Monthly Archives: March 2011

Systems Thinking Concepts

Reflections on the International Deming Conference

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Having just participated in the International Deming Conference . . . I thought I would take a few days to reflect on the keynotes and sessions I attended.  It was a fast two days so unpacking my thoughts was necessary.  There was some good and some bad as in any conference especially with representation internationally.

I found myself disappointed in 2 of the 3 keynotes.  Dr  Vladimir Kvint is a well-traveled Russian that name dropped a number of famous US and Russian names that he had interacted with over the years.  A number of things were alarming to me, but this quote from his paper and slides was especially egregious:

“A fundamental idea of communism and a staple of all command economies is the equality of wages, salaries, and other forms of compensation regardless of a worker’s output.

This practice removes effective incentives for worker efficiency, innovation or leadership, and often even integrity.

When motivation is removed from the process of production, the result is low-quality labor goods, services, and subsequently, a much lower quality of life”

Pinch me, am I really at the Deming conference? Did I walk into the wrong room?  No, I can see Dr. Joyce Orsini and Dr. William Latzko in the room.  I sat wondering if they would let this go on.  Makes me wonder what Dr. Deming would have said.  Incentives are form of motivation, yes . . . the wrong kind.

An absolutely great keynote the next morning from Robert Browne from the Great Plains Coca-Cola bottling company.  He was fantastic.  Two wonderful quotes:

“The hardest part of change is changing your mind.”

“Changing culture is harder.  I can explain it to you, but I can’t understand it for you.”

I had moments where I thought I was talking to W. Edwards deming listening to Bob Browne.  He spoke about getting rid of all the accountants that were focused on costs and how much money that saved him.  It took Mr. Browne years to refine his improvement method, something that the 95 Method can speed up for service organizations.

As brilliant as Mr. Browne was, I was frustrated with Dr. Thomas Kelly.  Never heard of him, but he came armed with a speech on solutions.  He had all the answers, but no knowledge.  He was challenged on his opinionated solutions and his response boiled down to bold and courageous moves require some controversy.  I kept asking myself, “By what method?”

I was shocked at some of the wrong thinking that continued into the first day.  ISO and technology presentations that were certainly not Deming.  But more alarming, the papers provided zero evidence that their thinking even works.  Dr. Latzko saved that day from keeping the first day a complete wash.

The second day came with more speakers that actually understood Dr. Deming’s teachings.  Jam Myszewski was difficult to follow (english was not his first language), but had some good information from his research.  Unfortunately, I missed Gordon Hall’s Theory of Knowledge presentation.

My presentation was very different than all others.  I went through the model for “check” and talked about recent engagements by 95 and myself.  Anyone interested in this presentation can email me for a PDF of the paper, those that have read it describe it as a good summary of the 95 Method.

That is my thoughts about this conference.  No “lean” presentations or practitioners which I found strange.  There would have been no Toyota, Taiichi Ohno or “lean” without Dr. Deming.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Outsourcing, Systems Thinking and Contact Centers

Are Contact Centers Still Factories?

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Marshall's flax-mill, Holbeck, Leeds, interior...

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Are contact centers still factories from the industrial revolution?  In a word . . . yes.  OK, the monitoring of bathroom breaks and heavy-handedness may be over, but that doesn’t mean that the work itself has improved.

Contact center management still monitors calls, hoping to inspect quality into a call.  They still use outdated measures like Average Handle Time (AHT) and still give incentives to employees believing this is a way to improve performance.  Oh, and instead of beating employees up, they take them to the “couch” and give them them therapy.  This is so . . . yesterday.

Yet, when I walk into contact centers I see the tell tale signs of old thinking.  They come in many forms like those displays that tell you how many and flash colors when the queue is to large.  Yes, let’s hurry up off the current call to get to the next one, so that the customer you just rushed off the phone will have to call back (failure demand) or quit using your company forever.

The monitoring of calls for quality purposes is probably the most pathetic.  Did you smile and sound cheery for the customer.  This seems to be of more importance to management then actually being able to deal with a customers variety and providing service.

You see our problem with contact centers is design and they have all been designed with the wrong thinking.  Many were set up to save money by dealing with customers using a cheaper medium (phone), routing calls, get management data or the worst of all to save money.  Customers have been forced to use contact centers for these reasons which would be alright if service was actually provided.

More often than not I see contact centers filled with failure demand.  This runs 25 -75% or more of all calls.  It is a measure of quality that any contact center should take inventory.  Measure this and you will spend less time monitoring agents and more time fixing the causes of the failure demand and shutting it off.

I know, you can’t control what demand you get into your contact center.  My point exactly.  You have to realize you are part of a service delivery system and not a stand alone function left over from the industrialized design your company or partners adopted ages ago.  The one where you break up the company into pieces and optimize each piece.  But the pieces don’t fit together very well and this causes sub-optimization and creates waste.  Oh yes, your customers feel it, every day when they look for service and have to navigate your “functions.”

Speaking of functions, let’s not forget the IVR that has too often been over-engineered by some technology company trying to get a few extra revenue dollars.  They still remain my most loathed apparatus in contact centers.  Many were created to get you to the right answer (see failure demand) and others to reduce costs, but no one seems to care about the customer that actually brings profit and revenue.

In the end, if contact centers are to be modern they need a modern design and better thinking, not more technology or couches to perform therapy.  Take a look at the demands your customer places on your organization as a place to begin redesign and remove your companies performance from the industrial revolution into a new modern age of service design.

Join me for the International Deming Conference in New York City on March 21 – 22.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking Concepts

ISO Certified Doesn’t Mean Good or Even Mediocre

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You always hope that when fads present themselves that they live a short life and leave little carnage in their wake, but you can still see organizations that are ISO certified and displaying the banner proudly.  Yes, we are certified ISO company and we continue to have the best documented processes in our industry . . . that create concrete life preservers.

Often you see these companies be more expensive then their competitors and in this case it doesn’t mean a better product or service.  The hoards of people hired to document and audit add to costs.  These costs have to be accounted for somewhere.

Redesign of the work is in order, not documenting a poorly conceived system of processes.  Many point to the benefit of seeing their system and the interactions, but few identify that this design is actually flawed and full of waste and sub-optimization.  In service, only a redesign based on customer demand will help to provision a good outcome.

Workers and managers in the work understanding organizational performance end-to-end from a customer perspective gives them knowledge.  Process improvement does not go far enough, it might give you a percentage or two if your lucky, or create more waste if you are unlucky.  The whole system design with mass-production and Tayloristic thinking is perpetuated and huge improvements are missed.

Real improvements don’t come from standardization and documentation in service.  They come redesigning our thinking about the design and management of work.

Join me for the International Deming Conference in New York City on March 21 – 22.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Shared Services, Systems Thinking and Government, Systems Thinking and Management, Systems Thinking and Technology, Uncategorized

Michael Barone – Frederick Taylor Drives Management Thinking Too

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Frederick Winslow Taylor lived from 1856 to 1915

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Michael Barone, a Fox News Channel contributor, recently wrote an article called Who’s to Blame for Union Woes? This article is somewhat accurate as he points out that unions still operate as if Frederick Taylor thinking still dominates businesses and government.  The problem Michael Barone misses is that Tayloristic thinking still dominates management thinking too!

Manufacturing and service still follow the premise of Frederick Taylor that the functional separation of work is a good thing.  You don’t have to look far for the evidence . . . functionally separated sales, operations, front, offices, middle offices, back offices, etc. sewn together by entrapping technology that seals in the waste.

Management is responsible for the design of the work.  And with management focused on costs by outsourcing, sharing services and reducing unit costs we have lost our competitive position in the US.  The management paradox is that a focus on costs always increases them making us less competitive as other countries create value.  Unions may have embraced yesteryear thinking of Tayloristic thinking, but it is management that continues the outdated design.

Unions were created by management taking advantage of workers.  First for working conditions and later for reducing salaries while executive salaries have sky-rocketed.  This management thinking has created a gap where in order to get more profit in the private sector we have to milk the worker . . . the ones that actually do the work and create value for customers.

Undercover Boss (TV show) provides evidence that executives and management don’t know much about the work and make decisions, plans and projects without knowledge.  Management making decisions without knowledge creates much waste and poor decisions like the banking crisis.  Management with incentives and no knowledge are destined to create poor work designs and decisions.

I do agree with Michael Barone that unions have “clung to an adversarial model,” but that model is perpetuated by management.  If workers mindsets are to change to create a better tomorrow than so does managements.  The bottom-line is that management must change too.  We need to embrace the worker to help to solve tomorrow’s problems, not persist to call them “the problem.”

If union membership is down to 6% as Mr. Barone says, then when they are all gone . . . what will management’s excuse be?

Join me for the International Deming Conference in New York City on March 21 – 22.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Outsourcing, Systems Thinking and Contact Centers, Systems Thinking Concepts

The New Shell Game in Service

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The advent of technology has enabled work to be spread around the world.  Try finding who actually does the work once it reaches an electronic mailbox and you are sure to need to hire a detective.

Service organizations have designed front offices that actually can’t do anything but pass the work to the back office.  And some times either the front office and/or back office are outsourced to a country with cheaper labor.  This is allowed only because we have technology to pass things around the world.

As a customer, I get frustrated with talking to contact centers that have been outsourced and off-shored.  Yes, sometimes I can’t understand the agent, but that isn’t the reason for my ire.  The problem is they can’t help me when I get to them.  They read scripts and are polite, but they can’t help me.

The sad thing is I run into the problem when the agent hasn’t been off-shored.  This has long led me to believe that the design is the problem whether outsourced or not.  Consumers are frustrated with IVRs to navigate, scripts to overcome, and back offices hidden away with the people that can actually help me buy or solve my problem.

Many companies have programs for off-shored companies to teach language skills to their employees.  But no one is addressing the real problem of the design of the work.  The result is predictable demand from customers that are caused by a failure to do something or do something right for a customer (failure demand).  Or worse, the customer never calls back . . . and you can’t measure loss of business.  The reality is that if you have large amounts of failure demand, you have a large loss of potential and existing business – word gets around.

Too many service organizations take the attitude that it is costly to actually answer a phone call with a human that can absorb the variety service customers bring.  And to design work that actually allows a customer to get an answer one-stop would have the organization drowning in red ink.

The management paradox is that nothing could be further from the truth.  Good service always costs less than bad service . . . by a lot!  Designing out failure demand and creating value for customers is what creates profit.  There is no profit without customers.

Service organizations have created a maze for customers to navigate thinking that this is good business.  For customers, it is a shell game from an unscrupulous street vendor determined on hiding the pea.  This is a lose-lose for both service provider and customer.

Join me for the International Deming Conference in New York City on March 21 – 22.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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