Fitness for purpose
Every business or every unit of a business ought to know and understand its unity of purpose:
- What exactly are you in business to do?
- Why does your firm or business unit exist?
If you know that, you can start to explore what represents fitness for purpose.
- is always defined externally, by customers and other stakeholders—governments or regulatory authorities;
- discovers the criteria under which your customers select your service;
- uniquely differs in what people want and expect; and
- allows you to define market niches and understand different business risks.
Discovering fitness criteria
Tell stories about our customers. When you start to see patterns in the stories, you can start to cluster stories together where you feel there is a similarity, affinity or empathy between them. As clusters emerge, give each the cluster a name. Each cluster represents a customer or market segment. You might define a vibrant persona and a handful of key job stories for each segment. These vibrant personas will be used in many more activities in your business to design products and services for that niche. From telling your stories, you may discover a unforeseen segment.
Put yourself in the shoes of a vibrant persona, and ask yourself:
- What do you value?
- What would make you choose this product or service?
- What would make you come back again?
- What would encourage you to recommend it to others?
In short, collect your pirate metrics. These are your fitness criteria and it is these criteria by which the business should be measuring the effectiveness of its service delivery.
Tune supply and demand using classes of service
A class of service optimizes the value experience and perception of different sources of demand. For example, Starbucks needs to service both drive-thru and walk-in customers with limited staff capacity. Servicing the drive-thru over walk-in customers may disappoint the latter. How do you balance the two?
Devise a class of service for both. A class of service are the game rules or explicit policy that apply in certain situations. Hence, staff must be able to easily distinguish between situations and behave according to the corresponding class of service.
Different market or customer segments enjoy different classes of service. A class of service creates trade-offs between profitability and business risks. What is the proper mix? What drives the mix? In other words, which parameters control the mixing ratio, and how?
For example, in a gym, the following forces may play a key role:
- having only monthly subscribers:
- creates a busy gym with a vibe; and
- results in queues for equipment, showers, etc.
- having only annual paying customers:
- creates a tranquil gym without queues resulting in a better experience;
- will likely churn off our service;
- have high acquisition costs to gain replacement customers.
A class of service is a set of game rules (or explicit policy) for how service requests should be treated. Each customer segment enjoys one or more classes of service to maximize customer satisfaction while minimizing expenses and costs.
Changing the game rules, changes the ratio between the classes of service. Fitness criteria govern the game rules. Game rules govern staff behavior and treatment of service requests (or job stories).
Pitfall: classes of service can create the perception of first class and second class customers. This may put off the second class customers, who might leave unhappy.
Therefore, design and evolve your classes of service so that each customer segment perceives the best service—you consistently meet and exceed expectations. Manage the work in progress limits to maximize focus, throughput, responsiveness and predictability for each customer segment.
Make commitment and delivery points explicit and collect explicit queueing and lead times to tune the system as a whole. optimize the whole by explicit work in progress limits, strictly limited defect counts (escaped and reported by customers) and rework.
- daily, during the daily standup meeting to assess operational flow;
- weekly, service delivery retroprospective or system capability review to retroprospect service delivery performance against quantitative fitness criteria; and
- quadweekly, operations retroprospective, a systems of systems level service delivery retroprospective on the overal performance against the fitness criteria.