finished the job "so quickly".
- Bounce back with effective service recovery. Sometimes things do go wrong. When it happens to your customers, do everything you can to set things right again. Fix the problem. Show sincere concern for any discomfort, frustration or inconvenience. Then "do a little bit more" by giving your customers something positive to remember--a token of goodwill, a small gift of appreciation, a discount on future orders, or an upgrade to a higher class of product.
This is not the time to lay blame for what went wrong, or to calculate the costs of repair. Restoring customer goodwill is worth the price in future orders and new business.
- Appreciate your complaining customers. Customers with complaints can be your best allies in building and improving your business. They point out where your system is faulty, procedures are weak, or problematic. They show you where your products are below expectations or your service doesn't measure up. They point out areas where your competitors are getting ahead, or where your staff is falling behind. These are the same insights and conclusions that people pay consultants to provide. But a "complainer" gives them to you free!
And remember, for every one person who complains, there are many more who won't even bother to tell you. The others just take their business elsewhere. At least the complainer gives you a chance to reply and set things right.
- Take personal responsibility. In many organizations, people are quick to blame others for problems or difficulties at work: managers blame staff, staff blame managers, engineering blames sales, sales blames marketing, and everyone blames finance. This doesn't help. In fact, with all the finger pointing going on, it tends to make things worse.
Blaming yourself doesn't work either. No matter how many mistakes you may have made, tomorrow is another chance to do better. You need high self-esteem to give good service. Feeling "ashamed" doesn't help.
It doesn't make sense to blame the computers, the system or the budget, either. This kind of justification only prolongs the pain before the necessary changes take place.
The most reliable way to bring about constructive change in your organization is to Take Personal Responsibility and help make good things happen. Make recommendations, propose new ideas, give your suggestions, volunteer to help out with problem-solving teams and projects.
- See the world from your customers' point of view. We often get so caught up in our own world that we lose sight of what our customers actually experience.
Make time to stand on the other side of the counter, or listen on the other end of the phone. Be a "mystery shopper" at your own place of business. Or be a customer for your competition. What you notice is what your customers experience every day!
Finally, remember that service is the currency that keeps our economy moving. I serve you in one business, you serve me in another. When either of us improves, the economy gets a little better. When both of us improve, people are sure to take notice. When everyone improves, the whole world grows stronger and closer together.
Copyright, Ron Kaufman. All rights reserved.
Ron Kaufman is an internationally acclaimed innovator and motivator for partnerships and quality service. He is the author of the best-selling book, "UP Your Service!", and the FREE monthly newsletter, "The Best of Active Learning!" For more information and a FREE copy of the newsletter, visit http://www.RonKaufman.com.
COMING IN THE NEXT FEW ISSUES:
Training for Manufacturing Management
Ethics in Business
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