Connecting the dots

Recently I attended a presentation by a member of the board of a large insurance company. He discussed the "lean" implementation the company has gone through. Lean is a methodology aimed at continuous improvement, and it originally comes from the manufacturing world. Obviously it can also be used for administrative processes.

One of the key elements of Lean is to define the customer value that the organization needs to deliver, and then to eliminate everything that doesn't contribute to that goal. The problem with that could be that you stop innovating. Customers usually don't ask for innovation, they just want to do business hassle-free. The insurance company took a great approach. They company didn't simply ask customers, it didn't just analyze data, the company observed customers closely.

One example that was given was the process around customers moving house. Simply optimizing that process is simple: once you know the customer's old and new address, you can immediately change that in the system, and send out a confirmation letter or email. Process optimized, costs saved, unnecessary steps eliminated, on to the next process. But hang on, what if you think this through? How to add customer value? Moving house from an health care insurance point of view is much more impactful. If you move to another city, you may need a new dentist, a new general practioner, new specialists, etc. Why not offer the customer to register them at a new doctor, and point them to the web site where other customers rate their doctor, dentist etc. Customers become a community. Another innovative thing, was that in its scorecard the insurer doesn't only measure the improvements in time, cost and quality for the company itself, but it actually has performance indicators on what it has achieved from a customer perspective. As logical as this sounds, this is a rare thing.

Lean and Six Sigma do not always have to be 'in the box', and simply about cost savings and operational excellence. Really thinking through what adds customer value is the key to innovation, and this presentation I attended showed that clearly.