2F10 Wozappnin?

Think you're making rational business decisions? If you're lucky you might make decisions using intuition based on experience.


And it is a very, very big but, decisions are much more likely to be made on emotion and intuition. The work of Nobel Prize winner Daniel Kahneman would seem to show this. Whether it is biased thinking or the focusing illusion. Taking the last of these first, Kahneman says

"Nothing in life is as important as you think it is, while you are thinking about it."

The focusing illusion leads to all sorts of disappointments in life and business. Happiness and satisfaction are not necessarily dependant income, the latest fashion or latest gadget. So watch out for exaggerations of importance by marketeers trying to persuade you that something they are promoting is a 'must have'. Oh, and let's not get started on the exaggerations of politicians...

Biased thinking

Moving on to biased thinking. Does the dark cloud of emotional bias prevent you from improving business performance?

Actually, there is so much to intuition and reason, which Kahneman has also called automatic and deliberate thinking. He further divides intuition, automatic thinking, into what we shall call biased and skilled intuition. Biased intuition tends to be towards narrow thinking, is loss averse and is overoptimistic. Experience leads to skilled intuition (e.g. learning two times tables means that we can automatically give the right answer to 2 x 2). However, bias is always threatening particularly in new or unusual situations. This applies to the judgements and decisions that you as a manager must take.

In any given situation, our intuition immediately tells us something. The secret is first to acknowledge that it is your intuition speaking, then to check it out by analysing measured performance data from your system and processes. Always remember:

"The purpose of data is action."

as data analysis guru Don Wheeler says. That's effective action, i.e. doing the right things right.

Remember in my last blog we had begun to take action to improve performance by listening to our customers. In particular accepting their feedback. Moving on, in our journey around the 2F diagram you can see that that the next step is measuring performance to give us the data to balance intuition and resist focusing illusions.

Perhaps you have had - and accepted - some feedback from your customers. Alternatively, you may have some indication that something is not right or something has changed in your operating environment. Have you ever wondered what to do next?


Knowledge of the whole situation and proper measurements enable us to really understand what is happening so providing a factual basis for taking either immediate remedial action or thought out improvement activity.

"Just the facts ma'am"

as Stan Freberg's Billboard #1 parody (St George & the Dragonet), Detective Joe Friday was alleged to have said in 1950's TV detective series Dragnet. The humour may help you to remember that you need facts for effective improvement action and avoid biased intuition and focusing illusions.

To be clear. A fact is objective because it is based upon evidence and probably held by many, which is Kahneman's deliberate thinking. The opposite is an opinion, which may be due to a focusing illusion or biased intuition, is subjective. That means it is not necessarily true, but is belief that you as an individual might hold yourself with, as we have seen above, an emotional attachment.

More than a century ago the great British scientist Lord Kelvin said,

"If you cannot measure it, you cannot improve it."

The question for you as a manager is, are your decisions, particularly those to do with change and improvement, based on skilled intuition or better still deliberate thinking using facts, including reliable performance measurement?

In the next blogs we'll be looking deeper into good data and performance measurement as I continue to expand on the 2F diagram, drawing from my book Picture Your Business. This is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.


2F9 Change in Turbulent Times Needs: The Internet of Everything? Not Necessarily...

Have you wondered how to deal with change in these turbulent times? There are so many influences affecting you: like changing customer demands, competition, the economy, politics and the environment, which make it difficult to take the right action. All manner of experts have their own pet topic or solution which they suggest your business or organisation adopts. It’s the Internet of Everything! It’s social media! What about big data? Can they all be right? Or might these folk just as well be sorcerers?

Well yes and no. Depending on your organisation’s purpose, it may be all of the above and may be more, or none. The critical things is, what does your customer need and how does any change or improvement help them? To paraphrase Stephen R. Covey,

Begin with the customer in mind

To help you and your team deal with change in these turbulent times we ask you to think about applying the Flow & Feedback (2F) diagram below to your organisation. A critical advantage of the 2F diagram is that it is built around a learning cycle, which can be applied to a single process, department or a whole organisation. The Study-Act-Plan-Do (SAPDo) learning and improvement cycle gives you a double whammy. It is a roadmap for the flow of improvement activity around a business. In addition it can also be used to keep you on the right track when making detail changes and improvements to processes that work. You start at Study, which means answering the deceptively simple question,

‘What IS happening?’

As you can see in the diagram above we have put the SAPDo cycle at the heart of the 2F diagram. The Do phase is aligned to the operational level where the value is added and includes the support processes. We are going to call all of the new parts that we will add in this and future blogs the Strategic level. The two elements we have added are: Asking for feedback and Performance measures. In this blog we’ll just look at asking customers for feedback as the starting point.

You will see that the actual title in the process is Asking for feedback without denial. The 'without denial ' bit is really tough for many businesses and other organisations. Even when customers volunteer feedback, especially if it is anything like a complaint, the natural reaction seems to be denial.

Of course it is possible that customers might have unrealistic expectations. Even if they do they should be treated with respect and listened to, because - here's the biggie -

You might learn something!

Even the most outrageous or fanciful ideas or even misunderstandings might be the spark that sets you off on the path to some improvement or innovation in your offering leading you to a new competitive advantage. What do you think? Worth a try accepting or even asking for customer feedback without denial?

Next week I will be looking at Performance measures as I continue to expand on the 2F diagram, drawing from my book Picture Your Business. This is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.

2F8 Looked After Customers Look After Profit

Are your customers looking after your profits? As I say in my ebook Simply Manage:

If you look after your people, your people will look after your customers. If you look after your customers, they will look after your profits and pay your wages.

Profit is the outcome of all the activity in a business. In public or in not-for-profit organisations the aim usually is for neither surplus or deficit. The financial results of any type organisation are shown as an outcome in the bottom right hand corner of the 2F diagram. This emphasises that the financial results are dependent on everything else. Just chasing profit, for example, is usually fatal for businesses in the long run, especially those that then take all of that profit out of the business.

Of course there is this idea that businesses solely exist to maximize their profits. This leaves out their purpose, which is whatever they supply that is of benefit to customers and who then are willing to pay for. Ideally your business creates greater felt value for customers than what they actually pay. Interestingly writer Peter Drucker stated that business purpose was actually ‘to create a customer’. In practice you should say what it is your business does to create that customer. Have you written down what is that you do for customers?

The benefit or value that customers feel they get from what you provide is crucial in how much profit can be made. Your offering must have quality (doing what you say it will do); in addition, it or the way in which you provide it, should give that extra something that enables you to stand out in their minds.

I have mentioned Steve Jobs before and I don’t mean to go on. However, I recently came across a blog on profit by Frank S. Robinson that made an interesting reference to Jobs. As Robinson says, Jobs made loads of money, but that wasn’t his main aim. He appeared to be driven to perfect products that were useful to customers. This inner drive was allied to his obsession with simplicity. The profits that Apple did make enabled him to go on innovating. He didn’t stop.

Consider also the recent discussion about our low productivity in the UK. Businesses, especially big businesses, in this country don’t invest enough in equipment, in training, or in research and development. They do not even make cost neutral activity like routine continual improvement of working methods part of everyone’s everyday job, the results of which ensure continued profitability.

The lesson for the rest of us is that profits should not just be viewed to be taken out of the business. A certain retailer recently in the news springs to mind. Look what sadly happened to that retail chain when too much money was taken out of the business.

No. Sufficient profit needs to be made and retained so that a proportion can be reinvested in the business to ensure its ongoing improvement, development and hopefully to innovate.

Failure to reinvest and continually improve originates at the top. Owners or board level executives can isolate themselves from the day to day issues that affect productivity and hence competitiveness and profitability. This leads to decisions being made in isolation that do not take into account the reality of how value is being added for customers. It should not be surprising that management by walking about and taking a genuine interest in what happens in the workplace can be very powerful. You don’t need consultants to run ‘engagement programmes’ if you, as a manager, show an interest.

In conclusion, business profits are an outcome that is necessary for a return on the capital employed. However, it is essential for some retained profit to be reinvested in equipment, in training and in research and development for the enterprise to survive and thrive over the long term.

Is your offering sufficiently attractive to customers to generate the profits to reinvest for the future of your business? What profit allocation do you make for reinvestment in your business? How regularly does a top manager spend time in your value-adding workplace? And if you would like my help do drop an email to me at alanclark@keybiz.com

In the next blog, as we move round the 2F diagram, we are going to start looking at making improvement part of the way you do business. To quote one of my own taglines, learning is the key to improvement.

2F7 Are You Motivated To Do This?

Would you willingly do this? Perhaps? Me? Err, No! Motivation means want to do, probably enthusiastically. And, you know what? This is something that really just doesn’t grab me.

Talking of motivation, this brings me to back to my series of blogs exploring the 2F diagram of organisation where we come to Morale and motivation as an outcome of the organisation.

Why are these outcomes? It’s because they arise as a result of the actions of every element in an organisation system on one another, especially those of leaders and managers. The prevailing Zombie Management myth has it that to get results, performance or whatever, only requires managers to motivate their people. Just like that!

Leadership expert Peter J Scholtes once wrote,

The belief that they can motivate workers is one of the ultimate management conceits. Managers cannot motivate; however they can demotivate.

In his classic book The Leader’s Handbook he also wrote:

All of the empowered, motivated, teamed-up, self-directed, incentivized, accountable, reengineered, and reinvented people you can muster cannot compensate for a dysfunctional system.

Hence, morale and motivation are shown as outcomes in the operational level of the 2F Diagram of the organisation. And Peter goes on to lay responsibility for the organisational system squarely on leadership and management.

Want to find out more about the 2F Diagram?
You can buy copies of my book Picture Your Business about it by emailing me at alanclark@keybiz.com.

Zombie Management

What is zombie management I hear you say? It’s management that needs to feed off the living, but doesn’t know it is dead, i.e. outdated. It just keeps on doing the same old stuff over and over again and expects to get different results. I know. It’s Einstein’s definition of madness. Usually zombie management is heavily into targets accompanied by rewards and punishment, because it thinks can motivate people.


Motivation has been divided into two types. Intrinsic motivation is taking on challenges you enjoy doing for their own sake, which maximise your potential as a person. Extrinsic motivation is when others try to get you to do something they want you to do using carrot and stick methods, AKA just reward and punishment.

The problem with extrinsic motivation is that people quite sensibly are attracted by the rewards and try to avoid the pain. They will do anything to get the one and avoid the other, except the job required to be done in the best interests of the customer and the business. This includes CEO’s!


Because of the inconvenient fact that the actions of every element in an organisation on each other you get unexpected and often undesirable side effects from extrinsic motivation. Don’t believe me? Just look around. Manufacturing long ago gave up piecework incentives programmes because people essentially were getting paid for producing scrap. Another example is sales people selling whatever they can to meet their sales target, even if this causes immense problems in the business.


So how does the alternative intrinsic motivation work if you don't use reward and punishment?  Experts, such as Abraham Maslow and Frederick Herzberg, long ago showed that it is the ‘higher’ things that release the intrinsic motivation within people. Herzberg listed achievement, recognition, the work itself, responsibility and, lastly, advancement and growth. Are you giving people the opportunity to do work that provides this?

Leaders can really help these provide these factors with an inspirational project or vision that people want to be involved in and contribute to without extrinsic motivation. When you look at things like Linux and Wikipedia that people volunteer their time for, surely you can believe that people are born with intrinsic motivation? Oh yes to be effective, leaders and managers must actually model the behaviour and not just spout BS.

In the words of Dirty Harry, Do you feel lucky? Well do you? Are you going to go on doing the same old stuff? Or will you try something different? Ahh go on. You might surprise yourself.

As the Simply Manage Coach my aim is to help you do things more simply…

Using the Simply Manage Star® , business owners, managers and their teams are guided to working out ways forward on motivation and other challenges. By blending formal and informal learning with coaching, mentoring and the new media you can have a solution that works for you.

Want to find out more about how I can help you? Simply drop me an email to...


Also do feel free to share your questions below.

2F6 Cost Cuts Don't Cut It!

Cutting costs sounds like it makes sense doesn’t it? Well that depends. Certainly there is always a cost to doing business and it always seems to be going up. However, cuts come with consequences.

Let’s just think about this for a moment. The 2F diagram below shows Cost as an outcome from the whole organisational system. ‘System’ is used here to stress that every part of your organisation affects every other part to a greater or lesser extent. It’s all what is called joined-up.

So, just cutting costs in one place in the organisation is certain to have an affect somewhere else. Not to make a political point but to pick up on something topical, let’s consider the previous UK Chancellor making cuts to the criminal justice system. The knock-on effect through the system has meant that 7000 prison officers lost their jobs. Violence within prisons has since increased. Oops! Due to reassessment of the situation in prisons, the new administration has increased the number of prison officers by 2500 by 2018. Given the current problems in prisons, is that too little too late? A further question is what might be the consequences on reoffending rates and the further costs or stresses put on such as the police and society in general? Just one example of ‘Cuts increase costs’, as improvement expert John Seddon says.

Returning to the cost of doing business, a more effective strategy, as we saw in the last blog, is to tackle the massive opportunity to reduce waste. Where to start? Experts in operational excellence suggest starting with the customer. Then you work back to improve the value-adding flow through the systems and processes of the whole organisation.

It is absolutely critical to start from the customers and concentrate on improving the flow of value to them. One of the biggest missed opportunities made in applying Business Process Improvement, Lean and 5S methodologies is thinking too mechanically just about waste. A particular problem is with the second ‘S’ of 5S, which is Straighten. Too often this is misinterpreted as straightening tools on shadow boards or pens and pencils in in desk drawers! Not so! It is about straightening the flow of value, for example, removing obstacles and aligning equipment or teams to speed up the flow. The consequence of will be both better flow and lower costs! The point of the improvement tools is help you think, not do improvement for you.

And talking of obstacles, a question for managers at every level. Do you have a pet policy? Have you checked whether it is acting as a barrier to the value flow? Is feedback from the whole workplace encouraged, accpeted and acted upon to improve the value flow and reduce costs as a consequence? No? Are you sure? How do you know?

What will you do, continue to cut costs or improve the value flow? Ahh, go on!

More on the 2F diagram in my next blog, drawing from my book Picture Your Business, which is still available. I shall be dealing with Morale and Motivation. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.

Waste: Time is Money!

Remember the old saying, time is money? It's still true! And wasted time represents a huge opportunity for you to improve performance and reduce costs. How much wasted activity do you think there is in organisations? Ah go on, have a guess. I'll show you the answer below.

In fact today when everything seems to be moving even faster that saying was never truer. It is true for businesses and other organisations from the largest multinationals to SMEs and the self-employed. Today's complexity and the distractions from social media and email make hard to focus on what gives your customers a great experience and so makes money.

Looking at the 2F diagram below you can see waste shown as a separate outcome from an organisation.

OK, so how much waste activity, and hence time, is there in organisations? Well in 2002 the Lean Enterprise Research Centre at Cardiff University published a report in collaboration with the University of Bologna called Lean Profit Potential. In it they published a guide to the proportion of value adding activities compared with non-value adding activities in unimproved organisations. These are summarised in the figure below.

When I first saw this I was astonished! Then I immediately realised the enormous opportunity hidden in any conventional, unimproved organisation. Never mind whether you use Lean methodologies, business process improvement or just use that rare thing commodity, common sense. The most common organisations are what the authors call information environments, which includes offices, distribution or retail. Looking at the chart above almost half of activity is waste. Your challenge is, which half?

All parts of your business or other organisation, whether the value flow or support activities, generate waste. One of the standard performance improvement methodologies, Lean, identifies eight types of waste, that apply whatever sector or industry you work in. Can you see in the list below which ones waste time?

  1. Transport - unnecessary
  2. Inventory - stock and work in progress
  3. Motion - excess body movements
  4. Waiting - or delays
  5. Overproduction - excess activity (i.e. too much, too early or over ordering)
  6. Over processing - unnecessary processing that users don't need
  7. Defects, mistakes or errors - quality
  8. Underutilised talent of people - not using their minds, not listening to them and their fear of speaking out

Some are obvious, like Waiting. Mistakes can involve doing work twice, so even in information processing sectors time is lost and possibly customers not served when they need it. When you think about it they all involve time, whilst some also involve waste of materials or money.

Knowing what you know now what are you going to do about? Is the prospect of improved performance both financially and in serving your customers better attractive enough for you to take action? Well is it?

Future blogs will continue to expand on the 2F diagram, drawing from my book Picture Your Business, which is still available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.

A Bridge Supporting Your Value Flow

Crickhowell Bridge, Wales. Photograph Alan Clark 2016

Crickhowell Bridge, Wales. Photograph Alan Clark 2016

Have you thought about the processes and activities that support your value flow as the pillars of a bridge? Your value flow is literally supported by processes and activities such as bookkeeping, payroll, financial audit and accountancy, purchasing, HR, quality audit, communications and IT infrastructure, maintenance, facilities management, catering, cleaning, security, transport (though possibly in the value flow), and many more. Naturally these will vary depending on your individual business or other organisation.

Effective support processes and activities are vital, but not the reason the business exists. These will be added to what we are calling the operational level in the Flow & Feedback (2F) Diagram below. A critical question everyone in support needs to ask is whether they are making a positive contribution to supporting those directly adding what customers see as value that meets their needs.

By showing support processes beneath the value flow, the 2F diagram reminds you of their importance. Thinking of these activities as the pillars of a bridge will hopefully highlight the risk of taking an across-the-board cost-cutting approach by some arbitrary amount or percentage. If the pillars are weakened then your bridge, the value flow, may fail. And if your customers are unhappy they are likely to leave. Do you know and understand the contribution of support activities in your organisation?

In your ongoing drive for competitive advantage, are all your support processes as well as value-adding processes subject to continuous improvement and innovation by the teams themselves? How can they serve their 'customers' in value-adding activities better?

When looking for overall performance improvements think very carefully before outsourcing support processes and activities. An activity might be a core competency. Is it essential?  If this support process should fail or performance should drop off, will this adversely affect value-adding performance in turn impacting the end customer?

Finally there is the people angle of support activities. If you outsource some aspect, will the people from that outside organisation really identify with your business and feel motivated to drive towards your vision?

Security is an interesting example of a support activity that it might be tempting to outsource. Suppose you are a government or military organisation that deals in sensitive information. Are you sure that of the loyalty and confidentiality of outsourced security staff? One could think of situations where outsourced suppliers might be tempted to, say, cut costs in someway that upsets the security staff. Are disgruntled security people able to give of their best?

In conclusion, look at your business or any other type of organisation as a joined-up whole. Whilst it is critical to ensure that value-adding activities operate effectively, the reliability and effectiveness of support activities is equally critical. How effective are the pillars of your support processes bridge?

Future blogs will continue to expand on the 2F diagram, drawing from my book Picture Your Business, which is still available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.

Does Your Customer Value Flow?

Copyright 2014-2016  Simply Manage: Lead to Sustainability  by Clark, Peterson, Pitt

Copyright 2014-2016 Simply Manage: Lead to Sustainability by Clark, Peterson, Pitt

When you hear conversations about the functions in your business or any other organisation does it seem like there's a tone of "Oh and there is Operations too"? Depending on the business, other functions such as Finance, Marketing or IT rather than Operations too often seems to get all the limelight. Meanwhile down in the "engine room" people are working their hearts out trying to overcome barriers that seem to have been deliberately put in their way to make it harder to deliver value to customers.

Perhaps it is easier for a bright, shiny car manufacturing plant or an enormous chemical process plant to be 'front and centre' in people's minds. The fact remains that Operations is where value-adding operations are. Doesn't it make sense, if you aim to be a customer-focused business, to regard this part of the organisation as vital and give it priority?

The sequence of value-adding processes and activities has been called the value stream. This phrase creates a really powerful image within the organisation. It introduces the idea of value flowing to customers. This should raise awareness of anything that is acting as a block or restriction to the flow. Where are the inefficiencies, delays, waste, inflexible thinking or arbitrary policy obstacles in your organisation that prevent value really flowing? Could this be where you could create competitive advantage?

It is not just in the main or final part of the value-stream that obstacles to flow exist. Almost everywhere upstream in your supply chain you will find obstacles to flow. Suppliers of materials, sub-contractors and information sources all will have scope to improve flow, sometimes through innovation.

This applies just as much to the service sector as well as in government and not-for-profit sectors. Indeed there is probably more opportunity in these areas than in manufacturing and process industries.

A final thought. Customers, service users, patients or other beneficiaries are essential suppliers of information to the value flow, particularly in service and information-based sectors . Have you looked to see whether your organisation has built barriers or obstacles to this essential information flow? For example, do you have outsourced call centres where unskilled staff operate in a target-driven environment resulting in a huge percentage of 'dropped calls'? Just a thought.

So do you use a 'picture' like the 2F diagram or flowcharts of how all the value adding processes in your business or organisation join up to serve your customers? How can you tell whether value is flowing with minimum restriction to your customers?

Is yours a customer-focused business?

The Clark, Peterson, Pitt Flow & Feedback Diagram

The Clark, Peterson, Pitt Flow & Feedback Diagram

Did you see my last blog? In it I wrote that it is necessary but not sufficient for businesses to think of and describe themselves using only financial statements or a conventional organisation chart. Putting the spotlight or focusing on customers is the essential additional ingredient needed for sustainable success. Customers need to be at the centre of thinking and action in every business. Customers are the source of profits and pay your wages.

So how are you going to do that? You were introduced to the Flow & Feedback (2F) Diagram as way to put the customer at the heart of everybody's thinking in the business.

Why a diagram? Because it shows relationships more clearly. There are two main sets of relationships in the 2F diagram that make it different to some other models if you want to be a customer-focused organisation. They are the flow of customer value-adding activities and an organisational learning feedback loop. This blog focuses on the customer, the most critical element in value-adding flow.

Customers: Who are those guys?

Depending on how you are using 2F, there are two main types of customer: external and internal. The external consumers are why your organisation exists. Therefore they must be identified and you need to understand their needs. Internal customers are the next person, team or department who takes the outcomes from a process. Internal customers and suppliers help the frontline help the external customer.

You also need to consider secondary customers and other stakeholders such as the community. Think about who else is affected by the outcomes of your business or organisation. Sometimes they are paying the bill, like taxpayers via government grants!

Why bother?

You just make a sale and that's it isn't it? Nope! It is so much more. Frederick Reichheld said it can cost five times more to get a new customers than to retain an existing one. And, not only do you want them to come back, you want them to bring their friends or perhaps make a referral or recommendation. All this saves money that feeds into your profits and sustains your success.

I get that, but why is it more than making the sale?

The sales transaction and the service delivery that may follow are only part of it. The aim should be to create a positive experience pre-sale, at the point of sale and post-sale. This has been called the total customer experience (TCX). Such a customer-focused approach adds value to a company by enabling it to differentiate itself from competitors who do not offer the same experience. Using 2F shows people where they are in relation to the customer and the TCX.

You never know who in your organisation will 'touch' the customer. It is all of these contacts, not just making the sales, that influence whether customers will buy again and bring their friends. When customers come into contact with anyone in your business this was called a moment of truth by Jan Carlzon. He was CEO of the SAS airline and said that they had 50,000 moments of truth every day! How many moments of truth are there for your business? Do you know who is making them?

So the benefit of using the 2F diagram is that it helps everyone understand that yours is a customer-focused organisation. It helps your people never lose sight of the customer. So don't keep it locked away in a drawing or a computer, make it part of everybody's everyday work.

Perhaps then, some good reasons for ensuring that yours is a wholly a customer-focused organisation and using 2F diagram to help?

Customers? We have customers too?

Ever noticed that when asked to describe their business many people seem to default to a set of financial accounts and or the conventional organisation chart? Much conventional wisdom seems to want you to believe that achieving success only requires knowing about money and or power hierarchies.

Now don't get me wrong, money and power are realities of every business or other type of organisation. It's just that only considering either or both is severely limiting to sustainable success. Those that truly understand what it takes to have sustainable success know that much more is required.

Achieving sustainable success, say business thinkers such as Peter Drucker, W. Edwards Deming and Joseph Juran, is about focusing on understanding and meeting customer needs, as it is this that leads to customer satisfaction. All else flows from this. Unfortunately there are so many distractions like texts, emails, Twitter, Facebook and so on. Then there is the way detail draws your attention away fromthe biggest picture. So how can you keep your organisation focused on the customer?

Well, whatever you do it probably helps to use some sort of visual representation to act as a constant reminder. Why visual? Because this begins to remind people that, as Leonardo da Vinci said, everything is connected to everything else. The power of the picture is that it acts as a reminder that there are relationships between everything and everyone inside and outside your business that together connect it to the customer.

Let's build what we might call a picture of your business. Since success depends on customers, it makes sense to start with them. You may call them clients, patients, service users, beneficiaries or consumers.

At any stage in the relationship with your customers they may be in contact with anyone in your organisation. These 'moments of truth', as Jan Carlzon called them, determine customers perceptions of your business and whether they will buy from you. It is customers who ultimately generate profits and pay the wages.

Next in creating a picture of your business, you need to show customer relationships with your business. This needs to connect value-add flows to customers, possibly including a supply chain or sequence of steps in service delivery.


That value chain will be literally supported by processes or functions such as accountancy, HR, quality, ICT (including the internet), transport (possibly in the value flow), facilities and more. Effective support processes and functions are vital, but not the reason the business exists. So these will be added to what we shall call the operational level. A critical question everyone in support needs to ask is whether they are making a positive contribution to what customers perceive as added value that meets their needs.


In addition to outcomes bought by customers there other outcomes. Four are suggested below to complete the operational picture. Clearly business activity will generate costs that need to be understood. Equally clearly there will be a financial outcome of some sort that relates to sales and costs. As a consequence of activity there will be waste and of course there is a relationship with costs and hence the financial outcome. What might not be so obvious is that the morale and motivation of people in the business is an outcome of business activities and the way, via values and culture, the business is run. This may well be reflected in the other outcomes and to how sustainable the business is.


Sustaining success in a fast changing world means that the organisation needs to continually adapt both to changing customer demands and the external environment. Therefore to make this picture of your organisation even more powerful a learning, feedback and change loop is added to drive adaptation to the ever-changing situation. We call this whole picture the Flow & Feedback Diagram (2F); value flows to customers and feedback enables the business to adapt and achieve sustainable success. It puts into practice the Study-Act-Plan-Do learning cycle that is central to continual improvement.

2FOutlineRR Stages FIN.png


As George E.P. Box once said, all models are wrong some are useful. Anything that simplifies reality is 'wrong'. However, to what ever extent that the 2F diagram simplifies reality, its primary purpose is to constantly remind everyone in your business to think about everything in relation to your customers and their ever-changing needs. That increases the likelihood of having sustainable success. How might you use or adapt this diagram to stimulate different thinking about your business?

Future blogs will expand on this drawing on my book Picture Your Business, which is still available, click here. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request  from me either via a Linkedin message or by emailing alanclark@keybiz.com.