Most professions develop peculiar vernaculars which allow practitioners in that profession to communicate precisely and effectively. The same holds true for many other human undertakings outside the professions.

Oddly, except for terms borrowed from accounting and statistics, business is almost devoid of a precise, descriptive, and long-established vernacular. This is probably okay in a mass production environment (in the sense that most things, no matter how dysfunctional, are “okay” in a mass production environment) but in a Lean environment the lack of precision creates a great deal of trouble.

Consider, for example, the definition of the word “customer”.

Most dictionaries define customer something along the lines of “a person who purchases goods or services from another.”

I think most business people would accept this definition as clear and precise. But is it? Is it a useful definition? I think not.

For example, what do you call a person who shops carefully but chooses not to buy from you, or chooses not to buy at this time? Is he not a customer in some sense?

Our experience tells us this is a customer but, based on the failure to purchase, the commonly accepted definition tells us it is not. This mismatch between experience and language, the imprecision and uncertainty, should trouble a Lean practitioner

Back to our definition. What if a person does actually purchase goods or services from another? Who is “another”?

During the summer a Home Depot store may have several hundred employees, but only a few dozen of them are cashiers — the “another” from whom the customer actually purchases goods or services. By this definition, most Home Depot employees have no customers.

This is stupid, you might argue, because they are purchasing from Home Depot. Home Depot is the “another”.

I could, no doubt, come back with some cogent counter argument, but I won’t because you’re right, it’s stupid.

It’s stupid because the common definition of customer, as we can begin to see, is seriously flawed. The definition doesn’t begin to describe customers as we understand them. Understanding who or what a customer is, and being able to accurately transmit that information is, it seems to me, a foundation of business. Yet business lacks precise language to carefully describe one of the most basic concepts in business, the customer.

Compare this lack to the very specific language used by people in the medical profession, by architects and engineers, and by people involved or interested in various sports:

Based on an evaluation of your complaints of knee pain, your family doctor refers you to a specialist, noting in the record that the patient presents with symptoms consistent with inflammation of the medial sinovial plica.

An architect questions an engineer about the large beam specified on a drawing. The engineer replies “There is a real high point load here. A smaller beam would have been fine in bending but I need the glulam for the shear.”

During a sailboat race the foredeck crew notices that the spinnaker wasn’t hauled all the way up. After some discussion, the driver says “Okay, in about 30 seconds I’m going to take this guy up. When I do, dump the sheet and take the halyard to the top. When it’s at the top, Joe holler ‘Top!’ and I’ll bear off. Okay?” “Okay.”

Baseball fans can talk for hours about baseball statistics — Runs Batted In (RBI), Earned Run Average (ERA), and the like.

It doesn’t matter that you or I understand these conversations. It matters that the people interacting were able to communicate ideas effectively. Most professions and most hobby and sporting activities develop their own precise and specialized vernacular so ideas are easily transmitted.

As complex as business has become, it’s very surprising that business has little such language. As I say, it doesn’t seem to be a problem for mass producers, but it’s a serious problem when trying to understand Lean.

Consider, for example, that one of the first things the Lean practitioner must learn is mapping the value stream.

Who determines what constitutes value? When in doubt, the customer determines.

Who is the customer? As we have seen, we don’t really know. Or maybe we do know, but we are unable to say with any precision.

With no clearly defined customer to say what is valued, who is to say what constitutes value for purposes of value stream mapping? In all likelihood, management will fill the vacuum and determine what constitutes value.

So how does management know what is valued? It depends.

Some of value is up to good management to recognize, but a lot of it, as Deming recognized, is best identified with customer input. Maybe if you have really good managers with a lot of experience in a relatively small business, they know intuitively and this will work.

But in a larger business with ranks of middle managers, or one with its share of mediocre or mendacious managers, it’s easy to see how the result of management defining value could be very similar to a mass production environment. After all, somebody must have valued the infamous large inventories of the mass producer or the mass producer wouldn’t have large inventories.

This is but one example of how the lack of precision about who or what a customer is creates real problems for the Lean enterprise. Proper insight into who is a customer will transform your understanding of Lean.

In my next several posts I will try to develop a more practical definition of “customer” and show how a precise definition is essential to the Lean practitioner.

 

Copyright 2014 by Paul G. Spring. All rights reserved.