The Customer Is Always Right ... and Left ... and Above ... and Below.

Owen Ambur, University of Maryland University College, September 25, 1999

Sometimes a line of reasoning is so drastically wrong that its logic bends back upon itself and points in the right direction. A case in point is the argument made by John Guaspari in his article entitled Customer Means Customer. (Quality Digest, October 1998)

Guaspari bemoans the twisting of the traditional meaning of the term "customer" to apply to those involved in value/supply chains within organizations. And there is much to be said for adhering to a common set of plain-language meanings for the terms we use. Without common understandings we cannot communicate at all. However, implicit in his line of reasoning is the notion that the traditional, hierarchical, bureaucratic organization remains relevant in the cyberage ... an assumption that is becoming less and less true.

The theory of the firm holds that organizations form when the cost of transactions becomes too great without them. Obviously, computers, telecommunications, and particularly the Internet are drastically altering the economics of interactions among individuals and organizations. The ultimate impact upon organizations remains to be seen. However, TQM taught us one thing that will always remain true: If the process is not right, the product cannot be ... except by chance.

Vast power is concentrated in large enterprises, and bureaucracy can be incredibly resistant to change. However, organizations are not ends unto themselves. They exist to serve the needs and wishes of people - individual human beings, regardless of the family groupings to which they belong as well as the social constructs among which they array themselves.

Guaspari says one drawback of "the internal customer model [is that it] fosters unhealthy, dominance/subservience relationships within an organization." He suggests an internal customer focus "can evoke the wrong kind of emotions and breed a sense of second-class citizenship among the internal supplier populations ..."(1) But are we to believe that dominance/subservience is healthy if we fail to attend to each others needs within organizations? Talk about a return to the good (bad) old days of corporate management and socio-organizational philosophy! Obviously, people are human and humans can behave badly within any organizational construct. However, some constructs are better than others in fostering efficiency and effectiveness.

Joint ventures, partnerships, outsourcing, and "mass customization" are viewed as driving forces for organizations to remain viable in the intensely competitive regime of the ever-emerging reality. Taken to extreme, such forces lead to supply/value chains in which each person is indeed both a customer as well as a supplier in myriad, equal-value exchanges with those on either side of him/her in the chain. And most people are involved in myriad value chains both within and without the enterprises that employ them.

Guaspari says, "In theory, the internal customer model causes people to treat their co-workers with the reverence properly attached to customers." However, "reverence" is an emotion properly reserved for the supreme being, to whom we can never hope to provide adequate recompense. Among mere mortals, the more appropriate objective is the respect that comes only from value "freely" and, in terms of commercial transactions, equally exchanged.

Guaspari mistakenly suggests, "The principal argument for using the internal customer model emphasizes that only a small percentage of an organization's people come into contact with external customers." However, the principal justification for using the internal customer model is poor service within myriad supply chains - regardless of where the boundaries are drawn between each value-additive process and/or bureaucracy that supports it.

The unfortunate reality is that many people in bureaucratic organizations feel no compulsion or particular need to be responsive to anyone other than their immediate "superior," i.e., the person to whom they are "subservient". In large measure, that is a natural and even necessary reaction to information overload and the lack of better means to establish priorities for individuals within organizations. Many people are perfectly comfortable within such a regime. Indeed, they are threatened by the thought of anything else.

Ultimately, though, it is the individual him/herself who is in the best position to determine his/her own priorities. The organization's reward structure should be designed to encourage individuals to choose the "right" priorities, and the rewards themselves should be allocated by the folks who are next-in-line in each of the myriad supply chains. In the past, the complexity and cost of such a reward structure were prohibitive, but as always, technology is the enabler of new and greater efficiency and effectiveness.

Guaspari says: "All people in all functions have an impact on real customers. Is it more difficult to know what the impact is for some functions than for others? Absolutely. But that's an argument for clarifying those lines of connection, not for blurring them." Indeed! And that is exactly what the internal customer focus is all about - clarifying lines of connection among each person in the value chain.

As noted, organizations form because the cost of necessary transactions become too great without them.(2) In other words, processes become too complex to be carried out by and among individuals without the benefit of organizational constructs that hide such complexities from the individuals involved. Indeed, many processes have become too complex even for large, multinational firms to handle alone, necessitating joint ventures, partnerships, and other institutional relationships of varying depth and duration.

Guaspari notes: "Breakthrough improvement says, 'All bets are off. It's not a matter of getting better at the way we currently do things. It's a matter of finding new and better ways of doing things.'" Ironically, in critiquing the focus on the interactions among individuals in the "internal customer model," he has highlighted the opportunity and need to reengineer our view of the role of organizations.

Guaspari suggests: "... the mind-set that begets continuous improvement is precisely the mind-set that prevents breakthroughs from occurring." By that, would he have us believe that we should pursue improvement only part-time and/or sporadically? More importantly, would he expect us to fail to recognize, as he has, that by acting as apologists for outmoded organizational models we would belie the very customer focus that he purports to support?

In the final analysis, each and every person is both a customer as well as a supplier in an increasingly complex web of interactions. No restrictive bureaucratic model nor definition of the roles of individuals within organizations can change that fact. Our efforts are best directed toward altering organizational artifacts to reflect the realities of interactions among people. While we may have great respect for mortal analysts like Guaspari, we reserve for the supreme being the reverence associated with the power to redirect the natural course of human events.

_____________________________

1. Regardless of whether they are internal or external to a particular organization, suppliers are not "populations"; they are individual persons.

2. Organizations fail when the cost of supporting them exceeds the benefits they provide. In the private sector, the benefits are normally determined directly in economic terms. In the public sector, the benefits are often indirectly determined in terms of the potential to contribute to the reelection of the power elite.