by John Guaspari

Here's possibly the least surprising statement you'll see this month: The internal-customer model has accomplished good things for many organizations. As everyone who reads this magazine knows, the model emerged as a way to get people to look out beyond the ends of their noses and recognize that they are part of a larger work process. It gives people a hard target at which to aim while doing their work, as in the following hypothetical monologue: "George is my internal customer. George needs X. It's my job, therefore, to provide him with X." Such thinking encourages focus and a clear sense of purpose. These are good things.

 In fact, with complex, convoluted processes, diligently using the internal-customer model can dramatically improve the odds that the process's ultimate output will hit the mark. And in a world of relative advantage where the working motto is, "You don't have to be perfect; you just have to be better," this can be a very important edge to have.

 However, taking a dangerous step closer to sacred cow territory, it must be said that the internal-customer model is far from perfect. It comes with some serious drawbacks, which have to be acknowledged and overcome.

 First, the model seems to suggest a pure vending relationship between internal customers and internal suppliers, which, in turn, breeds a tendency for people to be too compliant when dealing with their internal customers, as in the following exchange:

 Internal supplier: What is it that you want from me?

 Internal customer: I want you to do X.

 Internal supplier: Then X is what I'll do. After all, the customer is always right, no?

 Well, no. Or at least not always right enough to require a total abdication of judgment on the part of the internal supplier.

 First cousin to this vending relationship is the tendency for unproductive--and sometimes unseemly--dominance/subservience relationships to spring up:

 "I'm your internal customer!"

 "Yes, sir."

 "Your job is to do what I say!"

 "Yes, sir."

 "Then do it!"

 "Yes, sir. Sorry, sir. Will there be anything else?"

 And though, at an intellectual level, everyone knows this isn't the way it ought to be, we also know that the world doesn't always operate on a purely intellectual plane. People like being in positions of power and authority, and sometimes... well, sometimes they just can't help themselves. If I may invoke the technical quality phrase for this phenomenon, sometimes they just pull that sort of crap.

Playing telephone

 It's a big problem, this assumption of pure, pristine linearity. What do I mean by that? Take a look at the simple process illustrated below.

 Here, No. 1's job is to serve No. 2; No. 2's job is to serve No. 3; No. 3's job is to serve No. 4; and No. 4's job is to serve the customer directly. We assume, if all of this happens, that the customer will wind up receiving the maximum possible value. Alas, this is unlikely. Why? Because somewhere between No. 1 and the customer, the signal tends to fade. Think back to the game called "telephone" that you played as a child. Remember? The first child whispered a message to the second, the second whispered what he or she thought was the same message to the third, the third to the fourth, and so on until the final child proudly proclaimed the message that he or she thought had been heard, but which invariably bore little resemblance to the original. The quality moral here is that no matter how perfectly n serves n+1, it's no guarantee of maximum customer value and ultimate customer satisfaction. Invariably there's friction loss, so to speak, in the hand-offs.

 It's for these and other reasons that, for years now, I've inveighed against the internal-customer idea. I've argued that the long-term problems introduced by adopting such a mind-set far outweigh the short-term gains that could be realized by its use.

 I've come to realize, however, that this has proved a fairly quixotic task. Why? Because the internal-customer model is understood, well-established and, despite its drawbacks, a net plus for organizations that use it. Conclusion: The windmills won. I shall cease tilting against them forthwith.

 So the question should no longer be, "How do we replace/supplant the internal-customer model?" but rather, "How can we acknowledge the validity of the model along with its drawbacks and wind up with even better results and performance?" Or more concisely, "How can we leverage the internal-customer model to even greater effectiveness?"

 It's with this last question in mind that I now propose a 10-step approach to creating more value for--no, make that creating more value through--your internal customers.

Step 1: Recognize that the internal-customer model is a means to an end rather than an end itself.

 Yes, people realize this intellectually; they say so all the time. Want to know the sure sign that not everyone has internalized this difference between ends and means? Whenever you hear somebody say: "Oh, I have nothing to do with real customers. All of my customers are internal," that's when you know you still have work to do. When people lull themselves into thinking their reason for being is to serve co-workers, however admirable this might seem, that can have undesirable results for a company's real customers. Everybody affects the ultimate customer, even when they believe they don't.

Step 2: Change the nature of the internal-supplier/customer relationship from vending to partnership.

  This goes back to the, "I'm your customer and it's your job to do what I say, so do it!" point made earlier. An internal supplier shouldn't ask, "What can I do to serve you?" but rather, "How, by my serving you better, can you and I collectively serve our real customers better?" The mode of operation should not be servility, but collaboration. The entire organization must strive to match the internal suppliers' capabilities with the internal customers' real needs--while always framing those needs in terms of delivering the most value to the real customer.

Step 3: Change the interaction between internal suppliers and customers from interrogation to conversation.

 When an internal supplier approaches an internal customer, the attitude shouldn't be of a supplicant approaching a benefactor, clipboard in hand, hoping to divine a kernel of truth or, better yet, approval from one's superior. It should be one of real engagement, real conversation, a genuine exchange of content and affect. The discussion shouldn't be limited to questions of an "on a scale of one to five, how well did I serve you last month?" nature.

 Open-ended questions, the kind designed to get a deeper understanding of the internal customer's world and how the internal supplier can play a more effective role in it, should be asked. Questions like, "What's going on in your business these days?" "What are your three biggest issues?" "What surprises have you gotten in the past six months? Pleasant ones? Unpleasant ones?" "What have you read lately in the industry press? What did you learn from it?" "If you could wave a magic wand and change one thing about your job, what would that be?" "What about your job gives you the most gratification?" "What about your job drives you the craziest?" "What do you see as the biggest threat on the horizon? The biggest opportunity?" "What keeps you up at night?" "What enables you to sleep like a baby?"

 These kinds of questions can be a bit difficult to ask, but that's all part of the process of rethinking this internal-customer/supplier relationship. Once people get a better sense of what it's really like to be a true collaborator in the quest for real customer value, they will be more comfortable asking--and answering--such questions.

Step 4: Engage in "skip step" conversations.

 If you're No. 1 in the illustrated simple work process, your focus tends to be on No. 2. That's quite natural and also quite correct. But what's to keep you from engaging in a similar kind of conversation with No. 3? After all, if your sub-goal (i.e., your piece of the means to the end) is to better serve No. 2, doesn't it make sense that you'll do that better if you have a clearer understanding of No. 2's world, a key component of which is the way in which he or she serves No. 3? And in case you're worried about the political ramifications of such a "skip step" conversation, there's no reason why No. 2 shouldn't be in the room with you when you talk to No. 3. Or that you, No. 2 and No. 3 can't be in the same room when all of you engage No. 4 in conversation. The point is to look at the idea of internal customers in a slightly different way, to see them as channels through which value can be delivered all the way to the real customer, not as way stations at which it is dropped off.

Step 5: Get people to raise their sights higher.

 OK, we've gotten the internal supplier to take a partnership role with the internal customer. We've changed the way they engage each other. And, as a result, it's more likely that the internal supplier will provide service, not servility, of greater value to that internal customer.

 But you have tens, hundreds, maybe thousands of internal-customer/supplier relationships at work at any given moment. So, how sure are you that all these "value vectors" are pointing in, even roughly, the same direction? How do you know that what's of most value to the accounting department--i.e., the internal customer as represented by the sales rep submitting his or her travel and expense report--doesn't work at cross-purposes with what's of most value to the systems specialist aggregating those reports into a summary for his or her internal customer, the vice president of sales? How can you be sure that these value vectors' collective force will move the organization in the direction that maximizes the value delivered to your real customers? That is, after all, the point of the exercise, isn't it?

 You can't. Not without some direction. Not without a beacon. Not without a lodestar. So imagine, if you will, a single sheet of paper on which is written a handful of statements--generally five or six--all written in the first person and all with quotation marks around them. Taken together, these capture the essence of what's of true value to your real customers. Let's call these "customer-value statements" and the single sheet of paper a "customer-value guide."

 Suppose your organization manufactured widgets. Perhaps your customer-value guide would consist of the following five customer-value statements:

  "No surprises."

  "Don't forget about me when you're developing new products."

  "My customers are counting on your widgets!"

  "'Right' is better than 'fast,' but late ain't good."

  "When I recommend that we use your widgets, I'm putting my credibility on the line."

 Do these statements replace one's need for more traditional customer feedback and data? No, of course not. However, they do evoke some of the less quantifiable but equally powerful emotions that are part of any business relationship. So when the sales rep engages with the accountant, the conversation will no longer only be about adherence to administrative punctilio. They may actually, jointly, look at the first customer-value statement and ask, "Is there anything about the way we're invoicing our customers that might surprise them?" And when the accountant and systems specialist get together, they might take a look at the fourth customer-value statement and say, "Our customers want it right, and they want it fast. But are we sure we know how they define 'fast'? Or even 'right,' for that matter?"

 Those are different kinds of conversations, and the differences are helpful ones.

Step 6: Conduct internal-customer/supplier exchanges with an eye toward the customer-value guide.

 Yes, your internal-customer/supplier engagements reflect a partnership, as opposed to a vending relationship. Yes, they are closer to conversations than supplications. Yes, they are more likely to identify greater areas of overlap between the internal supplier's expertise and the internal customer's real needs.

 But now an important constraint can be added before targets are established. The following question must be asked and answered explicitly: Which customer-value statement (or statements) will this action positively address, and how?

 In other words, the goal is no longer to create value for your internal customer. It's to ensure the maximum value for your real customers by working more effectively and collaboratively through your internal customers. The customer-value guide provides the missing element, that focal point or lodestar.

Step 7: Involve the entire organization in creating the customer-value guide.

 It's customary to think that only certain jobs (e.g., sales, marketing or customer service) have direct contact with customers. But why should that be? In fact, to the extent that this is true, might it not hamper the goal of delivering the maximum value to those real customers? Doesn't it have the effect of blurring the writing on your customer-value guide?

 And insofar as customer-contact people are considered the only sources of customer insight, that insight will be limited and skewed. Customer-contact people can only see the world like customer-contact people see it. That's a tautology, not an insult. The very act of getting new pairs of eyes (e.g., people from human resources, accounting or administration) in front of customers will give you a richer, deeper vein of information from which to mine your customer-value guide.

 By including people from all areas of the organization when you create the customer-value guide, you'll in effect be stationing a cadre of customer-value advocates throughout the organization. You'll be bringing the customer closer to the organization. And you'll be spreading truth and deep customer insight more fully throughout the organization.

Step 8: Turn the organization broadside to the customer.

  Actually, this happens more or less automatically as a result of carrying out the preceding seven steps. It will still be No. 1's job to serve No. 2 on a day-in, day-out basis, as illustrated below. It will still be No. 2's job to serve No. 3 on a day-in, day-out basis. And it will still be No. 3's job to serve No. 4 on a day-in, day-out basis, as illustrated below. But now, all of that work will be informed by a deeper, richer understanding of why it is being performed in the first place. All of that work will be performed with a clearer understanding of the difference between ends and means to ends.

Step 9: Make the customer come alive for all employees.

 If the goal is to create maximum value for your real customers--and you want to remind people that, in serving their internal customers, they are merely engaging in a means to that end--then it doesn't hurt to give people living, breathing examples of the embodiment of that end. Find ways to get customers in front of your people at your place of business. Find ways to get your people in front of customers at theirs. Ideally, this should be done in person or, failing that, perhaps on videotape or audiotape. Make a little less room in your company newsletter for fondue recipes and bowling scores, and a little more room for stories about your customers--who they are, how they use your products and how your products deliver value to them. The goal here is saturation, not precision. That being the case, it's hard to go wrong.

Step 10: Treat the customer-value guide as a living document.

 Because your customers' worlds change so rapidly, what represents real value to them will change rapidly, too. Consequently, your customer-value guide's effectiveness will always erode over time. You must keep current by constantly revisiting it. Don't think of this as a burden but rather an opportunity to get more of your people more directly connected to your customers. Every time you revisit your customer-value guide, be sure that new people (i.e., those new to creating a customer-value guide) are involved. Make sure all levels and corners of the organization are represented. Remember, the customer-value guide is your lodestar. It's that beacon from which people will take their bearings before making decisions or taking action. That's an important and powerful role. But it can be dangerously misguiding if not kept up-to-date.

A preposition proposition

 The internal-customer model has been one of the most important insights behind the entire quality movement. We owe it much. In fact, its very success is what's behind the need to rethink it. In a world of relative advantage, when one organization thinks in terms of internal customers, it knows a secret that its competitors don't. But, alas, the internal-customer concept is no longer a secret. Everybody knows it. And everybody who aspires to be around for a while applies it.

 Providing value for your internal customer is a noble idea, but it's no longer enough. Still in its original incarnation, it's taken us about as far as it can. In fact, to the extent that you view internal customers in the traditional way, you'll be blocked. The way to break through that blockage involves a simple preposition--a preposition proposition, if you will: Don't try to create value for your internal customer; try to create value through them. Let that be your new little secret. Let that provide you with the edge.

About the author

 John Guaspari is founder of Guaspari Associates, a Walpole, Massachusetts-based management consulting firm. His newest book is The Value Effect: A Murder Mystery about the Compulsive Pursuit of 'The Next Big Thing' (Berrett-Koehler, 2000). Visit his Web site at www.guaspariassociates.com or contact him at jguaspari@qualitydigest.com .