Contact Center Call Back Technology – Save Your Money

June 20, 2012 Tripp Babbitt Leave a comment

For a little over three years, information technology companies serving the service industry have been advocating call back technology. Before you rush out and spend unnecessary capital, consider what you are actually getting – something to add costs to your already poor work design.

So, let’s take a look at what traditional thinkers say about call back technology.

From call center helper and their article titled, Everything you Need to Know about Call Back Technology.

High abandon call rate – for example, 10%+
Low abandon rate – for example 3%, with overstaffing for peaks
New business call centre, where you don’t want to lose a single call
High agent attrition
Staffing difficulties and resultant problems managing call flow, for instance, during unpopular shifts
Customer satisfaction issues
Headcount restrictions and/or space constraints
Training and agent deployment

These are the same management problems that every contact center faces, so why not call back technology?

Customers are calling when it is convenient for them and your organization is calling back when it is convenient for you. Although customers don’t have to wait on the phone, they still have to wait. We are solving the wrong problem.

Contact centers are concerned about the wrong things. The problem they have is their thinking about the design and management of work. Better designed work through better thinking can increase both capacity and capability. Failure demand (the failure to do something or do something right for a customer) is the product of poor thinking and work design.

Failure demand runs upwards of 75% of all calls and sometimes more in contact centers. Instead of treating all calls as work to be done, why not design a system (with better thinking) that doesn’t create all these calls in the first place?

The real beauty of redesigning the system is that it gives you capacity to take calls and provide good customer service. Even better, it costs less . . . a lot less. Want to learn more? Download the Transforming Call Centers guide.

Come hear me speak at the CAST conference in San Jose, California! Re-Thinking Management . . . Re-Thinking . . . 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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the The 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Colonel Harland Sanders – What We Can Learn from His Life

June 19, 2012 Tripp Babbitt Leave a comment

English: Logo of the Kentucky Fried Chicken Corporation. Français : Le logo de le Corporation Kentucky Fried Chicken. (Photo credit: Wikipedia)

My father used to share with me stories of his travels in the 1950s (before interstate highways) where he went to the original Kentucky Fried Chicken restaurant in the “backhills of Kentucky.” As a traveling salesman for the Diamond Chain Company he was often in small towns that have all been replaced as the new highways were built – not unlike Radiator Springs from the Disney movie Cars.

The thing I learned most from Harland David Sanders life was he was a true entrepreneur. He actually made the chicken that would become famous and came up with a secret recipe of 11 herbs and spices. It didn’t end there, as he began to franchise his secret recipe to other restaurants he was truly involved in the work. He was uncompromising in his approach to the quality of his product and apparently had the vocabulary to be sure that franchisees understood that he would take his pressure cooker and leave if they didn’t make it exactly right.

His business was obviously successful and the business was sold to a group of investors headed by an attorney – the future Kentucky Governor . . . John Y. Brown. The company was sold for $2 million (roughly $15 million in today’s money). However, the company went public and made $285 million with the stock offering, but Colonel Sanders didn’t trust the market so he had turned down 10,000 shares. Almost all the franchisees and employees of KFC became instant millionaires.

Rather telling to me is that a great product led to many people being rich. The person who profited the most was an attorney . . . someone that didn’t make the product. No wonder in the US we have so few people that want to actually do work if you can be rich just by learning the law or accounting. These disciplines can not create the actual value, they can only take advantage of another’s work. We have lost much of the ability to invent as college students want to be attorneys, financiers, bankers and bean counters. We need less of these and more Colonel Sanders, Steve Jobs and others that create value. Products and services create value for customers . . . the rest are sponges.

The same holds true for today’s business. In service, those that create value for customers are on the front-line and yet the most money is paid to those that are there to support the front-line. Colonel Sanders respected and valued the work and product, sounds like a great recipe to me and doesn’t have to be a secret.

Come hear me speak at the CAST conference in San Jose, California! Re-Thinking Management . . . Re-Thinking . . . IT!

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2012 Global Customer Service Barometer

June 13, 2012 Tripp Babbitt 1 Comment

I am not much for surveys these days, but I ran across the 2012 Global Customer Service Barometer prepared for American Express by Echo. The best way to find out how you are performing is to actually know before the customer hangs up. Because, once the call is over the opportunity has passed to provide service – one reason I am not a fan of customer satisfaction surveys (another is that surveys rarely ask questions “that matter” to customers).

Some things that stood out for me in the survey:

Customers are not seeing much change in customer service.
Businesses are more likely to miss your expectations than exceed them.
Customers will pay more for customer service.
Consumers expect excellent customer service and don’t expect to pay more for it.
Consumers are likely to tell 8 or more people about their excellent service.
Consumers are likely to tell 11 or more people about their poor experience.
Consumers prefer to speak to real person either by phone or face-to-face.

As anyone can see from the survey, consumers want good service. Just so few deliver it. Why is this?

Many organizations view customer service as a zero-sum game, where the belief is that good service costs more. This is not true, great customer service costs less.

This also means if customers want to talk to a real person, it will be less expensive than that expensive IVR and voice system you just bought to save money. I have often found these technologies entrap the customer and workers – increasing costs.

There are some numbers more nebulous than others. For instance, knowing how many customers say good and bad things is a very difficult number to know for your service. However, failure demand is something to sink your teeth into. When customers place demands on your customer service people that are failures it is very expensive. Worse, is the amount of failure demand hitting contact centers or other service workers. It is typically between 25 and 75%. That is the bad news, the good news is that in most service organizations it can be designed out.

A better service design also requires better management thinking about how to manage the work. Activity measures like AHT and service levels are the wrong measures. They play to the zero-sum game, failure demand measurement is a whole different game. To deliver better service, we have to reduce failure demand that reduces costs too.

There are other measures that are important too. These may be end-to-end measures derived from “what matters” to customers. These require others outside the customer service arena to support making a design that meets the demands of customers.

No matter what the survey says, it can not replace getting knowledge about that what and why of current performance of your organization. Learning about customer purpose, types of demand (value/failure) and the flow of the work will help you understand about the assumptions associated with design and management of work.

Come hear me speak at the CAST conference in San Jose, California! Re-Thinking Management . . . Re-Thinking . . . IT!

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GM and the “Frozen Middle” – What We Can Learn

June 12, 2012 Tripp Babbitt Leave a comment

Interesting article in the WSJ today called, GM Chief Labors to Get Rebuilt Carmaker into Gear which outlines some of GMs difficulties. There is a little bit of everything:

Functional separation of work leading to in-fighting
Outsourcing
Performance rewards that cause internal competition
The bureaucracy created by those in support functions
Economies of scale thinking

All of the above perpetuate the problems of GM. Economy of scale thinking has long been replaced by economies of flow. Remember the US had all the scale after WWII and lost manufacturing to a country with little or no natural resources or scale – Japan. The scale thinking has to go, before the country does.

However, I see more of the “frozen middle” than anything. Support functions and middle management that stagnate whole organizations. They are people that cannot say “yes” and add costs and bureaucracy to organizations. Like a boat anchor to ships these folks eat resources and ruin whole financial budgets. The need to get these folks jobs that create value or enable those that create is a daunting task. Most people in non-value adding roles see themselves as adding value and often so do the executives that put them there.

So, the frozen middle remains frozen. Incapable of creating value and there unintentionally to thwart innovation and invent hoops for those that can create value to jump through like policies, entrapping technology, standardization, rules, etc. The problem with the frozen middle is irony. It is ironic that it freezes progress, but as the dysfunction grows so does the middle expand its activities. Organizations intending to reduce costs, increase them as they add more folks to the middle ranks.

GM is not unique in this problem. All organizations have a frozen middle, they are there to make things run smoothly. However, counter-intuitively they make things much worse.

Come hear me speak at the CAST conference in San Jose, California! Re-Thinking Management . . . Re-Thinking . . . IT!

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The Reckoning – Poor Management in America is Still the Problem

June 8, 2012 Tripp Babbitt Leave a comment

Almost 62 years ago (July 13th, 1950), W. Edwards Deming met with 45 Japanese leaders that represented about 80% of the capital of Japan.

Dr. Deming had found his audience.

Largely ignored in his home country (USA) after WWII because the world had only one place to buy products . . . the US. The industrialized mindset was born. The methods Deming and Shewhart had taught during the war effort to make better quality military products were forgotten.

One engineer that had worked at Western Electric during the war was back 8 years later and the control charts they had used were now missing. The basics to manufacturing better products were now gone. Dr. Deming sought refuge in the US Census Bureau as US management used mass production to fulfill world demand.

As a statistician, Dr. Deming arrived in Japan in 1946 and 1948 to help with the census. He was asked to talk about Quality Control to a group of engineers where he said it would be pointless unless the highest executives attended as well. His sponsor, Ichiro Ichikawa did just that and because of Ichikawa’s importance in post-WWII got the attendance Deming desired in July 1950.

Dr. Deming who had grown accustomed to being ignored . . . found his audience. He promised the Japanese that in 5 years that the Americans would be screaming for protection from Japanese products – they did it in four (in Deming’s words).

Within months, Japanese companies reported 30% + improvement in productivity by focusing on quality. While the Japanese embraced the basics, his countrymen moved further and further from them.

Decades later, the Toyota Production System (TPS) became all the rage in the US. The work of Taiichi Ohno was “discovered” by the Americans. There would have been no TPS without the groundwork done by Dr. Deming in Japan. The funny thing is that Americans are all running to Lean, when they should first be understanding the basics that Dr. Deming learned while working with the Japanese. Ohno is indeed a product of American thinking and not vice versa.

US management has largely destroyed manufacturing in this country. Outsourcing to other countries with cheaper labor is a natural extension of the industrialized, mass production mindset. The problem is often pegged as a labor problem when America’s thinking about the design and management of work is the source.

The economic crisis in the US offers opportunities to rethink our approach and come to the realization we are wasting our natural resources with an inability to manufacture or service in a suitable fashion. The economic tsunami that has befallen us is a product of playing games with finances rather than improving on the basics.

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Does Deming’s 95/5 Discount the Individual?

June 7, 2012 Tripp Babbitt 1 Comment

W. Edwards Deming (Photo credit: Wikipedia)

Still the most talked about and controversial of W. Edwards Deming thinking is what I reference as the 95/5 rule – that 95% of the performance of an organization is down to the system and not the individual. It isn’t a rule and, as I have stated in previous posts, it is not empirical. Dr. Joseph Juran though the number was 85/15 and based on Dr. Deming’s experience the number was thought to be 95/5.

So, does this mean that the individual is not important? NO!

The design and thinking about the management of work is so poor in service organizations that the individual is rendered completely irrelevant. The individual worker gets entrapping technology forced upon them. The work is functionally separated where the worker can never finish a piece of work and the result is no accountability. Improving the system restores the individual.

Dr. Deming’s central theme is restoration of the individual. Fear, competition, manipulation and performance appraisals that result in ratings organizations have undermined the individual.

W. Edwards Deming believed some really simple things for workers:

Joy in Work
Cooperation
Intrinsic Motivation
Systems Thinking
Self-Esteem
Never-ending Learning

He implored us to adopt new thinking for a new economic age. When do we get to see this happen?

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Have We Surrendered Our Companies to Wall Street?

June 1, 2012 Tripp Babbitt 2 Comments

Executives are much like a wealthy family that annually sells acreage . . . Until the plantation is gone, it’s all pleasure and no pain. In the end, however, the family will have traded the life of an owner for the life of a tenant farmer. – Warren Buffet, The Selling of America, Fortune Magazine 1988

If anything the past few decades have taught us is that companies the world wide have become slaves to investment companies. Hitting the numbers promised to Wall Street has become the defacto purpose of whole publicly-traded organizations. The dysfunction to hit these numbers is evident in moves to reduce staff or make other short-term cuts that will ultimately lead to a long-term increase in costs.

President Barack Obama and Warren Buffett in the Oval Office, July 14, 2010. (Photo credit: Wikipedia)

It is without doubt an unenviable position.

I have always felt cutting staff in any form is not an optimal solution. I have always felt the best route that shows leadership is to first cut out executive bonuses should go first and then across the board executive compensation cuts. The next thing to do across the board cuts in compensation. However, if cuts have to be made then the front-line staff (or those that create value) should be kept and all other positions should be cut. Front-line staff are the only ones that can create value for customers.

If an organization is mature enough in using the 95 Method, these are good strategies to deploy. Because to me, maturity has to be the depth that the thinking has permeated the organization (i.e., executives “get it”). Sometimes we are lucky enough to start in this position with organizations, other times we are not. Redesigning organizations can be construed as simple in comparison to changing thinking of executives.

No matter what when the numbers or the company is at risk, organizations either have to or feel compelled to act. The response predictably increases long-term and total costs. We have surrendered our companies to investment firms that drive for greater results, which in and of itself sounds OK until we get the type of actions that results in what Warren Buffett described and damage the organization.

There is a better way.

Dr. Perry Gluckman (Deming’s Profound Changes – DeLavigne) had a view on this:

“The Message is simple!

Every system is broken.
Being competitive in the market means improving the system faster than the competition.
We are all part of the problem, and we are all part of the solution.”

Wall Street has driven us apart by class and by thinking. The bottom-line now prevails over what is right for the system in too many cases. Time to rethink our position.

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Monthly Archives: June 2012

Contact Center Call Back Technology – Save Your Money

Colonel Harland Sanders – What We Can Learn from His Life

2012 Global Customer Service Barometer

GM and the “Frozen Middle” – What We Can Learn

The Reckoning – Poor Management in America is Still the Problem

Does Deming’s 95/5 Discount the Individual?

Have We Surrendered Our Companies to Wall Street?

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