A business must listen and respond to a multitude of different voices. In this article, we will discuss the voice of the business, or VOB, what it means, how to gather it, how it will benefit your organization, and how it can be used to balance the other voices you must listen to.
Overview: What is the voice of the business, or VOB?
In any organization, there are a number of voices that provide guidance to help you manage your business. You have:
- The voice of the customer (VOC), which expresses the needs, wants, and expectations that your customer has for your business.
- The voice of the process (VOP) details how well your process is doing in meeting specifications, targets, or goals.
- The voice of the employee (VOE) expresses the needs, wants, and expectations of the people who work for your organization.
- Finally, you have the voice of the business, or VOB, which defines the needs, wants, and expectations of the business owners, stockholders, stakeholders, and others who concern themselves with the long-term success and viability of your organization.
The problem is that there must be balance between all the voices since they will often be in conflict. Your VOC may want a perfect, high-quality product. Your VOP tells you you are not capable of delivering that. Your VOE says that you need to pay them more for those skills. Your VOB says that without a profit, you might go out of business.
VOB needs and expectations are usually derived from your organization’s financial data. Your stockholder needs might be expressed as dividend growth, P/E ratio, or an increase in the stock price. Your senior leadership might be concerned with profits, market share, direct and indirect costs, and return on invested capital. Beyond just financial data, your VOB might want to know about your company’s NPS (net promoter score), customer ratings, and feedback from your employees.
Once your high-level, macro VOB is understood, you will want to drill down to the underlying processes that support your desired outcomes. That will often be the source of any process improvement activities and team efforts. At some point, it will be important for you and your organization to overlap your VOB with your VOC, because there will be an intersection where they will likely conflict. It is at that point where senior leadership must make a decision on how to balance the two conflicting voices.
3 benefits of voice of the business
It is critical for your organization to gather, interpret, and properly respond to what you hear from your VOB. By doing so, you will increase the probability of your organization’s future success.
By thoroughly gathering and analyzing your VOB, you will gain insight into what the relevant and interested entities expect of your organization. If you don’t have that insight, how can you adjust and adapt to be successful?
2. Common language
If everyone is focused on the same issues and have clearly defined them, then everyone in the organization will be aligned and can work in unison rather than at cross purposes.
There will be conflicts between your VOB, VOC, VOE, and VOP. One benefit of knowing the specifics of your VOB is that you’ll be better able to achieve balance between the varied groups.
Why is the VOB important to understand?
If you can’t measure it, you can’t understand it. If you can’t understand it, you can’t fix it. That’s why you need to clearly define and understand your VOB.
Make better data-driven decisions
You can’t rely on a subjective definition of your VOB. It’s important for your VOB to be objectively and quantitatively defined so everyone has the same understanding of what your VOB means.
Orient your process
Once your VOB is fully understood, you can then link it to the specific underlying processes you’ll need to improve to allow you to meet the needs, wants, and expectations of your VOB.
Link your efforts
Not only is it important to understand your VOB, you also need to have the same level of understanding of your VOC, VOE, and VOP. You will want to look for overlaps and conflicts and eliminate or mitigate them — otherwise, you may jeopardize the future well-being of your organization.
An industry example of VOB
A medium-sized retail company was focused on the voice of their customer. Through a series of surveys and interviews, they gathered information from their customers and felt that they had a good understanding of what the customer wants, needs, and expectations were. They kicked off a high-intensity customer effort and focused all their energies on meeting that VOC.
Three months later, their CFO reported that profits were down, costs were up, product returns were up, and labor overtime was up. It was not a well-received quarterly report. One senior leader, Mike, who had received some Lean Six Sigma training at a former employer, raised the issue of possible conflicts between the VOC and the VOB. It was not a surprise that the CEO and the rest of the senior leadership had never heard of the concept of VOB.
The CEO charged Mike with the responsibility of developing and executing a plan for capturing the VOB. Once completed, Mike reported back that there were major conflicts with the priorities for the customer and the priorities of the business ownership. Additionally, there appeared to be some capability problems (VOB) to even meeting the VOC needs.
With this new insight, the CEO developed and executed a plan to gather and listen to all of the voices and bring balance between them.
3 best practices when thinking about VOB
It’s difficult to gather, analyze, and interpret all the business voices including your VOB. Here are a few tips that might help.
1. Go beyond the obvious
The traditional financial metrics are the ones that you would initially gravitate towards. That’s fine, but look beyond those to other metrics that might be customer-focused, employee-focused, and process-focused that should also be part of what you listen to.
2. Be quantitative not qualitative
There is considerably less confusion when people talk in terms of numbers and dollars compared to feelings and emotions. Define your VOB in terms of financial or measurable characteristics rather than “I think” or “I feel.”
3. Don’t assume
Don’t rely on assumptions or hearsay. Gather as much data as you can firsthand. Also consider doing some MSA to gain confidence that you can trust your data.
Frequently Asked Questions (FAQ) about the voice of the business
1. Where does the voice of the business come from?
The primary source for your VOB will be your financial data, along with other internal quantitative data. You can get your first pass at your VOB by talking to your stockholders, senior leaders, and others who have an expectation for your business as a whole.
2. How do I collect my VOB?
An analysis of your business financial statements will be a good start. You can also get some ideas from your organization’s strategic plan. Brainstorming and surveys are also a good source of discovering what people want, need, and expect of your business.
3. Is there a relationship between VOB and VOC?
Most definitely. Your VOC is what your customer needs and wants. Your VOB is what your business ownership and leadership want and need. Your VOP, or voice of the process, is what our business is capable of producing or delivering. All three are related and often in conflict.
Once again, what’s the voice of the business (VOB)?
Your voice of the business (VOB) are the wants, needs, and expectations people have of your organization. They are primarily focused on quantitative metrics. Data is defined, gathered, and analyzed to help ascertain what the business needs to focus on to be successful.
However, there are other voices that a business must listen to. You must respond to your VOB and, at the same time, balance the needs of your business with that of your customers, your employees, and the capabilities of your business processes.
Jack Welch, former CEO of General Electric, summed it up beautifully (notes in parentheses are the author’s) in this passage:
Too often we measure everything and understand nothing. The three most important things you need to measure in a business are customer satisfaction (VOC), employee satisfaction (VOE), and cash flow (VOB). If you’re growing customer satisfaction, your global market share is sure to grow, too. Employee satisfaction gets you productivity, quality, pride, and creativity. And cash flow is the pulse — the key vital sign of a company.