Monthly Archives: June 2009

Systems Thinking Concepts

What Does the Future Hold?

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A crystal ball would be nice to be able to see the future.  I don’t have one.  Not sure that I would want one anyway, seems kind of boring.  There is excitement in not knowing.

John Chambers from Cisco said command and control management will be dead in 5 -10 years. I have to agree with him.  The command and control world has dominated thinking for 100 years.  Scientific management theory was proved outdated by the likes of Deming and Ackoff. Systems thinking will prevail.  So what are the characteristics of a systems thinking organization?

  • Organizations will learn to optimize their systems or fail against those that do. The functional separation of work has created sub-optimization and waste beyond tolerance levels of customers.

 

  • Decision making will be put back with the work instead of separated from it as AP Sloan did at GM in the 1930s. The worker will become important again because they have the best knowledge to innovate and improve the work.

 

  • Organizations will serve the greater good rather than maximizing profits for themselves. Customers, vendors and even competitors will work to make the customer experience better. Contracts will take a back seat to doing what matters for customers. Cooperative attitudes will prevail as competition takes a back seat to making the pie bigger by expanding opportunities.

 

  • Intrinsic motivation will rule over extrinsic motivation. Targets and incentives will become extinct as organizations understand they bring waste. Without the functional separation of work there becomes only one objective . . . to serve the customer.  Organizations lose the need to optimize each function as it sub-optimizes the whole increasing costs and degrading service.

 

 

  • Technology will be pulled to enhance the work and not pushed as a solution as organizations find the return on technology is only as great as its need for it. Technology companies will understand that just selling technology is only good if it helps the customer and keeps them in business, not if they hit their monthly target or quarterly dividend and kill the patient.

Most of these items have been described and played out by the likes of Deming, Ohno, Herzburg and McGregor.  My interpretation of them and what the future may hold.  The organizations that don’t understand these at a minimum risk losing business or their organization.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Outsourcing, Systems Thinking and Contact Centers, Systems Thinking Concepts

Outsourcing Call Centers

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There are many reasons I don’t like the idea of calls centers being outsourced, so let’s outline the reasons why.

  1. Branding.  Customers see your organization through who they come in contact with and organizations reducing costs fail to realize that can have a big effect.  Dell is probably the best recent example, the outsourcing has cost their brand dearly.  As a former Dell customer I was always frustrated with dealing with customer service.
  2. Outsourcing Waste.  Probably my largest objection and originally pointed out to me by my 95 partners (UK).  Call centers have a large percentage of failure demand 25% to 75% of all calls.  These are calls that are problems, call backs from incomplete answers, follow-ups, missed appointments, etc.  If we eliminated this type of demand we would have fewer calls and happier customers.  Companies need to eliminate this failure demand before outsourcing call centers.  Otherwise we lock in the cost of the waste.
  3. Costs are not in transactions, they are in the flow.  Most people see transaction costs go down with outsourcing . . . true.  What they fail to see is not only the failure demand they are outsourcing are costly, but that the customer sees service end-to-end and not by function.  Too often already bad flow (end-to-end or systemic flow) is outsourced increasing the number of transactions at great cost.  You see cost savings are not gained through economies of scale, but through economies of flow.
  4. Failure to see that SLAs, inspection and monitoring are costs that rise in outsourcing.  Outsourcing contracts become full of SLAs that have little or no relation to the customer experience, as vendors seek measures that they can “control.”  These metrics are never representative of the end-to-end metrics customers seek.  SLAs are by function not the end-to-end as they become too difficult for the outsourcing vendor.  Someone can very well be hitting the SLA for their outsourced call center while overall costs increase and customer service deteriorates.  Inspection and monitoring increases as the service deteriorates and costs continue to escalate.
     
  5. Even non-core competencies are part of your system.  An argument I hear often is that call centers are not part of the companies core competency.  Other than the branding argument, being a specialist in a function can be a big disaster.  We live the belief that optimizing a piece optimizes the whole . . . it does not.  It is how all the components of the system work together is where cost savings come from.  The optimization of one piece usually leads to sub-optimization of other parts of the system.  Example, I can reduce handle time by not getting all the information needed to transact business causing chaos in the rest of the system with errors and more calls.
  6. Loss of innovation and feedback loops.  Innovation leadership comes from the ability to leverage all parts of the system to optimize the whole.  The front-line worker (call center) has the best ears to hear opportunities to improve service and/or product.  Tied down with SLAs, scripts, monitoring, etc. inhibits the front-line as their purpose becomes to meet the target and not the customer needs.  Feedback that helps optimize the system are usually targeted to optimize the function and systemic feedback is lost.

I urge any organization that is considering outsourcing to look first at their own system and understand the what and why of current performance before outsourcing.  If you have already outsourced or you are an outsourcing vendor I urge you to find ways to work together to optimize the system.  This will require new thinking in your outsourcing strategy for call centers.  We often find in working with call center management ways to optimize the system before outsourcing through business improvement . . . and for outsourcing vendors there are better ways to partner.  There is much at stake because if the outsourcer dies the outsourcing company stands to die with it.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Government, Systems Thinking Concepts

Improving Government in the US

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The application of systems thinking in government is being well-documented by my 95 partners and you can witness the improvements yourself by going to www.thesystemsthinkingreview.co.uk.  This is a great resource for local, city, state and federal government.  The debate wages on how big or small government should be, but whatever side you stand on, services still have to be provisioned. And it is in our best interest to provision them with the least amount of cost and improved service.  I have established in previous posts that there is no trade off between good service and costs.  If you improve service costs will go down . . . this is a government management paradox (read: The Zero-Sum Game:A Loser’s Mentality).

The problems with services provisioned by the government are many.  Too much focus on reducing costs, that in another paradox only increases them because we manage by visible costs alone, but it is the invisible costs that can’t be seen (the ones in the flow).  The types of wastes outlined in Systems Thinking in the Public Sector hold true for the US Government:

  1. The costs of people spending time writing specifications.
  2. The costs of inspection.
  3. The costs of preparing for inspections.
  4. The costs of the inspections being wrong.
  5. The costs of demoralization

The functional separation of work conceived by FW Taylor 100 years ago still drives thinking in both the private and public sector.  This thinking along with technology leads to such foolishness as outsourcing that increase costs in the pursuit of transaction cost reduction.  This productivity mindset fails to look at the end-to-end costs (or total costs) by lowering the cost of a function or transaction leading to avoiding opportunities to reduce total demand (because most of it is unwanted or failure demand).  Outsourcing is not possible with technology, so we both outsource waste and lock it in with technology.

Shared services fares no better, the idea is to achieve economies of scale and reduce transaction costs.  The problem is that costs are reduced by economies of flow (not scale).  We typically get the double-whammy of shared services and outsourcing where we are allowing our government to contract out our waste and add to it in many cases.  Most of the waste in shared services is because government management has separated the work into front office-back office or skilled – simple (functional or transactional).  A better way is to design against demand where the variety produced by service can be absorbed.

Another waste is targets set in government.  Targets become the defacto purpose of government agencies, creating measures that sub-optimize by focusing on compliance and provide poor service by restricting method.  The purpose should be to provision services against customer demand, finding measures that matter to understanding and improving the work, and liberating method.  This liberation of method achieves government innovation by allowing government managers to be responsible and choose what to do free from compliance.

The conversation will continue, and we will need to try new methods to improve the way the US Government provisions services.  Otherwise, new ways are restricted and costs increase in an over-burdened system.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Contact Centers, Systems Thinking Concepts

Call Center Management: Two Ways of Thinking

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There are a couple of different ways of thinking with regards to call center management . . . command and control thinking and systems thinking.  Both types of thinking require us to plan for resources using call volumes and duration.  The similarities pretty much end there.

The command and control thinker uses these same data (call volumes and duration) to improve productivity.  Such measures as (average handle time), cost/contact, customer satisfaction, agent utilization and of course you must have a balanced scorecard (a pretty version of MBO).  Command and control thinkers also focus on the individual with coaching, performance appraisals, inspections, monitoring, targets and incentives . . . and the worker only is worried about not getting paid attention to by his manager/supervisor.  All of these things are waste and with all the time organizations spend putting into it, I wonder what could really be done to improve things.

Systems thinking focuses on the customer and more importantly the customer purpose and measures from their perspective.  They understand that the focus is the system, not the individual.  That performance of an organization is 95% determined by the system they work end and only 5% is attributable to the individual.  They also understand that call center management’s job is to manage this system and leave decision-making about the work with the work instead of some report.  They understand that failure demand (unwanted calls, problems, follow-ups, missed appointments, etc.) make up between 25% and 75% of all calls in a call center.  They understand that the call center is part of a broader system and not a part to be outsourced to reduce transaction costs or share services to cut costs without first studying customer demand and eliminating waste BEFORE such ventures.  They understand that targets and incentives become the defacto purpose of the worker and the real purpose is tied to serving the customer.

The two types of thinking are almost opposites.  Command and control fails to deliver sustainable results, while systems thinking can provide business improvement that organizations only thought were possible for manufacturing companies in Japan.  Are you ready to change thinking?
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.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” or sign up for his newsletter and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking Concepts

How Do We Become a Systems Thinking Organization?

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A natural question for the curious is “how to do something.”  What are the steps to becoming a systems thinking organization?  The answer I will leave you in this blog will be somewhat of a paradox consistent with the discipline itself.  First of all, you can’t copy another organization, each organization is unique and part of systems thinking is understanding that copying  can lead to more problems.  And it was Dr. W. Edwards Deming that said that it is difficult for an  organization to see itself.  So combining theory and knowledge the 95 Method takes organizations through a learning model that requires an unlearning and relearning method to change thinking.  We believe that this is best done with the work so one can see the waste and inefficiency in your organization.

Someone might say that this is awfully convenient to have to hire a consultant to do it right.  So, we offer much in the way of self-guided learning, as we also believe that an organization must change willingly.  We do not use coercive or rational methods to learn.  This is long-term counterproductive.  Here are some recommendations to becoming a systems thinking organization. 

  1. You must be curious.  If you are trying to rationalize systems thinking against other disciplines like lean six sigma you are off on the wrong foot.  As a “reformed” lean six sigma master black belt, I can tell you this journey will be like nothing you have gone through before.
  2. Read the books.  Systems Thinking in the Public Sector for government and Freedom from Command and Control for the public sector.  These will help in understanding what is involved with practical examples.
  3. Read the Fit for the Future series.  This is a series of six management articles to help an individual understand systems thinking and takes you through (step-by-step) some of the general elements.
  4. Download and read Understanding Your Organization as a System.  This is for the diehard lots of information on how to look at an organization and more importantly it is a free resource.
  5. Other downloads.  There are other downloads currently available from Rain University.  Using Measures for Performance Improvement, Transforming Call Center Operations, Process Mapping and Analysis, and Managing by Walking Around are all available for purchase.

So no matter what, there are plenty of resources to help you improve your change management methods.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Contact Centers, Systems Thinking and Measures

Call Center KPIs, Metrics and Measures

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I have been reading about call center KPIs, metrics and measures for several weeks now and I still walk away shaking my head.  Most service organizations are working on the wrong measure and worse working on the wrong problem.  Some of the metrics may be useful to know how to resource, but none hit the real problem in making things better.  For the command and control thinker these metrics are a dream as they can analyze themselves into oblivion . . . and usually do.

We have all types of metrics. Like:

  • Cost/Contact
  • Cost/Minute of Handle Time
  • Call Quality
  • Agent Occupancy
  • Training Hours
  • Absenteeism
  • Average Speed of Answer (ASA)
  • Call Abandonment Rate
  • IVR Completion Rate
  • Average Hold Time
  • % answered within 30 seconds
  • Average Handle Time
  • Talk Time
  • After Call Work Time

Most of this measurement tracking is a waste of time and resources.  The customer could care less about these metrics and the only one that matters to them is did you solve their issue.  I am always amazed that call centers spend so much time tracking data (and mostly unimportant data at that) and so little time improving the system they work in.  The response is usually, “but we can only be responsible for our call center, not sales or operations that is not our job” or “we can only do our part and hope that everyone else is doing theirs.”  This is the stuff of poor customer service everyone “doing their job” while the customer suffers the end-to-end system.  Command and control thinkers love to collect data, inspect phone calls, and figure costs . . . but no one looks at what the customer demands.  The result is a sub-optimized system that provides no business improvement, higher costs, and a sweat shop culture.  WOW! sign me up . . . I want to work in that environment (sarcasm).

There is a better way.  The systems thinking organization understand that the only metric that matters are those important to the customer (defined from purpose).  Sure the first call resolution (FCR) is useful when applied with knowledge, but the metrics that really matter to the customer are end-to-end from the customer perspective and may cross several functions in their current state.  Very few service organizations understand this.  They pay attention to each function building structures of front office, middle office and back office and then constantly redesigning them into shared services or outsourcing.  All of this activity is done with the aim of saving money and all of these activities typically increase costs . . . a management paradox I have discussed in other blogs.  All the sub-optimization increases costs and waste.

Most call centers still are not tracking one metric that does matter to customers . . . failure demand.  The unwanted demand into the call center that represents 25% – 75% of all calls into any one call center.  Failure demand are calls that are problems, follow-ups and other annoying calls that customers have to make to get served.  Failure demand drives up costs and drives out customers.  Eliminating failure demand increases capacity, reduces costs and makes customers happy.

By understand the relationship between Purpose, Measures and Method.  A systems thinking organization soon learns that the purpose is to serve the customer, we can then derive metrics important to the customer and allow changes to method to accomplish the measures.  No targets here, just continually improvement of service.  Let your competition get buried in the cost of command and control thinking with their benchmarking, KPIs, and metrics/measures that don’t matter.  A systems thinking organization understands this is just waste and sub-optimization and allows them to work on customer problems with a simple change in thinking.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking Concepts

Peter Pan’s Shadow

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People who know me understand how much I love everything Disney.  Disney World andMe and Minnie! Disney movies always take me back to a simpler fantasy world away from the realities of business and life.  I couldn’t wait until my kids were old enough to watch Disney movies mostly so I could watch them with them and relive the fantasy world I so enjoyed as a child.  And to see my children wide-eyed at their first sight of the Magic Kingdom and Mickey.  It is a great experience as an adult even though the highlight for my children now-a-days is who gets to push the elevator button first.

One of my favorite movies is Peter Pan.  The symbolism of Peter and his shadow is the movement from a fantasy world to the world of reality.  Since the great victory the US had in WWII, we have been fortunate as a nation . . . living a fantasy if you will.  With Europe decimated, the world turned to our country for most of its goods and services.  A productivity mindset set the stage for the next 25 years to meet the world’s demand.

W. Edwards Deming rejected in the US went to Japan to start the next generation of thinking moving a country from one of command and control thinking (productivity mindset) to systems thinking (quality and improvement mindset).  The start of the Japanese Industrial Miracle had begun.  By the 70s the US was in a crisis, the auto manufacturers were under attack.  Deming returned from Japan with a new message and new thinking that was watered down into tools . . . if we could just copy what the Japanese did we would be back on top.  The Japanese understanding the change was systemic invited the Americans to their plants to see what they had done and the Americans left with tools.  Later, another group of Americans went to Japan to see what Taiichi Ohno had done in the development of the Toyota Production System (TPS) and called it “lean.”  The lean toolkit would follow and again the need for a change of thinking was missed.  Three opportunities to change thinking and three opportunities missed, if this were baseball we would be “out.”

Business improvement has turned into classes of certifications and tools for lean, six sigma and lean six sigma that does little to change thinking.  The command and control, productivity mindset still prevails today.  I am afraid that even the current crisis will not awaken the US and the deterioration of our ability to compete continues to diminish.  I see it in my networking meetings where people once in manufacturing are now selling homes or work in service industry now.  If we don’t change our thinking, what is left after service?

For the curious, my blogs, management articles and website outline different thinking that must occur to compete internationally.  We are left with a choice we can continue to live in the fantasy world of the command and control, productivity mindset or begin the process of reattaching our shadow (like Peter Pan) and live in a world of reality.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking Concepts

The Wedding

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I went to a wedding over the weekend in West Baden Springs, Indiana.  A historical place discovered by George Rogers Clark for its mineral springs and later served as a hideout for Al Capone.  The wedding was outside in the garden area and was really well choreographed with a string quartet, beautiful bride, handsome groom, reception, dinner and dancing. 

As I sat there during the wedding, I pondered the marriage of a new employee to an organization.  I have seen new employees enter an organization where it takes weeks to orient the newcomer to the organization or come in and have a well choreographed beginning.  Neither necessarily means one organization is more profitable than another, but how well one is treated certainly will have an impact on the “marriage.”

The marriage between employee and organization has become tenuous at best.  Not necessarily because of “hiring the wrong people”, but having a bad system that makes employment mostly unbearable.  Systems based on poor work design, being held accountable for decisions made by managers that don’t understand the work, entrapping technology, targets and incentives that on one hand help you make more money and on the other hand get you paid attention to for poor quality.  These and other system constraints (scripts, policies, standard work, etc.) and conditions prevent an employee to adapt to the system and become a valuable partner in the relationship.

When things go wrong in the marriage and the blame starts flying, divorce is not far off.  No less happens in organizations, a customer is upset, problem occurs, or profit is not achieved and the first thing that happens is the finger-pointing and in an organization the blame always flows down.  It certainly can’t be the one in authority it has to be the one that is perceived as weaker that is to blame.  For organizations, the system is to blame  . . . the things I mentioned earlier (poor work design, technology, scripts, policies, measures, management, etc.).  The performance of any organization is 95% attributable to the system and 5% to the individual.

A better way is to understand the purpose of the work, come up with measures and liberate method.  Managers and workers that have the same purpose (as defined by the customer) don’t have the same systems problems and don’t require rules, policies, inspection, audits and the like that increase costs and strain the relationship.  The measures don’t have to be targets and incentives, because the married couple know what they are trying to accomplish and for who (the customer). Decision-making is put back with the work, because the couple realizes that to serve the customer they have to understand the customer and what matters to them, instead of one of them making decisions off of some report.  Taking these approaches may very well save your marriage by building a foundation that is cost reducing, customer value adding and profitable.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Technology

The IT Scorecard: Hitting the Date

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While doing bank management consulting I learned a lot about IT, as in how not to do it.  The classic and traditional way to measure an IT project is if it met the deadline.  Revenue targets and bonuses were on the line to meet the date.  A well-calculated project plan was always in place to be sure that revenue would be booked timely.  One aggravation was that to meet the schedule improvements were always by-passed.  No one redesigned anything, there was no time.  No time for collaboration, no time for learning the “what and why” of performance . . . the schedule was what determined success or failure.

The problem with that approach was that the fallout was great, lots of bugs and dissatisfaction from customers.  It was always strange how the customer would just negotiate a lower price vs. trying to fix the partnership.  To me it was such a wasteful process that took place for both sides.

There are better approaches to IT.  The better way is to understand the “what and why” of current performance and improve by turning the IT off or treating it as a constraint.  This way a service organization can redesign workflow, roles, measurements, etc and then “pull” technology if it will help the process. 

The new measures are measures not of project completion deadlines, but how well the system (technology, structure, measures, work design procedures, etc.) end-to-end serves the customer.  We have found that serving the customer always lowers costs and improves customer satisfaction.  Most banks serve the IT vendor and their calendar which has always made little sense.  One of several reasons to not like an IT outsourcing strategy.

Banks and other service organizations can no longer afford to blindly spend money on IT that entraps and never reaches an ROI.  With CRM, BI and BPM being tossed about as the new best thing you may want to exercise caution before jumping into the fray.  I rarely find these to be good investments for service organizations.  The movement from the “IT date complete scorecard” to a “customer scorecard” will serve you much better in the long run.  But to achieve this you will need to think differently and discover a better systems thinking way.

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.  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/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking Concepts

Service Paradox: Managing Costs Increases Them

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Not one organization I have been in recently has had any other goal than to decrease costs.  If you work in a call center, the question is, “How do I reduce AHT (Average Handle Time) of a call; “How do I reduce my IT costs?”; “How do I make more profit” . . . the age old questions with a greater sense of urgency.  After all, Moses was given the charge (by the Pharaoh) of creating the same tally of bricks with no straw.  Regardless, this is not a new problem.

What is a problem is how organizations approach corporate cost reduction.  The command and control method is to focus on costs and come up with such original (sarcasm for those that don’t know me) ideas as RIFs (Reductions in Force), shared services, outsourcing, and focus on transaction costs seem to be the most popular methods.  I always find pursuing these is a pipe dream based on bad assumptions . . . the bad assumption, is that these methods are good assumptions.

The management paradox is that being pre-occupied with reducing costs doesn’t allow us to see end-to-end or total costs.  The focus on AHT raises costs as we go to make call times shorter, we give incomplete answers, don’t deal with customers problems which in turn creates more customer calls (failure demand in my world).  Companies then further lock these wastes in with technology, scripts, procedures, targets, standards and compliance.  Never mind all the wasteful inspection, auditing, reporting and general “supervision” of these activities.  Frustrated they turn to outsourcing and shared services to reduce costs further locking in failure demand and waste, plus reducing the value received by the customer.

A better way is to realize that the paradox exists.  The benefit of this realization is that you can actually increase customer satisfaction and decrease costs that they are not diametrically opposed to each other that it is not a zero-sum game.  An organization can reduce costs and improve service by a change of thinking from command and control to systems thinking.  The systems thinking approach involves an unlearning and relearning process that opens up new methods in pursuit of profit.  Systems thinking involves the understanding of the relationship between purpose, measures and method.  It eliminates the waste by understanding customer demand, value, and flow.  In service, the improvements are quick because the changes are immediate (weeks vs. months).

New approaches are required by service organizations.  Organizations will need to shed “economies of scale” in favor of “economies of flow” this thinking will allow the small to mid-sized service companies to compete with the big companies, because costs are in the flow . . . not in the transactions.  Service organizations not understanding these paradoxes will be flushing profits down the toilet.

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.  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/TriBabbitt.

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