Category: Tips

We are pleased to present this guest blog post by Gregg Stocker, a lean advisor for Hess Corporation with over 20 years experience in a variety of disciplines including operations, manufacturing, human resources, quality, and strategic planning.

What everyone in a company does can be reduced to one of two functions: to serve the customer or someone who does.

~W. Edwards Deming

One of the most basic but difficult philosophies to ingrain into the culture of an organization is the internal customer concept.  The silo mentality is so common today that it interferes with the ability to focus on the needs of anyone who is in another part of the company.  The level of distrust that exists tends to be so high that we feel others will take advantage of us if we focus on making their jobs easier (or that making others look better will in some way jeopardize our own jobs by making us look worse).

I once facilitated a lean project with a technical group in a global organization.  When I asked why there were no representatives from the operations team (who directly received the output of the technical group), those in the meeting commented that the people in operations were lazy, did not understand what they needed, and would ask for anything that would make their jobs easier without regard to the effect it had on the technical group.  The discussion identified a serious problem in the organization that had to be resolved before the lean initiative had any chance of being successful.

Looking at it Objectively

Since very few jobs deal directly with external customers, it stands to reason that most people only work to serve internal customers.  If people are unwilling or unable to satisfy their internal customers, the organization has very little chance of satisfying its external customers on a continuing basis.

If the organization is truly committed to satisfying customers, the people in finance, IT, maintenance, human resources, and many other parts of the organization must develop a clear understanding of how the work they do impacts the external customer by serving internal functions.  Without an emphasis on internal customers, these same groups can begin to think that the work they do is an end in itself.  Thiscaptured market mentality – believing that others have no choice but to accept the output provided – often leads to process changes that reduce costs for these groups without regard to the effect on internal customers.

Perhaps the best example I’ve seen of a company that clearly understands the importance of internal customers is the inverted pyramid at Nordstrom.  The pyramid (shown on the Nordstrom website) depicts the organizational structure with customers at the top and each successive layer supporting the one above it.  As shown in the figure, customers are supported by sales and support people who, in turn, are supported by department managers, etc.  The objective of the pyramid is to make it very clear that customers are at the top of the company’s priorities and the job of everyone is to support those who directly serve customers.

Achieving an Internal Customer Focus

There are a number of steps to achieve an internal customer focus within an organization.  The obvious first step is to assure that the company’s senior leaders believe in its importance and are committed to making it happen.  If the company has poor teamwork and/or a number of functionally-focused leaders, there is very little chance that they will understand or be concerned with those in other parts of the organization.

Beyond assuring a level of understanding and commitment from those at the top of the organization, the following steps will help institute an internal customer focus:

1. Encourage open communication with internal customers and suppliers on how to improve the quality of what is provided to external customers;
2. Talk with people at all levels to better understand the reasons why a focus on internal customers does not exist.  The interviews are best conducted by someone outside of the organization if the level of fear and distrust within the culture will prevent people from openly expressing their thoughts;
3. Discontinue the practice of promoting people who do not understand the company’s overall system and how the work performed by the teams they lead is used to help others satisfy external customers.  Leaders who are generalists tend to accept and practice the internal customer concept more than those who are specialists and focus more on their functions than the company as a whole;
4. Include internal customer input in feedback systems and hold people accountable for continually improving the products and services they provide internally;
5. Continually coach team members and lead by example;
6. Be patient and consistent.  Like any change initiative, shifting the culture to increase focus on internal customers can be a long-term process that will be tested over and over again as the change occurs.

I have found that, when facilitated effectively, value stream mapping sessions can be very beneficial in communicating how the output from one function becomes the input for another.  It also provides a method for identifying the problems that occur in the hand-offs between internal suppliers and internal customers.

Shifting the culture to one that is focused on satisfying internal, as well as external, customers often results in the identification of deeper cultural issues that need to be addressed before success can be achieved.  As these issues are resolved, however, the improvements in teamwork and communication will translate directly to the customer in the form of improved products and/or services.