Why Beginning with Standard Work Destroys Service

October 29, 2010 Tripp Babbitt 51 Comments

In the process of reading a book on improving health care, I came across the same old problem that seems to get replayed. This is the problem of standard work in service industry.

I first came across the problem in the software industry while trying to improve the work I was constantly running into the need to standardize – as this made it easier to code and hit those all important project target dates. Soon, I was met with “you are changing those requirements are you?” comments when the requirements were ready to code.

Standardization is the name of the game in banking software as we have best practices and that all important “one best way.” But implementation was always rough as the variety of demand being received could not be absorbed by the software.

The problem was two-fold. First, the work design was poor something software doesn’t address in the right way. Secondly, to code we need standardization.

This is one reason why humans are often better than software in service. Software like IVRs and work-flow systems are rendered useless as the variety in service is great. They completely miss the opportunity to redesign the work.

Lean consultants from manufacturing that now work in service, face the same problem. Where standard work is necessary in manufacturing as it is important to planning and flow, service has different problems.

Until we first grapple with variety in our service organizations, standard work makes no sense. Instead we need to study customer demands and design systems that can absorb variety, deal with customers in one-stop (minus the failure demand) and provide good end-to-end service.

By omission or commission we miss the problems of service. Some believe inconsistent service is because of a lack of variety, but many times (counter-intuitively) it is because of our inability to to absorb variety . . . not lack of standard work.

When you study your service organization as a system, you will discover the type of variety that is brought by customers. More importantly, you will begin to see that the standard work, work standards or standardization is raising costs and frustrating customers and employees. Go look for yourself.

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Tripp Babbitt is a columnist (Quality Digest, PSNews and IQPC), speaker, and consultant to private and public service industry.

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Shared Services, Systems Thinking and Government

Shared Services in Government – Increased Costs Hidden from View

October 27, 2010 Tripp Babbitt 1 Comment

I am not against reducing government costs . . . but I am not for increasing them mindlessly either. I have written about this before (Shared Services in Government: 4 Reasons Not to Share and Dos and Don’ts of a Shared Services Strategy), but election time brings craziness and promises to balance budgets. Many like to provide financial evidence that this works, rarely have I found this to be true.

Where is the evidence?

Supporters will show you that they had two or more “like” functions and combined them. The financial savings are obvious.

But are they?

Not really. Here is what we have found in the United Kingdom on some IT-led shared services projects:
• The shared services programme for the UK Research Councils – sharing IT, HR and finance – which was bought at £40m and is now forecast to cost £120m (and it ain’t over till the shared services work, which they don’t and probably won’t).
• Much the same has been reported with the shared services initiative at the Department for Transport. Sharing HR and finance was supposed to save the taxpayer £57m, but it is now on track to cost £81m.

Economies come from flow, not scale and too many political wags have got it wrong. They want to reduce costs, but pull all the wrong strings because they appear to make sense. It is the ultimate waste of tax dollars.

Further, the financial and/or technology companies leading the charge to shared services are locking in waste. The curious will read the articles above to understand why . . . as for the rest quit wasting taxpayer dollars.

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Tripp Babbitt is a columnist (Quality Digest, PSNews and IQPC), speaker, and consultant to private and public service industry.

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Systems Thinking and Management

Service – Finding the Time to Improve

October 25, 2010 Tripp Babbitt 1 Comment

The age old problem of finding time to improve is one faced by every service business in search of such an endeavor. Typically, that is why only an understanding of the activity in dealing with waste (like failure demand) can get an executive’s attention.

When workers are spending 40 – 60% of their time dealing with problems that are created by the design of the work from the current management perspective. This shows that activity, or being busy, is not necessarily a good thing. The penalty for this thinking is loss of business or increased expenses or more commonly both.

Sitting back any executive would lick their chops at the prospect of business improvement of 40 – 60%. I would challenge executives that this is their job, to take action on the system to make the work better an easier for workers and customers. A more appropriate use of time than pouring over reports and financial statements or dreaming up new ways to reorganize or set unrealistic targets.

The problem with reports and financials are that they provide no context or perspective that can only be gained when in the work. Reorganization and targets are done in a vacuum with no knowledge of the unintended consequences of such actions. All seem plausible, but few deliver the promise from the PowerPoint presentation.

So finding time is relative to where an executive puts the focus of their attention. The choices are inside-out as a function or outside-in as a system. The inside-out approach is both sub-optimizing and divisive. While out-side-in as a system can provide a whole new design in pursuit of eliminating failure demand.

Let’s see . . . spending time improving based on better design that leads to lower costs, happier customers and less wasted activity. What’s not to like?

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Tripp Babbitt is a columnist (Quality Digest, PSNews and IQPC), speaker, and consultant to private and public service industry.

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Systems Thinking and Education

The Education Witch Hunt Continues in NYC

October 22, 2010 Tripp Babbitt Leave a comment

: Image via Wikipedia

You can tell it’s Halloween. These are scary times, not just economically, but in education. The new McCarthyism era begins as teachers brace to have their names with associated student standardized test scores. We saw such madness this past summer in Los Angeles when the same thing happened.

I will state again before writing this post, I am not or ever have been a teacher.

W. Edwards Deming taught us long ago that the performance of any system is 95% attributable to the system and only 5% the individual. But US education political hacks continue to ignore this with the same perilous consequences that US manufacturing and service do. This is the type of ignorance we have little time for in improving education for our children.

Teachers, that actually do work that is of value need to be engaged to help us fix education, not blame them. Arne Duncan and other state superintendents continue to want to find the problem teachers instead of focusing attention on the system that creates poor education.

Michele Rhee heralded as being brave in her quest to improve education by firing whole school systems of teachers and administrators just resigned. This is brings hope that sanity can be restored to approaches to improve education.

The advent of the US Department of Education and other state departments of education need to be abolished. They have done nothing but add more costs that have done nothing but decrease the efficacy of education. Billions spent with a decline – that’s bad business and education, especially in a country exploding in red ink.

If we get rid of all the political hacks making things worse, we will have more money to hire more and better teachers. This is far better than the approach where more money is spent on standardized tests, administrative costs and plots dreamed up in education to rate principals, schools and teachers.

We continue to throw resources at the 5% that will do us no good in improving education.

I know there is evil in the world, but the witch hunt for teachers is a 1600s type of thinking.

An important video against the target-based Deliverology that is being introduced in the US also offers some thoughts on improving education.

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Tripp Babbitt is a columnist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

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Systems Thinking and Government, Systems Thinking and Technology

The State of Indiana – Waste Begets Waste in the Human Services Agency

October 21, 2010 Tripp Babbitt Leave a comment

The good news is that the Indiana FSSA Secretary is taking a lobbying job in the private sector. The bad news is that the trail of carnage and expense left behind by the outsourcing contract to IBM continues to bleed the State of Indiana.

Who knows, a couple of winks and a generous donation and IBM may be in the clear on this one and taxpayers will be left hold the bag (again).

As waste begets waste, the IBM suit will involve the brother of a key aide to the Governor’s office to help defend the State. In fact, it was a specific request of the Governor’s office according to Bryan Corbin (from the State Attorney General’s Office).

This is not a political blog, but the premise to “modernize” the eligibility system continues to add costs and waste that future attempts should contain some form of due diligence. This approach opposed to political hacks with preconceived notions and a distrust of the worker.

If or when political wags discover that they need to first study their organizations BEFORE making changes and redesign systems based on what they learn we will all be better off and spend far less. Instead, governments will be blindly cutting the budgets while people (taxpayers and voters) get less from government. We can redesign services to do more with less with this different and better approach.

Unfortunately, with all the technology being implemented in governments, costs in government continue to skyrocket. The problem is not more technology, but better design and thinking.

The State of Indiana will be paying for this fiasco for years to come in the State’s largest and most expensive agency. The hybrid program is by all accounts doing the wrong thing, righter. Poor design weighs down the eligibility program in expense. This is neither fiscally conservative or good government.

95 is offering a free trial of their program that has worked throughout Europe. They key here is free. FSSA can study their system and still clean-up costs before their tenure ends in a little over two years. This gives them a choice to spend more or reduce waste in government. Choose one.

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Tripp Babbitt is a columnist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

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Systems Thinking and Healthcare

The Problem with the VA Study: Surgery Checklists Saving Lives

October 20, 2010 Tripp Babbitt 24 Comments

The VA study: Surgery Checklists Saving Lives is the kind of stuff that lean folks stand up and say, “see how tools work.” It is a false premise that will have hospitals running around implementing checklists to save lives.

If only saving lives were that easy. It is the type of headline that leaves systems thinkers shaking their heads.

In as much as there may (or may not) be a place for checklists. The reduction from a 17/1000 to a 14/1000 death to surgery ratio (besides bringing up statistical questions) doesn’t set the thinking on how to eliminate the next 14 deaths. The copying of tools does not promote the next new thinking needed to solve new or other problems.

Improvement is a function of changing our thinking . . . not standardization as a place to begin improvement. The lack of understanding this creates an inability to achieve sustainable and continual improvement.

Checklists have been around for a long time. The VA hospitals are not the first to try them – believe it or not. Unless we change thinking we fall into a hazardous trap of thinking that improvement is just about tools and implementing things like checklists. This is dangerous as hospitals wait for the next discovery rather than seeking to solve problems from the minds of their own workers.

Implementing checklists may have a worse effect in a hospital that has a poor work design and command and control thinking. Then we will be reading about how checklists kill patients.

If hospitals are to improve the work the need to start with “check,” not checklists. Understanding their hospital as a system from customer purpose. A normative approach will help change the thinking that created the problem in the first place buy understanding the “what and why” of current performance.

A redesign of the work will follow and it may find a different and better approach than checklists. As improvement is emergent from the work, not from tools. The checklist tools will stifle innovation as copying usually does.

There is never a bad time to begin to change thinking and redesign a system. Today’s problems require more than checklist thinking . . . they require systems thinking.

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Tripp Babbitt is a columnist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

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

The Management Brain Enema: If You Want Change, Change Your Mind

October 19, 2010 Tripp Babbitt Leave a comment

Most of the feedback I have received about my Quality Digest column and other columns I write has been positive with respect to the need for management to get a brain enema. Of course there is always one reader with a different view. This reader believes that a brain enema means you have sh*t for brains.

An interesting take and may apply to this reader, but not my operational definition.

It plain terms it means there is a need to flush out old thinking and replace it with new and better thinking.

So, what is the old thinking?

Scientific Management Theory – Born from Frederick Taylor back in the early 1900s and created the functional separation of work that hampers most organizations.
Management by the Numbers – Initiated by AP Sloan back in 1930s GM. Separated the decision-making from the work where manager’s manage and worker’s work. Targets became fashionable and we now know the damage they create.
Economies of scale thinking – This thinking dominates manager’s minds where we now know that costs in the flow (economies of flow). Costs are end-to-end from a customer’s perspective.
Valuing hierarchy over the work – In today’s companies, managers believe position is more important than knowledge. This is how bad decisions get made. Very few managers understand the work they manage which is a always a costly mistake. Decisions made with the work can eliminate the need for excessive planning.
Information technology is a cure-all – Today’s managers (especially government management) believe that any manual process should be automated and if it is not should be obsolete. IT is good for some things, but people absorb variety better.
Standardization is good – Too often managers work to standardize processes. This thinking was born from manufacturing and is a costly assumption for service. Variety of demand is the biggest challenge for service. Organizations standardize and entrap workers with technology. Service companies need to absorb variety not turn it away.
Rewards and incentives make workers better – Nothing is more controversial than this topic in the US. Workers and managers are definitely motivated by incentives, but the targets become the defacto purpose and drive the wrong behaviors costing money and customers. Anybody still remember the banking crisis?

There are a slew of others that could be written about what to change. This thinking is creating waste on a colossal scale. Some may be offended by the analogy of a management brain enema. But if the old thinking prevails and money and customers are thrown out the window than . . . hmmm . . . maybe my reader is on to something?

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Tripp Babbitt is a columnist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

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Systems Thinking and Education, Systems Thinking and Management, Systems Thinking and Measures

Questions at a High School about Systems Thinking

October 19, 2010 Tripp Babbitt 2 Comments

I was asked to speak at a high school today and presented a historical timeline of management thinking. The teacher wanted to be sure that I put something in about the future in jobs, which I did. The picture I painted was probably more optimistic than I actually feel as jobs are outsourced or shipped over seas.

I gave them the usual timeline of Frederick Taylor and scientific management theory that led to the functional separation of work with incentives. I added in the bit about Schmidt, Taylor’s worker that could increase his wage from $1.15 perday to $1.85 per day by increasing productivity. This is the model American management still runs at great peril.

I told them about A.P. Sloan ad “management by the numbers” and the use of targets. Sloan separated management and worker and lived by manager’s manage and worker’s work. Management caught in the work or not making their numbers were frowned upon or fired. Hasn’t changed much here in the US, other than now you can get fired for making your financial targets because someone up the ladder didn’t make theirs.

I told them about Shewhart, Deming and the Japanese Industrial Miracle. How we didn’t pay attention to what Deming taught us and we continue our decline that started in 1968.

We talked about bad service that we get in companies like Sprint, AT&T, Verizon and McDonalds ( hard to get no onions . . . this is important to a high school senior). This led to a discussion on why companies give bad service, when it osts them more money and loses them customers. I explained this is what happens when you manage by the financial cost, costs increase . . . always.

The hope is that these Seniors will be smarter than our generation and that fads like Lean and Six Sigma will die away in favor of better thinking. There is great opportunity to change management thinking and redesign the work to serve customers. The work is more interesting and the culture improves.

One student asked about an “aggressive customer” that might take advantage of the company if you do what the customer says. Those people exist, but they are the exception. The problem is that we design our systems as if they are the norm (common causes of variation), when they are not. Rules, procedures and inspection follow at great cost.

The teacher asked what is the one thing that a student should know. I replied Statistical Process Control (SPC) should be required study for any student in high school. Just the basics would be a huge differentiator.

I can only hope that an education system wraught with command and control thinking can see the way to better thinking . . . we can only hope.

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Tripp Babbitt is a columnist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

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Systems Thinking and Management

Service Design and the Story of the Ugly Duckling

October 13, 2010 Tripp Babbitt Leave a comment

A recent trip to the United Kingdom confirmed what I feared . . . the 95 Method is as potent and powerful as what W. Edwards Deming started with Japan, only this time in service. While the US outsources to “play to its strengths” I am left wondering what strengths are left in the US.

The only way the US wins is if the rest of the world continues to embrace command and control management. My visit to the UK confirmed that the US is much better than the UK with this (command and control) form of management. Witnessing the transformation of a large insurance company has been something like observing the change from the ugly duckling to a beautiful swan.

However, this UK swan stands to collect market share and competitive position in the world. The US will once again be playing catch-up in the world marketplace that has left them far behind and there will be many countries cheering as the US goes down the tubes.

Recent management fads like lean and six sigma have done little to reverse the trend. Despite the many books written and claims to success (which most have been anecdotal) service is falling behind. The purveyors of tools have nothing new for service just manufacturing thinking, black electrical tape and pictures to trade.

Meanwhile the UK swans in the private and public sector are advancing the thinking and clearing a gap as wide as the Grand Canyon. The use of a theory of work (the 95 Method) that is both adaptive and has plenty of room to grow is making the difference . . . a big difference.

So one major difference is that service has greater variety than manufacturing. But more important are the human change methods and re-design of work capabilities that are inherent to the 95 Method. It is smart, efficient and effective.

Sure, I am biased, but as a reformed Lean Six Sigma Master Black Belt and former president of a Deming user’s group . . . I have seen a lot of the recent fads and their inability to change thinking or redesign service. In fact, they feed the management system of command and control as it stays in place and is reinforced. You have a choice where the duckling didn’t.

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Tripp Babbitt is a columnist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

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Systems Thinking and Education

The Disappointment of the Education Approaches

October 9, 2010 Tripp Babbitt Leave a comment

I’m a little behind on my Meet The Pressviewing, but caught up with the September 26th education piece this morning featuring Arne Duncan (US Education Secretary), Michele Rhee (DC school Chancellor), Randi Weingarten (AFT) and Robert Bobb (from the Detroit school system). The interview was disappointing.

Arne Duncan did rightly point out that in the last generation we have fallen behind other nations. What he didn’t mention is that this coincides with the beginning of the US Department of Education under President Jimmy Carter. All our focus to form a Department to help educate our children has failed . . . and we are paying billions for the priviledge with poor results. A grand proposal would be to shut down the US Department of Education and close the deficit AND learning gap.

Michele Rhee heralded as superwoman in some circles to me represents those that do the wrong thing, righter. Her ploy to fire hundreds of teachers to fix the system has to be the biggest sign of ignorance since . . . well . . . the idea to form the US Department of Education.

W. Edwards Deming would be disappointed in her firing the people in the system where he showed that the performance of any organization is 95% attributable to the system and only 5% the individual. And in education we need people that understand this, not more “how do we seek out the bad individual” thinking that represents the 5%.

The people that can help fix any system are those in the work, in this case teachers. But our education leaders are focused on making sure they can force their will upon teachers and that the only way to change the system is through coercion . . . command and control style. The floggings will continue until morale improves.

The latest attempts to evaluate teachers on who to flog stands to waste billions more of our tax dollars. This will be McCarthyism in education. Those that don’t comply will be said to be hiding the ineffective teachers and public castigation will follow.

When will we realize that the teachers need to be part of the solution? Instead of finding ways to do something to them, we should be enlisting their help. They are the only ones that truly understand the problems with education. Quit firing those that do the work and start paring down all those that direct the work or shuffle and make reports about the work. Fire an administrator or their support staff and hire a teacher instead.

I have been accused of being a teacher . . . I am not, and never have been in a classroom to teach children.

As a systems thinker I understand how the design of systems is so poor that a good person in a bad system will lose every time. The ones with answers to our education design problem are those that do the work. We need them to help redesign this system, not new ways to evaluate them.

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Tripp Babbitt is a columnist (Quality Digest and IQPC), speaker, and consultant to private and public service industry.

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Tripp Babbitt’s Blog

Monthly Archives: October 2010

Why Beginning with Standard Work Destroys Service

Shared Services in Government – Increased Costs Hidden from View

Service – Finding the Time to Improve

The Education Witch Hunt Continues in NYC

The State of Indiana – Waste Begets Waste in the Human Services Agency

The Problem with the VA Study: Surgery Checklists Saving Lives

The Management Brain Enema: If You Want Change, Change Your Mind

Questions at a High School about Systems Thinking

Service Design and the Story of the Ugly Duckling

The Disappointment of the Education Approaches

The 95 Method