Measuring The True Impact of Process Improvement

The Usual way to measure the impact of Process Improvement is to do Before and After measurements.

However here is a recent study that says, that doing just a Before and After measurement may be underestimating the true impact of Process Improvement. Here is the abstract of the study, The competitive impact of service process improvement: Examining customers’ waiting experiences in retail markets by Piyush Kumar of the University of Georgia.

Piyush Kumar contends that in competitive retail markets any Process Improvement implemented by one competitor not only increases Customer Satisfaction at that competitor but increases Customer Dissatisfaction at the Competitor’s also. This is what Piyush Kumar means by underestimating!

Very interesting findings! This sort of agrees with the way Kano Analysis is used to determine product or service features needed. Kano Analysis usually points to the fact that any feature or service innovation that is offerred as a Bonus or Additional Feature becomes an expected feature as time goes on.

Five years ago, airbags in cars used to be only for the driver. Now additional airbags for the driver and passengers are slowly becoming standard in all cars! Similarly GPS based Navigation devices are special accessories in most cars. Five years ago they used to be found only in the most expensive cars. Five years from now they will become standard equipment!

Service Processes and Improvement in such processes also become expected from all competitors when one competitor implements it! This Christmas Season, Wal-Mart actively advertised that they have added additional people at the checkouts so that there would be minimal waiting time at the checkout counters! They must have seen their competitors advertising that at their stores there is no waiting time!

What this means is that Continuous Process Improvement in services may be very important, even if one of your competitors gets the ball rolling!

The ability to learn faster than your competitors may be only sustainable competitive advantage - Arie de Geus