A Fundamental Thinking Problem

I have been a part of many “discussions” this week.  Most of them around my posts that challenge conventional wisdom on things such as best practices, targets and incentives.  I usually find that people conclude that organizations just aren’t using it (technology, measures, rewards, etc.) right or people are to blame (stupid people).  When I suggest it may have to do something with the way we think about the design and management of work . . .  the response is some variation of “no, that isn’t it.”

But that is it!
We are putting all of our resources into the wrong things. Like:

  • inspection and monitoring believing they make quality services
  • the belief that economies of scale will reduce costs
  • the belief incentives will motivate people
  • leaders need visions
  • managers need targets
  • technology to drive change

Businesses and government have become dysfunctional based on flawed thinking.  A better way to think about the design of work . . . we reference as systems thinking.  By taking people to the work and getting knowledge we can show them new ways to improve and it exposes problems to the way they currently think.  It is that shift in thinking, but egos and position get in the way.  The (typical) US mindset inhibits us from admitting mistakes in our thinking and moving on.  One is left to ask,”How could I have been so wrong about the design and management of work?”  It is to admit failure from some people’s mindset.

The Better way, you may never have heard of
The ability to discard thoughts of failure in favor of learning is a fine line.  Can we not learn or was that only for when we were in college?  The management paradox of new thinking may be the decider.


The above table offers a change to the fundamental thinking we have all been taught as the best way.  Our only hope is to continue to improve the way we think about the design and management of work.  There will always be a better way to do something.

The wonderful thing that happens as we change thinking is that we are given the ability to improve exponentially.  The improvements are large and will give any organization employing it an unprecedented competitive advantage in improving service, cutting costs, improving culture and innovation opportunities.

Looking for strategic change management that gives you wholesale business improvement requires a change to the fundamental thinking about work and how it is managed.

Leave me a comment. . . I can take it!  Click on comments below.

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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Why "Best Practice" Suffocates Thinking and Innovation

Talk about overused phrases in business . . . the phrase “best practice” is at the top of my list.  Annoyed by a word that can immediately shut down the brain.  While doing bank management consulting the Fortune 500 company I contracted with threw this word out consistently in discussions with customers.  “This is best practice to process applications this way” or “You really don’t want something different this is best practice”, and often I would stand in disbelief as the banking customer or prospect actually believed it.  Rarely was there any evidence to support the “best practice”, but even if there was, what purpose would it serve?

One thing drilled into my head through W. Edwards Deming, Taiichi Ohno and application is that organizations should never blindly copy.  The minute I heard that a bank was copying another bank I knew trouble would be found in time.  All systems/companies are as unique as each individual.  They have different structures, work design, management thinking, workers, skills, constraints, customers, demands, etc. And copying a process or idea from another company does not guarantee success and my experience is that either it flops or new ideas and thinking is stifled.

So What’s the Big Deal?
Simple, “best practice”, copying and standard work and the like don’t allow the absorption of the variety of demand offered by service.  I love the Olympia Restaurant skit from Saturday Night Live (click here to watch).  This to me is what I see in service organizations.  They have built systems with “best practices” that don’t allow the customer to pull value.  It’s much simpler to code software, have standard work and scripts as the bean counters will say, “we saved money!”  Customer demands have variety and they say, “I’ll go somewhere else to get my demands satisfied.” 

Taiichi Ohno built Toyota to handle variety of demand and in service the variety of demand is even greater.  Ohno understood that costs were not in “economies of scale” (another best practice), but that in a management paradox, costs were in demand and flow (economies of flow).  He understood that focus on flow reduced costs, focus on costs and costs will rise.  Further, by taking a systems thinking approach I have found that things like “best practices” inhibit flow.

Taking approaches such as “best practice” allow people to quit thinking and start doing.  But the approach Deming and Ohno pursued was that there was always a better way . . . so why stop thinking?  Each unique system has  everything you need to know to make it better.  There is no reason to seek a best practice, copying or benchmarking.

Our approach is to begin by getting knowledge in your system, but starting with “check.” Check allows an organization to understand the “what and why” of current performance or get knowledge about their own unique system.  It is a better way.

Leave me a comment. . . I can take it!  Click on comments below.

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]newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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US Healthcare: A View from a Systems Thinker

I wouldn’t consider myself a complete novice in healthcare as I have been a patient, consultant to State medicaid and the CIO for State medicaid.  I have not done much with private insurance other than being a consumer.  I did over the weekend watch Michael Moore’s Sicko which by no means makes him (or me) an expert in private insurance, but did bring up some fundamental questions regarding private insurance.  An appearance from former New York Mayor Rudy Giuliani brought up even more questions around both private and public healthcare.

As a consultant that redesigns the work of organizations from the outside-in, I am always interested in what seems to be missing as the consumer of services or in consultant speak “What matters” to the consumer.  As a consumer problems are always associated with the hassle of billing or even understanding the billing for as long as I have had insurance.  The sense of what I owe is always fuzzy with endless “updates” from my insurance provider.  Typically, with the message of we have submitted this to your insurance carrier.  This process seems to take months to clear itself and depending on your level of understanding one may be able to decipher all (rarely) or some of it.

Later in life I have developed a “chronic” condition . . . Crohn’s disease.  This condition has pushed me out of the mainstream (and would surmise Michael Moore would say “profitable”) pool of the insured.  I have to say this brings up question in my mind about the “profit motive” in healthcare, what good does insurance become when the healthy are the only ones that can be accepted?  I was able to enter a state pool program that in essence is forced to carry me and my condition.  But the scenario rings in Michael Moore’s Sicko where private insurance in its pursuit of profit declines the unhealthy and looks for ways to deny claims to remain profitable.  These are the same “system conditions” found in other businesses that actually increase costs and not reduce them.

Now looking inside-out from a Medicaid vendor.  Medicaid had different issues than private insurance.  Medicaid seemed to change with political parties and what their emphasis was for the new administration.  A behemoth budget item in any State, billions are being spent.  Most talk seemed to center on “controlling costs” which I have learned since that trying to control costs in a management paradox increases them.  Most of this controlling involves the call for new technology or ways to track expenses, something that has always increased costs and not reduced them.

Medicaid and Medicare are both highly outsourced rather you call it “privatization” or not.  Vendors to run the technology, surveillance and utilization review, pharmacy, audits, etc. that add millions (if not billions) to the program.  To me the problem is that none of the systems are designed with knowledge.  They are designed function by function based on FW Taylor’s scientific management theory where our attempt to decrease costs by function, increases the end-to-end costs as government requires more monitoring and inspection to insure that the pieces fit.  Add political ideology to this and you have a recipe for sub-optimization.

Rudy Giuliani’s bend was that all things are inefficient just that public healthcare is more inefficient.  This left more questions in my mind.  How can one draw a conclusion like this based on what data?  I always find politicians on both sides to be very anecdotal by nature and loose with the facts regardless of party.  I was left asking myself about the government solution for healthcare vs. the private insurance solution for healthcare.

So, left with a systems thinking perspective I have two sub-optimizing systems.  One that is run by the government and the other run by the private sector each wrought with problems in the design.  Both have been designed to increase costs and promote waste because they have not been designed as an end-to-end system with knowledge of customer demands. 

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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Big Companies are Really . . . Shhhhhh . . . Small Governments

I have worked with many different Fortune 500 companies in my career and the one item that they all seem to love is bureaucracy.  They have become small governments and some of them actual exceed the GDP of some countries.  So, why does it come as a surprise that they desire the same bureaucratic ways as government.  The sad part is many small companies lose the advantage they have over these behemoths by trying to become more like them.  The endless copying, project plans, cost/benefit analysis, targets, appraisals, inspection, monitoring, milestones, deliverables, technology, scripts, procedures, etc. become more entrapping than enabling to the small systems.  Yet, time after time I see companies trying to emulate the best practices of the big companies.  All the while in the pursuit of saving money these companies just keep adding expenses that offer little and usually no hope of a profitable return.

When you look at the reasons big companies operate the way they do, you will find flawed thinking around their actions.  They include:

  • Scientific Management Theory – The functional separation of work by department and unit with individual and group financial and performance targets.  All leading to sub-optimization and worse performance and lower morale.
  • Separating the decision making from the work – Big companies make decisions without knowledge about the work they manage, instead relying on reports and anecdotal evidence.
  • Technology – Because they never actually understand or see the work in big companies executives and managers require more and more technology to “control” the work and their pursuit of knowledge only winds up giving them information . . . not knowledge (let’s not confuse the two).
  • Productivity – Big companies are all about activity, they see activity as something to measure and keep track of when in reality it only adds waste.  Workers in big companies running around with procedures to write, project plans, PowerPoints, check lists, etc. to make sure the work is controlled, inspected and monitored.  While the people on the front-line doing the real work are left with “checking their brains at the door.”

This isn’t an exhaustive list, but you get the idea.  So why do companies that are small and mid-sized follow these companies blindly. . . “We want to be big (and stupid) like the big companies.”  I have talked about economies of scale being trumped by economies of flow which levels the playing field for organizations of all sizes.  But a new leadership strategy for companies of all sizes is required.  Business improvement doesn’t require most (if not all) the non-sense that big companies (aka small government) purport be required as most of it
is just waste.

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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Skeuomorphs

Peter Scholtes passed away on July 11th.  I remember attending (at least) two of his seminars that he put on in Indianapolis.  He was a very approachable and kind man that wrote two books that were classics . . . The Team Handbook and The Leader’s Handbook.

Skeuomorph was a name he presented in The Leader’s Handbook as “an activity or artifact that continues in use long after its original purpose has disappeared.”  The example that was used was the granddaughter asking the grandmother why her mother cuts the shank of the ham to put it in the oven when the original purpose for doing so was because the ovens were smaller when the grandmother cooked.  But the tradition continued from generation to generation even though the purpose for doing so had long disappeared.  Similar traditions in business have long been followed even though the purpose has long been proven to be old thinking, but still followed.  Let’s look at the list:

  • targets and other management by results techniques
  • incentives, rewards and performance appraisals for managing people
  • reliance on inspection for quality
  • paying attention to the individual will improve performance of the organization
  • financial and productivity measures used to drive improvement
  • scientific management theory
  • making decisions about the work separate from the work
  • using financial reports as a way to improve the business
  • believing manufacturing and service can be treated the same when variety of demand separates the two
  • copying another organization’s processes and methods for best practice

There are many more than the above list, the problem is we need to break the tradition of poor thinking that is wasting resources.  The skeuomorphs have become like a bad tic that is uncontrollable, but the leadership strategy is to continue to ignore the thinking problem that prevails.  Something like in Hans Christian Andersen’s The Emperor’s New Suit . . . who will be the first to tell the emperor that he has no clothes?

We are not the first to travel down this path: W. Edwards Deming, Taiichi Ohno and many others like Peter Scholtes spent their careers trying to change the thinking for a better path to prosperity and profitability.  But it is a road less traveled with much work left to do.  In memory of Peter Scholtes, the path he cleared for many will be long remembered and God willing . . . . eventually widened and paved.

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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Throwing Technology at the Problem

You see it every day in the newspaper somewhere.  A failed public sector innovation project that attempted to use technology as the tool to achieve efficiency.  Not that the private sector doesn’t have the same problem it just doesn’t make the newspaper as often.  But when things go awry in the public sector . . . everyone knows.

The problem starts with the call by stakeholders (newspapers, executives, legislators, etc.) to:

  • Automate a manual system
  • Replace “old” technology or an antiquated system
  • Reduce costs

I have never found these to be good places to start in the public or private sector.  The technology companies are all too willing to accommodate the request with either custom or pre-packaged “solutions” that will make things all better.  They usually don’t and in most cases make things worse.  With great waste the consumers of these solutions are left to the contract they negotiated for satisfaction.  Sometimes I  have even seen technology companies give away technology to satisfy a dissatisfied customer . . . just what a company needs is more of a mess as a “solution.”

Yet, public and private sector companies still keep coming back to buy more.  Hoping against hope that the holy grail of technology will save them yet.  The constant product stream from technology companies helps facilitate this false hope with always a new generation of products that surely will be better than the last disaster.

Technology to me is a supporting function, but some how . . . some way it has become the focus of improving organizations.  This doesn’t mean that technology is devoid of value, but it is certainly not a place to begin business improvement. 

The better place to begin is to understand customer demand and purpose, accumulating measures related to customer purpose and redesigning service to absorb the variety of demand that service offers.  Once we understand the work, then we can talk about pulling technology to enable the system to perform better.  Sometimes manual is OK and a better way than expensive and entrapping technology.  I rarely see this deployed for several reasons:

  1. Technology becomes the solution and everything has to “fit”;
  2. Standard work/process/procedure and best practice make coding easier, but does not allow for the absorption of the variety of demand received;
  3. Viewing customer demand from the inside-out rather than outside-in;
  4. Schedules and due dates are achieved to satisfy completion requirements; and
  5. Public and private sector organizations just don’t think this way.

I don’t know what the future holds, but I am hopeful that organizations quit throwing technology at the problem.  They haven’t been able to spend as much on technology during this recession (some worse off than others).  Most are or should be looking for better thinking around how technology is deployed.

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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Can I Have Extra Celery Instead of Fries? No?!!

Yesterday, I went to a Buffalo Wild Wings to meet a friend of mine.  I had decided on the wings, celery and fries combo.  Only I didn’t want the fries, so I requested extra celery ( keeps the weight down).  The response was shocking . . . my waiter responded, “Our computer doesn’t allow us to put in extra celery, would you like a salad instead?”

Wow!  This person now becomes my example of how entrapping technology can become at service companies.  Yet, I see this everywhere with standardization done to make software coding easier, “standard work” and “5S” accomplished with “Lean tools”, scripts, standard product offerings, SOP, etc.  Systems designed to make life easier for management, the vendor, etc. but incapable of absorbing the variety of demand that service offers.  Customers left shaking their head as to why they can’t get what they want, even when it is just extra celery.

Be it bank management consulting or customer service consulting the theme runs through most service organizations that I have worked with.  A strong belief that these standardizing activities actually save money when in reality they drive customers away or at least left scratching their heads.

Some people will say we have a people problem here.  Really?  The system was built to entrap and this person didn’t know how to deal with the variety.  I don’t know why the system entrapped the waiter, could be they have had shrinkage in the celery inventory or other areas or some management dictate that all orders have to be in the computer would probably be my first guesses.  But I am sure there was something in the system that didn’t allow me to get my “extra” celery (what we refer to as system conditions) and the individual was following orders that conflicted with my demand.

Standardization in service as a place to start is misplaced.  Organizations “saving money” may be losing customers or may be promoting other dysfunctional activities that add costs.  We believe a better “systems thinking” way is to understand customer demand by going to the work and finding out “what matters” to the customer and designing a system against demand.  Don’t you?

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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The Humanator: Rise of the Front-Line Worker

Anyone ever wonder what happens to that new worker you just hired, so willing to giveThe Humanator their life for their company?  A few weeks pass (maybe months if you are lucky) and the worker you just hired has lost that gung-ho attitude in favor of that dismal attitude of other employees.  Dr. Deming would often be asked in his 4-day seminar about what an organization should do about all the dead wood in their organization.  In which he would reply, “Did you hire the wrong people or just kill’em.”  The suggestion for this article is . . . we just kill’em.

Service executives and government management seek ways to “motivate” employees by:

  • playing games
  • coaching sessions
  • setting targets offering rewards and incentives
  • personality studies
  • working in teams
  • performance appraisal
  • individual and team recognition

The problem with these approaches is that 95% of the performance of any organization is attributable to the system, not the individual (only 5%).  So to address the problem that I see in organizations we are mostly working on the wrong things.  The poor work design, entrapping technology, targets and incentives that inhibit service to the customer, management decisions about the work they do not understand, etc. . . . all play roles in creating what we call the system.  This leaves our front-line worker with little opportunity to be accountable or innovative when the decision-making has been separated from the work.

The targets and incentives drive the wrong behavior. Achieving targets and the incentive captures all the focus of the individual’s creativity robbing the organization of potential innovation breakthroughs in service or product.  To achieve the target for the reward or to avoid a “coaching” session usually involves some type of manipulation or cheating on the part of the worker at the expense of serving the customer or exerting energy to innovation or improvement.

Another method to limit the importance of the worker has been through entrapping technology, scripts, policies, procedures, standard work and other efforts to “dumb down the front-line worker.”  Kind of reminds me of Geico . . . “so easy a caveman can do it.”  All these things in service industry make it almost impossible to absorb the variety of demand that customers offer putting the worker in a state of flux, do I serve the customer or these stupid mandates my management has given me?  Technology is typically brought in by command and control management and thrust upon the worker telling them that it will get better when they get used to it.  The worker continues to be accountable for the work where they have no say in the decision-making.

The question around customer experience is why customers don’t trust brands the same as 10 years ago.  Service has been in a decline for longer than that, the mantra for command The Humanatorand control thinkers is I must cut costs and in a management paradox have increased costs and worsened service to customers.  If a service organization wants to communicate authenticity, energy and trust to customers we must return the front-line worker to the forefront  . . . only they can deliver these things . . . they are the humanator of bad service and increased costs.

How do you unleash the humanator?  We first must understand customer demand and purpose, and measures that matter to the customer.  Employing purpose and measures where the work is done allows the liberation of method by the front-line worker.  Innovation, value and profit from the newly engaged front-line worker is accompanied by business cost reductions.  A well-served customer is less expensive to serve than a dissatisfied one.  It is not the zero-sum game of a trade-off between service and costs that command and control thinkers believe it to be . . . good service always costs less.

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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The End of Trust?

We have seen an amazing transformation occur over the past 18 months.  This has been initiated by the banking industry by Ponzi schemes and mortgage fraud in the banking industry.  Life savings have been sacrificed, homes taken, taxpayer money spent, and jobs lost.  This is well-documented.  This doesn’t mean that all banks are bad and in fact . . . a large majority of banks steered clear of the need to make “easy money.”  The problem is that this industry has been tainted by the “best and the brightest” in large banks.  Probably another post on my speculation of why “the best and the brightest” do stupid things, for a preview I suspect selfishness nurtured by reward systems that made these pursuits acceptable.  Regardless of the reason, we now face a crisis of trust.

I was listening to John Gerzema (Young and Rubicam) at The Marketing Forum in San Francisco Avoiding the Looming Crisis in Brand Value (Listen here).  He mentioned several items that the consumer is dealing with right now and include:

  • Selfishness and Collusion
  • Egregious and Criminal Behavior
  • Decaying Infrastructure
  • Failure of Regulatory Oversight
  • Taxpayers as Shareholders
  • Lack of Permanence

Mr. Gerzema in stating the obvious talks about how trust is important to the consumer, but has not been high in importance to corporations.  Ah Duhhh!  Seems like we have played this song before, remember Sears and the mystery car repairs where targets and incentives drove stores to “find” repairs?  The same trust issue exists today as the targets and incentives drove our banking system further and further from what mattered to customers.  Let’s face it, we all were a little greedy and now we are paying the piper.

Many have talked about the transparency needed in organizations or more regulation by government.  Transparency is difficult to achieve as unscrupulous organizations can always hide things or misrepresent them and more regulation will add costs plus there is no guarantee that regulation will keep us from the next crisis.  Regulation may help to prevent a crisis like the one we just had, but not the next crisis as it will be different in some form.  Instead of transparency and regulation, maybe we need to review the target and reward systems that help drive the wrong behavior in the first place.  Targets and incentives have become the defacto purposes in many organizations, hiding the real purpose of serving the customer.

Social media is bringing a different game to the field where now a person can call out an organization.  You get more than one person experiencing the same problem your organization may have a crisis on its hand.  Companies are running out of places to hide their poor product or service.  So, wouldn’t it just be easier to fix the problem?  I would submit to you . . . the answer is yes.  The answer that will possibly save the future.

My hope is that corporations will see the value of systems thinking which focuses attention on the customer, not because we just had a crisis . . . but because when we focus on the customer provisioning services costs less.  This is not the command and control thinking we are used to having in the US where we believe there is a trade-off between costs and good service . . . it is a management paradox. 

We can actually lower costs and better service by providing good products and services.  We don’t need to hide problems, we need to address them.  The customer has a voice louder than ever.  Corporations are in need of building systems that understand customer demand and purpose associated with these demands.  If we begin to rebuild our organizations to acquiesce to customer demands we have a better chance of re-building the trust lost between customer and company.

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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Indiana State Welfare Eligibility: Time to Turn Lemons into Lemonade

At this point everyone understand the debacle of the Indiana Welfare Eligibility program run by IBM and its partners.  Currently as it stands there are no winners in this situation.  All the stakeholders IBM (and its partners), applicants/recipients, FSSA, executive/legislative branches of Indiana government and most of all taxpayers.  The damage has been done and each of the above stakeholders stand to lose something of value.  So . . . as much as we may dislike our situation, we need IBM to succeed.  After all, they are now in the best position to improve things and save taxpayers from more wasted money.  Here is a suggested formula for turning lemons into lemonade and what each stakeholder should be asking for:

The Taxpayer.  There is one thing the taxpayer needs . . . transparency.  If things are going well we don’t need transparency, but when things are going badly we need to be both educated and informed on what is happening.  So here is what the taxpayer should be asking for:

  1. The corrective Action Plan submitted by the vendor IBM.
  2. The measures with operational definitions that will be the indicators that things are getting better (or worse).
  3. The criteria for keeping or cancelling the contract.
  4. The FSSA plan if the contract is terminated.

The Governor and Legislators.  Other than making sure the taxpayers get the above four items . . . nothing.  They don’t understand the system enough to legislate improvements and audits at this point will just add costs and more confusion.  One thing that might be helpful is to have a small group of legislators that would take some phone calls and walk the process end-to-end so they can speak intelligently about what is actually happening instead of hearing anecdotal testimony alone.  Note: I did this as CIO for FSSA and it was eye-opening. 

FSSA.  Three things:

  1. What are the criteria for cancelling the contract?
  2. If you are forced to terminate the contract, what is the plan?
  3. Lessons learned.  We have a learning opportunity here.  What have we learned that we can leverage moving forward for the State of Indiana (regardless of party affiliation).

IBM and partners.  I have spent some time gathering information from reporters, legislators, caseworkers and recipients/applicants acquired from many different mediums from many different states.  It will not do us any good to pick through all the detail, but I have some basic elements that should be addressed.  Learned from my 95 partners in the UK, here is how to turn lemons into lemonade:

  1. Study the demand.  The calls coming into the Marion call center is a good place to start understand the type and frequency of the demand.  Understand whether these demands are statistically predictable or not.  The demands should be separated into value and failure demands.  Failure demands are all follow-ups, repeat calls, chase calls for status, or any failure to do something or do something right for the applicant/recipient.  The failure demand % of calls should be one number to pay attention to and reported to FSSA, legislators, the Governor and the taxpayer.  You will need to engage the call center worker for this activity, they understand the demands better than a report or manager.
  2. Understand the value created by type of demand.  Examine the current response to each type of demand.  Rate the response in terms of value created for the applicant/recipient at the point of transaction (where the applicant/recipient meets the call center).
  3. Understand the flow and eliminate the waste.  How the applicant/recipient demand is dealt with through the system.  Is the demand dealt with in one-stop or handed-off?  Map the flow, walking it end-to-end (from the customer perspective) identifying the waste.  Eliminate the waste.

Lemons to get rid of:

  • Unnecessary forms, paperwork and reports
  • Handling progress chasing requests
  • Working with unreliable or inaccurate information
  • Dealing with mis-routed phone calls and documents
  • Inspection, logging, batches and queuing
  • Duplication
  • Dealing with problems caused by hand-offs
  • Obtaining authorization
  • Firefighting – Symptoms rather than causes
  • Targets and incentives (pay per call)
  • Entrapping technology
  • Standard work and scripts that don’t absorb variety of demand

The one lesson I hope any state will learn is that technology should not be pushed, it needs to be pulled.  Just because the system is manual doesn’t mean that an automated system is better.  We need to improve the systems (structure, work design, measures, management thinking, constraints, etc.) and then pull in technology as needed. 

One former case worker pointed out to me that although the previous system was labor intensive working with the applicant/recipient allowed a relationship to develop.  This was important in helping to head off fraud or gaming the system something that a report or data can’t do.  The new system (not just the technology) separated the work with more hand-offs, quotas and focus on efficiency that was misguided.  I recognized this as scientific management theory and the functional separation of work that leads to sub-optimization and waste.  Every piece optimized does not make a good end-to-end system.

My wish for all stakeholders is that the Indiana Welfare Eligibility system works well moving forward and whatever system that comes out of this will serve the State well and be more than just doing the wrong thing, righter.

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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