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2015-04-15 CLIP customer loyalty NPS ABB QO M_Berthus at CQI final 169

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Presentation by Michel Berthus at CQI Conference in April 2015: Customer Loyalty Improvement Program.
ABB Quality and Operational Excellence.

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2015-04-15 CLIP customer loyalty NPS ABB QO M_Berthus at CQI final 169

  1. 1. Customer Loyalty Improvement Process (CLIP) ABB Business Function Quality and Opex April 15th, 2015, Michel Berthus, ABB, Group Head of Quality Management
  2. 2. Customer Loyalty Improvement Process (CLIP) Contents ABB Group CLIP process NPS Journey Issues Resolution Results Way Forward 3-7 8-14 15-21 22-29 30-32 33-36
  3. 3. A global leader in power and automation technologies Leading market positions in main businesses ~150,000 employees Present in countries +100 Formed in 1988 merger of Swiss (BBC, 1891) and Swedish (ASEA, 1883) engineering companies In revenue (2013) billion 42$ © ABB Group April 8, 2015 | Slide 3
  4. 4. How ABB is organized Five global divisions © ABB Group April 8, 2015 | Slide 4
  5. 5. ABB Valued Behaviors Value Pairs 1. - Safety & Integrity 2. - Customer focus & Quality 3. - Innovation & Speed 4. - Ownership & Performance 5. - Collaboration & Trust
  6. 6. Quality Culture in ABB Overview - Definition of Quality High Quality Operations; § deliver exactly what their customer ordered, § exactly when they wanted it, § functioning exactly as they expected, § with any issues resolved quickly and effectively § at competitive levels of cost and capital employed This includes; § Quality of the Offering - Marketing & Product Mgt § Quality of the Offer - Sales § Quality of Basic Design - R&D § Quality of Customised Design - Engineering § Quality of Purchases - Supply Chain Mgt § Quality of Manufacture - Manufacturing § Quality of Delivered equipment - Manufacturing § Quality of Delivered projects - Project Mgt § Quality of Delivered services - Service
  7. 7. Driving Excellence - Golden Rules Checklist 1. Can we measure Customers level of satisfaction with our company to a level of robustness that is accepted by the CEO and EC ?? 2. Can we quantify the cost of waste in our company, in $$’s, to a level of robustness that is accepted by the CEO and EC ?? 3. Is there a department, with full time people, reporting to the CEO or EC, with responsibility to lead improvements in performance, customer satisfaction and OPQ ?? 4. Is that department supported by a competent network of Q&OPEX people across the company who share the responsibility to drive real operational performance improvements ?? 5. Does our company have an “own brand” performance improvement methodology, toolkit, training & coaching program to build widespread capability in systematic performance improvements ?? Yes No © ABB Group April 8, 2015 | Slide 7
  8. 8. RESOLVE Root Cause Analysis COMMUNICATE back to Customer CLARIFY with Customer CAPTURE Survey or other feedback The ABB Customer Loyalty Improvement Process (CLIP)
  9. 9. ABB Customer Loyalty Improvement Process (CLIP)
  10. 10. © ABB Group April 8, 2015 | Slide 10 Customer Loyalty Improvement Process (CLIP) Account Managers Local units Q and OPEX Managers Roles and Responsibilities of key actors § Lead the “Capture” and “Communication” steps of CLIP § Follow up progress in the “Problem Resolution” step of CLIP for their customers § Escalate as needed to assure a timely response § Lead the “Problem Resolution” step of CLIP for their customers § Apply 4Q Root Cause Analysis for sustainable resolution § Support the “Capture” and “Communication” steps of CLIP § Train and coach all actors engaged in the CLIP § Support / facilitate units to achieve sustainable resolution § Continuously improve processes methods and tools
  11. 11. Customer Satisfaction Survey The Follow Up RCA or other solution Follow up by AM Submit CCRP to RU NPS Red Card Feedback to Customer Capture / Confirm Resolve Communicate Follow Up Process § Non-anonymous red cards automatically generate a CCRP § Account Managers follow up with customer and clarifies/confirms complaint details § CCRP submitted to correct resolving unit § Resolving unit carries out RCA Root Cause Analysis if appropriate but responds in any case ri customer complaint § Solution communicated back to customer by account manager § KPI’s: Assigned on Time (AoT), Resolved on Time (RoT), Completed on Time (CoT).
  12. 12. § Main Customer Contact must contact detractor within 14 days to carry out detractor follow up and forward the complaint to the relevant unit, irrespective of the product the customer has evaluated. § Failure to follow up is escalated to the CEO. Regular alerts to Main Customer Contact and line managers as deadline approaches. Performance relative to deadlines is closely monitored. § Root Cause Analysis and proposed solution returned to Main Customer Contact for discussion with customer. § Main Customer Contact either closes complaint or returns complaint to resolving unit for further work. The complaint may only be closed with the customer’s agreement. CLIP @ ABB Rules: follow up with the customer
  13. 13. § Red and green cards are analyzed at all levels and action plans established for top 3 systemic issues. § Where appropriate a root cause analysis (RCA) is carried out in accordance with ABB’s “4Q” methodology § RCA is built in the Complaint Management System with offered solutions when being returned to Account Manager / Customer for completion § Goal is to have NPS/CLIP as agenda item at all management meetings CLIP @ ABB The internal follow up rules
  14. 14. CLIP@ABB journey Commitment to Customer Service NPS Piloted NPS was piloted in major ABB countries worldwide. Link to CCRP NPS was linked to ABB’s global complaint management tool to enable tracking of follow up Global Process The Customer Loyalty Improvement Process (CLIP) was established, linking customer feedback, issue resolution and closing the loop Transactionals ABB introduced transactional surveys for service and projects. Promoters Over 50% of responses in ABB’s annual relational survey were from Promoters 2011 2012 20132010 2014 6’000 Responses 15’000 Responses 22’000 Responses 28’000 Responses 32’000 Responses NPS becomes part of the ABB Group scorecard at all levels
  15. 15. Net Promoter Score to capture customer loyalty 3 Categories: Promoters, Passively Satisfied and Detractors Promoter Passive Detractor Extremely likely to recommend 9-10 0-6 7-8 Extremely unlikely to recommend Promoters are loyal, enthusiastic fans. We call this group “passively satisfied” because they are satisfied—for now. Detractors are unhappy customers and account for more than 80 percent of negative word-of-mouth. They have high rates of churn and defection.
  16. 16. NPS @ ABB Selecting a Category Select a category (23) for a red/green card
  17. 17. NPS @ ABB Submitting the Survey § Remain anonymous? § Submit your survey
  18. 18. NPS @ ABB Selecting a Product / Writing a Comment § Write a comment explaining why you gave the red/green card that you did § Select the product(s) that your comments apply to
  19. 19. World Coverage by NPS Country Surveys NPS @ ABB Manila Shanghai Tokyo New York Mexico-City Seoul Mumbai São Paulo Jakarta Los Angeles Delhi Osaka Calcutta Moscow Buenos Aires London Cairo Teheran Karachi Dhaka Berlin Chicago San Francisco Toronto Washington Rio de Janeiro Paris Istanbul BeijingMadrid Oslo Vienna Sankt-Petersburg Sydney Canberra Perth Astana Ulaanbaatar Samara Novosibirsk Anadyr Cape Town Durban Windhoek Mogadishu Asmara Accra Dakar Niamey N‘Djamena Fairbanks Seattle New Orleans San José Brasilia Porto Velho El Golea Benguela Mbuji-Mayi Maputo Gibraltar Darussalam HarareLa Paz Santiago Quito Lima Darwin Melbourne Wellington Port Moresby
  20. 20. © ABB Group April 8, 2015 | Slide 20 NPS Red & Green cards given by all customers 21’367 red cards & 47’976 green cards (excluding user created categories) in 2014 Displayed as a % of total number of red/green cards 15% 10% 5% 0% 5% 10% 15% 20% Lead time On-time delivery Complete and timely quotes Technical support Issue resolution Ease of doing business Spare parts Partnering for mutual benefit Services ability Terms and conditions Logistics, billing and documentation Training Product / System quality Project Management and Engineering Ability to manage complexity Commissioning support Engineering / design capability Product / System features Technology / innovation Industry and application knowledge Product / System operating efficiency Environment, Health and Safety
  21. 21. Example: NPS Transactional in Projects with external customers Identifying priorities for improvement By checking the cards distribution among categories you can easily identify the most important areas that need to be improved
  22. 22. CLIP @ ABB Red Card Resolution 16‘23616‘236 69‘69669‘696 17‘85417‘854 16‘236 69‘696 17‘854 Almost 70‘000 green and red cards in 2014 17’854 red cards entered into Complaint Management System. 16‘236 resolved and closed
  23. 23. Own brand Improvement ABB Branded 4Q Improvement Methodology 4Q Process Q1 - Measure Q4 - Sustain Q3 - Improve Q2 - Analyze Define opportunity Investigate to understand the current state in detail. Identify and confirm root causes of the problem. Develop, pilot, and implement solutions that eliminate root causes. Maintain the improvements by standardizing the work methods or processes. Input Triggers Customer NPS OPQ cost of waste Results Customer satisfaction EBIT improvement Safety improvement Leadership Resources, Involvement, Motivation, Recognition Continuous Improvement of ABB 4Q SkillsinapplyingABBOPEX ToolsandTechniques © ABB Group April 8, 2015 | Slide 23
  24. 24. ABB 4Q Program – overview end 2014 ABB - 150’000 employees – in 100 countries / 125 Product Groups / 3600 Local Units 12’503 - 4Q trained people doing improvement projects (target 10% of ABB) 562 - 4Q Trainer / Coaches (target each ABB roof has a T/C) 102- 4Q Master Trainer / Coaches 4Q PMOEducation of QTC’s to become Master TC Education of Certified 4Q project leader to become TCTraining & Coaching of employees to become 4Q Certified Run and lead the 4Q program. Insure global deployment and integration into ABB’s culture Goal is to have 50% of the workforce trained by end 2017
  25. 25. Red Card resolution level 1 – CCRP Status
  26. 26. Q1 – Measure – Required on all complaints § Each field is a required field in which you need to provide a description of what was done. § Attachments which support the Q1- Measure portion of the RCA can be added. § For further details about ABB 4Q you can click on the following link ABB4Q § © ABB Group § April 8, 2015 | Slide 26 Hover over any field or button and system will show help text
  27. 27. Q2, Q3 & Q4 – RCA Required Requirements for these additional sections is the same as for Q1, on the previous slide. There is also a link to “Tools for RCA” in each of these sections. There you will find tools for Measuring, Analysis, Solution finding. Any document created using these tools can be attached to the appropriate section. § © ABB Group § April 8, 2015 | Slide 27
  28. 28. Customer Loyalty Improvement Process – Level 2 Top 5 Systemic Issues LPG / Unit LBU / LD BU / DIV top5 top5 top5
  29. 29. © ABB Group April 8, 2015 | Slide 29 Complete & Timely Quotes KPIs On – time delivery DemandManagement DesignforValueChain ValueChainSynchronization SupplyNetworkDesign Processesandtools CustomerCommunication SupplierCommunication Competences IssueResolution Leadership & Culture Systematic Problem Solving Collaboration Communication & Awareness Customer Loyalty Improvement Process – Level 3 Topic Inter-dependencies § Issue Resolution topic works mainly on solving the behavioral and cultural issues § “On Time Delivery” and “Complete &Timely Quotes” work mainly on technical issues, processes & tools issues § The three topics are mutually supportive and highly inter-dependent
  30. 30. Results – NPS going well, on target for 2015 Both on NPS score and Red/Green cards/respondent Group NPS target 2015 = New 4Q CLIP 16% 22% 29% -5% 35% Top 3 RT5 New CCRP Red & Green cards per respondent NPS score increasing in line with 2015 target, set in 2010 Participation increasing year on year On average per respondent; Red cards decreasing Green cards increasing 50% 44%
  31. 31. Results – perceived Product and Systems Quality improving Quality of Products and Systems drive <4% of Red Cards (982) = Quality escapes from Factories and Project Sites Top 10 customer issues drive 70% of Red Cards (17660) = Quality escapes in white collar functional processes rather than on end products Overview – 2014 NPS Red Card ranking of customer issues § Quality of ABB products and solutions delivered to Customers measured by NPS red card ranking § In NPS 2010, Quality was ranked 10th top customer issue, in 2014 Quality was ranked 13th § Primary Quality failure root causes lie in upstream functions, not in factories or on project sites 13th
  32. 32. Working simultaneously for the Customers and the Shareholders Positioning NPS / OPQ per Business Unit § Quality finally delivered to Customers is measured by NPS red cards ranking § Quality momentum is measured by how well OPQ is being attacked through OPEX projects § Having Quality in the Top 10 NPS Red Card drivers must become unacceptable § Lack of transparency on OPQ (<6% COS) must become unacceptable § Lack of Opex projects to attack OPQ must become unacceptable § Quality out of Top 10, OPQ transparency >6% COS & many Opex projects = Green § Quality in Top 10 red card attractors = Red § OPQ transparency <6% COS = Red § OPQ transparency >6% COS but few OPEX projects = Red BU Colour Coding Quality Zone, the place to be, and be green ABB (10.2%) ABB
  33. 33. The Way Forward - 1000 Day Quality Program Part of Next Level ABB Strategy 2020 Key Information Objective 1. Embed customer focused quality behavior (CLIP & bring "Voice of the Customer" to all of ABB ) Objective Leader xx Incremental Impact by 2020 $xM & yTransactional NPS points Level 1 Projects Project Leader 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Deploy Transactional NPS surveys to internal Sales, Service, Project & Site Mgt in all BU’s Recover and develop units having lowest Transactional NPS scores to improve quality Execute specific Customer Quality Improvement Plans for all Group Accounts Execute specific Customer Quality Improvement Plans for all Strategic Accounts Upgrade and deploy Customer Loyalty Improvement Process (CLIP) … … BU’s contributing to Objective DMPC DMDR DMMG DMRO PPMV PPTR PPHV LPED LPBS LPCP LPLS LPWA LPCW PAMP PAOG PACT PAMA PATU PSPG PSGS PSNM PSSS PAPI
  34. 34. KPI #1 - KPI #2 - KPI #3 - Customer Perception kpi’s; NPS %age - high level, infrequent, customer loyalty sensing Transactional Q - internal survey, Sales, Service, PMgt and Site Mgt Red Card Count - customer rating of poor Quality from ABB Green Card Count - customer rating of good Quality from ABB Operational Quality kpi’s; On Time Delivery - Customer Requested OTD, in the R.E. dashboard Issue Resolution - CCRP closure performance, in the R.E. dashboard Warranty spend - proxy for Field Failure Rate, in the R.E. dashboard OPQ - Process waste (>3bn $/yr), in the R.E. dashboard Cost Reduction - $ from OPEX + SCM, in the R.E. dashboard Opex projects - $ value of OPEX projects, in the R.E. dashboard Project slippage - Number & value of projects margin slippage Process maturity - Process maturity assessment scores First Pass Yield - %ge, works for product businesses locally R&D project Q - On-time completion & requirements spec. compliance Primary program KPI’s, targets set and followed up, by BU 1000 Day Program: Quality Flight Plan – KPI’s
  35. 35. Challenges § CLIP is here to stay. It is not a fad. § Convincing the organization that asking a customer what they think is always the right thing to do in any culture § Focusing on the essentials and not over-analyzing before taking action § The issue is more important than the score § Demonstrating that the follow-up can be a great sales opportunity without even talking about a sale § Competing with the pressure of day-to-day business Customer Satisfaction @ABB Retrospective
  36. 36. § Deploy Transactional NPS surveys to Sales, Service, Project & Site Management in all Business Units § Recover and develop units having lowest Transactional NPS scores to improve quality § Execute specific Customer Quality Improvement Plans for all Group and Strategic Accounts § Upgrade Customer Loyalty Improvement Process (CLIP) § Campaign to increase awareness and understanding of the “external focus” cultural imperative, including training curriculum and establishment of worldwide CLIP Champions Network Customer Satisfaction @ABB Next steps on the journey