Over the past several months, I’ve been engaged in several activities, projects and programs focused on performance improvement.  And, as it has been for the past 10 years, I’ve found application for Affordability and its components.  Below are examples of four areas of application;

Architecture:  Over the past several weeks, I’ve been engaged with a major worldwide Architectural firm.  As their marketplace paradigm continues to shift across the world, they have discovered that a new direction and dimension is required.  Customer Focus, Value Delivery and Cost Reduction (impacting expense and price) are three critical components for transformation, as well as creativity, innovation and new methods for achieving wins.

Healthcare:  Throughout the past several months, I’ve been involved with several hospital systems who are experiencing change and pursuing performance excellence.  In every case, Affordability is involved.  Although each example is in a different phase of maturity regarding their approach, each has communicated an initiative that could benefit from the implementation of Affordability.

HVAC Products – Trane:  Recently, I have had a to experience, first hand, an organization that does NOT have Customer Focus, does NOT know Value Delivery, and does NOT understand Cost Reduction (in terms of expense to deliver value).  During 2014, Trane manufactured air conditioners with a compressor that contained fluids that, over time, ‘gum up’ and immobilize an exchange valve in the system.  I had one of those units installed in the summer of 2014.  Although they put out a service bulletin informing their customers of the condition, they didn’t provide the ‘fix’ to their distributors and installers until after the condition appeared.  Since they knew the date range and serial numbers effected, they could have proactively issued the resolution and avoided customer dissatisfaction, time and impact.  However, from an internal cost management perspective, they decided to hold on to the root cause fix until the condition appeared.  Result:  Customer Dissatisfaction, Poor Value Delivery on their motto: “It’s hard to stop a Trane”, reactive as opposed to proactive Cost effectiveness (Note: this may cost them customer loyalty … and they may lose business to one of their competitors: Rheem).

Investment House – Merrill Lynch:  Many years ago, 2010 to be exact, Merrill Lynch discontinued their HSA accounts as an outcome and response to the Affordable Care Act (2009).  As they requested, I filled out the appropriate paperwork for them to close my account and send me a check for the balance remaining.  Every month that that moment in 2010 until this month (June 2016), they sent out an account status notification.  This occurred somewhere around 70 times.  During that period, I tried several times to get them to close the account and send me a check for the balance.  Two day ago (June 7, 2016), a representative for Merrill Lynch called me regarding the account.  I went through with him the history, and customer requirements I had since 2010.  He transferred me to another representative, and I repeated to her the same history and requirements.  she requested I fill out paperwork to have the check approved and submitted … I responded I have already done this over the past several years.  She was able to locate the original paperwork from 2010, and told me she would check to see if it’s still valid and call me tomorrow (‘tomorrow’ being 6/8/16).  She called me on 6/8/16, as she promised, gave me the good news that the paperwork was valid, and promised to send me a check for the balance … stay tuned for the outcome!  Lesson:  When an organization is out of touch with the Customer Requirements, Value Delivery and Cost Control, it supports a lot of waste and inefficiency.  It likely cost them more to maintain my account since 2010, than the amount of the check they’re sending me for the remaining balance.  Result:  Customer Dissatisfaction, Value Delivery Failure, Cost Controls out of Control.

Paul