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The “pat yourself on the back” issue of knowing when you have done a good job was addressed last month. Now, let’s extend the good job to the whole business.

What is it the company must do to pat itself on the back? It’s a simple question, and in fact has an extremely simple answer. Ask your customers.

This is one of the steps in “the balanced scorecard,” a management tool that’s been around since the mid-1990s. It was introduced by Robert Kaplan, a professor of accounting in the business school at Harvard University.

The balanced scorecard takes an approach to business management that is represented by the diagram in Figure 1.

Figure 1. The balanced scorecard

This approach most often is taught starting from the “Financial” perspective. I want us to explore it from a different starting point, the “Customer.” I think once we know what is important to the customer, we can design internal excellence.

So let’s embark on an exercise from your parts and service personnel. Every time one of your employees talks to a customer, they should ask the question, “What is it that you expect from any of your suppliers?” And have them write the answers down.

Collect the answers at the end of the day and summarize them into a similar answer. After a few weeks you’ll have quite a list. At this point, pick out what you think are the “most important.” Then turn the questions around and ask the customers during the next few weeks to rank the top three out of this list.

Now you have your answers. This is what your customers have told you are the most important things from their perspective.

How do you do in satisfying those items? This is where we now bring into play the skills of your employees and the processes you use to assist them in satisfying their customers. What are the processes you must excel at to satisfy your customers’ needs and wants? This becomes quite clear, doesn’t it?

Once you know what excellence is required, you can answer more detailed questions. What technologies and tools and training are required in order to achieve this internal excellence? This is where innovation comes in.

Figure 2. Determining internal excellence

This looks like the beginning of a plan, doesn’t it? Ask your customers what is important to them, determine what you need to excel at to satisfy those needs, and then fill in the missing pieces in technology, tools, and training that will assist your employees in reaching internal excellence to satisfy their customers. Quite simple, really. Oh, and one more thing. If you do these three things, the fourth piece of the balanced scorecard—“Financial”—tends to be able to look after itself.

Let’s take a look at the four steps shown in Figure 2. Again, we start from the customer needs and wants that determine internal excellence. From that, applying innovation delivers the goods. This will allow the parts and service groups to determine their operating strategy.

But this is where business in America starts to have trouble. Management has trouble implementing strategy. This seems quite improbable, but it’s true. The statistic most often quoted is 20%. Less than 20% of American businesses succeed at implementing their strategy.

What is the problem? This is what management is paid to do. Management is a complicated discipline, but one that is critical to the success or failure of business in general. Why is it that management fails so often at implementing their strategy?Well, that has actually been studied too, and the most compelling reason is that less than 5% of the employees in a company understand their company’s strategy.

So let’s return to the balanced scorecard. Each employee who communicates with customers is involved in asking questions about the needs and wants of their customers. These employees are involved in determining where internal excellence is critical. They are likewise involved in determining how internal excellence will be achieved and in determining what systems, tooling, and training are required to do the job.

In fact, employees are designing their own strategy with the assistance of management. This is not a top-down-driven strategy, but rather a customer-driven, employee-designed strategy. So is there any doubt about your employees understanding the strategy? I don’t think so.

So let’s get started. Sit down with your employees and go over the program. You want them to ask their customers what it is they think is critical from a “best-in-class” firm. Then have everyone involved in doing the work sit together and determine how they can achieve excellence in those critical processes, methods, and procedures.

It’s quite a “fun” process. It allows everyone to be involved in determining the how and what of their jobs. Remember, employees are driven to work harder to satisfy their customers than they are to satisfy their bosses. It’s human nature and a fact that we discussed here last month. I urge to you try it. It works.

Isn’t it time you started to reach beyond where you are now and try to achieve what is possible? Don’t forget that being “good” or “great” is the enemy to achieving the excellence that is possible. That is what your customers want from you—excellence.

Are you ready for excellence? Your employees and your customers are waiting for your answer.