The No Tool Zone

Pestilence, War, Famine and Death . . . the four horsemen of the apocalypse.  Benchmarking, Outsourcing, Shared Services and Command and Control Thinking are the four horsemen of the business apocalypse.

Let’s begin with a brief overview of benchmarking (pestilence).  This is comparing one organization against another.  This violates a fundamental premise of systems thinking . . . that systems are the same, they are not.  Foolishly, organizations compare costs and performance against competitors or other “similar” organizations.  This usually leads to copying when systems (organizations) are designed differently by customers, technology, work design, policies, management, workers, etc.  W. Edwards Deming first warned us that “copying invites disaster” because of the difference of systems.  Also, benchmarking can be limiting by using a standard, why can’t we shoot for something better?  Like perfection, continually improving our products and services.  For more reasons please read “Benchmarking: What is it Good For?” from this link.

Outsourcing (war) has its own systems thinking problems.  Other than the pure cost, the most blatant is the outsourcing of waste (call centers).  Service organizations consistently outsource their failure demand (problem calls, follow-up calls, etc.) to other locations and countries.  Not to much of a concern other than the fact this number represents between 25% and 75% of all call center contacts.  The outsourcing separates the people that need to work together as a system to fix the problem.  Please read Think First: Call Center Outsourcing and/or 3 Things to Consider before Outsourcing.

A shared services strategy (famine) has become a favorite of both the public and private sectors.  The assumption is combining call centers, HR, finance departments, etc. will save costs when we find it usually increases them.  Service organizations become so enamored with the savings they forget the system, pushing things together like two puzzle pieces that don’t fit.  All the while after the “savings” from economies of scale and forgetting that costs are driven from economies of flow.  The information technology that enables shared services actually entraps the waste created by it.  Please read more Failure through Shared Services and/or Government Shared Services- A Recipe for Disaster.

Finally, we have command and control thinking (death).  The horseman that has been slowly deteriorating our economics since a better way was discovered by Deming, Ohno and Seddon.  This thinking involves the use of scientific management theory born from Frederick Taylor in the late 1800s a breakthrough in its time . . . now a Dodo bird.  Except the Dodo bird is extinct and command and control thinking lives on.  For more please read Command and Control Assumptions Challenged and/or 5 Fundamental Thinking Problems in the Service Sector.

The four horsemen of the apocalypse are upon us . . . economically speaking.  They promise lower costs for numbers that we can see on financials, but not the ones that matter . . . total costs.  There is a better way . . . systems thinking provides improved service and lower costs with better thinking. 

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control thinking and the termination of bad service through application of new thinking . . . systems thinking.  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.

Command and control thinking has to manifest itself somewhere and no where is it more prevalent than the call center.  The call center has the worse set-up.  Let’s look at the typical call center:

• Productivity charts for team, unit and individual performance (complete with targets)
• Display monitors with number of calls in the queue (and other worthless information)
• Coaching sessions for those that don’t “hit the numbers”
• 4-6 weeks of training on phone calls one will never get

You get the idea.  I have the greatest empathy for folks who work in the call center environment.  I have heard them be called “lazy, stupid, unmotivated” and the like.  But inevitably (as always) those call center workers are the most savvy, innovative and knowledgeable workers in any organization.  Unfortunately, they are rarely tapped as sources of knowledge.  Worse, they sometimes put that savvy and innovation to cheat the system at the expense of the customer.  Command and control thinkers this means that we need more inspection and monitoring (at great cost), but these call center workers are always one step ahead and the game with its accompanying waste continues and escalates. 

Call center management is playing an expensive and losing game when taking a command and control approach.  The call center worker is a tremendous source of information for any organization and if they realized this they would rarely outsource.  Workers can help tell us what is broken with the system and changes in demand from customers, but call center management must be willing to dump the productivity mindset. 

Productivity measures (and targets that accompany them) like call volumes and handling time may be useful for resource planning, but tell us nothing about how to optimize the system.  Yet, the call center is rife with information to improve any organization.  If we engage the worker to study customer demand (type and frequency)  they can share information management could never have thought of unless they spent time there (which I suggest).  Workers can also help call center management with whether that demand is a value (calls we want) or failure demand (problems, follow-ups, etc.)  My Vanguard partners and I have found that failure demand runs from 25 – 75% of all call center calls.  Instead of pounding the desk for faster handling time, we can reduce the number of inbound calls by reducing failure demand and learning better ways to handle value demand. 

The call center worker is engaged to get the information and can tell us if demand changes more capably than some report a manager gets way too late.  This information provides crucial information to managers to fix the service system or product and maintains a perpetual feedback loop changing culture, achieving business improvement and corporate cost reduction.  All for changing the way we think.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control thinking and the termination of bad service through application of new thinking . . . systems thinking.  Download free 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.

In an earlier article, I wrote about SPC and its importance to making good decisions when using data.  There is much more to the story (even beyond this blog).  One item to write about involves the use of operational definitions and how data is manipulated.

During a bank management consulting contract (technology) I was tasked with coming up with SLAs (see SLA=Stupid Limiting Agreements).  I was asked to come up with operational definitions that would allow the vendor to “meet the SLA.”  That means we wouldn’t count certain types of downtime when we were considering uptime of a system.  Some were reasonable from the vendor perspective, but we really didn’t know the impact on the end banking customer risking sub-optimization or worse service to the bank.

I see intended and unintended types of manipulation with data all the time. People cheating or changing the operational definition to hit their financial or performance goal, not realizing the impact or realizing the impact on the system that is trying to be optimized.  I’ve pointed out the root cause of this manipulation coming from these types of financial and performance targets.  I also see where people using data change operational definitions (unwittingly) and then draw poor conclusions from two different sets of data.  If you change the operational defintion you change the measure.

This doesn’t mean that operational definitions won’t change over time, we just need to be able to know that comparisons can not be made between data with different definitions.  In the Vanguard method (my preferred method), customer metrics are defined in customer terms, but require some consistency in the measure.  This does not mean perfect as all data are flawed to some degree, but consistent measures worthy of comparison.

Coming up with worthy data requires meticulous study of customer demand and what is important to the customer.  The operational definitions help ensure the SPC data and decisions based on these data are valid.  Be sure that your quality change management program accounts for the practical use of data for the front-line, managers and executives, it will allow your service organization to ask better questions and make better decisions.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control thinking and the termination of bad service through application of new thinking . . . systems thinking.  Download free 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.

I read a lot about toxic workers in service organizations.  How to manage them, analyze them, fire them, etc., but I don’t read much about the toxic systems that they have to work in.  These are the organizations full of command and control thinkers.  The ones that believe in:

• separate decision making from the work
• scientific management theory
• performance appraisals
• targets, rewards and incentives
• productivity goals

These are all things I have talked about before and the damage they can do.  The 95/5 Rule is a good catch-up blog.

What astonishes me is how few (if any) address the fundamental issues that create the toxic culture.  Most people that join an organization have a positive outlook hoping that this organization will be better than the last organization they just left.  Within a few weeks or months they are beaten down like the rest of them.  They can’t make decisions about their own work, they can’t help the customer if it gets in the way of targets, incentives, goals, etc. and if they disagree with the boss or the way something is done they can’t speak out or it will come up at their next performance appraisal.  I get fired up just thinking about it.  The sad part is that command and control thinking creates the toxic culture.

There is a better way and it does not involve coaching or psychoanalysis of the individual.  Here we go:

• Put decision-making back with the work.  People will come to work with their brains and engage, instead of checking them at the door.  Innovation and collaboration will result.
•  Use measures that matter to the customer.  Not the internal measures that the customer doesn’t care about, the ones that really matter to the customer and purpose.  Workers can use these brains you just released to innovate and provide better service . . . at a lower cost.
• Get rid of all that other productivity and performance appraisal crap that focuses on the individual. How much time is eaten away from your managers to evaluate “performance” when they could be working to improve the system that decides 95% of the performance of the organization anyway.  This alone will save you money and in some cases a lot of it, it’s all waste.

Systems thinking comes with a price . . . you have to change your thinking.  The command and control way of thinking has run its course.  Change management leadership means changing the way you think.  You will liberate your culture and your system.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control thinking and the termination of bad service through application of new thinking . . . systems thinking.  Download free 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.

My wife called Bank of America (used to be Countrywide) to make the last payment on our home and needed the payoff amount and arrange to be sure the correct payment was submitted (timing).  She was taken through an IVR (Interactive Voice Response) system that asked general questions:

• Are you an existing customer?
• Account Number (and annoyingly repeated by the voice)
• Last 4 digits of Social Security# (she put in hers and they had mine even though the mortgage was in both our names)
• Description of Issue (she explained the issue as best she could to the IVR system and it kept trying to give her options that did not fit the request)
   

She then requested to speak to a representative and the IVR told her it would take longer and that it was best suited to answer her question.  Can you imagine a machine telling you how to handle your problem with its standardized responses!

She insisted on a representative and was put through after a less than 2 minute wait.  Where she had to give out the same information to the “human” that she just gave to the IVR.  In another 2 minutes, the issue was resolved by the service rep.  Total time 15 minutes, 11 with the IVR, 2 minutes on hold and 2 minutes with the service representative.

Command and control thinkers only focus on costs, thinking somehow this system is saving them money.  No option out to speak to a service representative without arguing with a machine is simply . . . stupid.  The costs are “unknown and unknowable” as Dr. Deming would say.  However, they are there all the same.

A better customer management process would be to study demand before implementing an IVR and understanding that a customer doesn’t want to listen to an IVR for 11 minutes or  . . . argue with it.  They would understand that call center management could reduce calls by understanding and eliminating failure demand (problems, follow-ups, etc.) that represents between 40 and 75% of the call volume.

Bank of America, you inherited this system . . . now tear down that IVR!

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free 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.

Recently, the AT&T guy stopped by my house to inform me that “the new fiber-optic cable had been installed in out neighborhood.”  Of course he was trolling for business.  I hadn’t updated my phone plan in a while so I decided to see the latest plans.  By the time we had ended I had an upgraded internet connection, free long-distance from my land lines and signed my cable from Comcast to U-verse.  Oh and by the way, I saved myself a few bucks.  It was a ridiculous process that took the poor AT&T guy over 2 hours to complete the paperwork, phone calls and whatever else he was doing on the phone while I blogged and ate dinner while he sat on my porch.  That is probably a whole separate blog that I will complete after my service is installed, gotten the first bill and have settled into what is a bout to really happen to me.

The part that got my attention was the survey that I was shown as a precursor to a phone call (I’d be getting) about the service I had received during his visit.  I had seen this little “trick” at Hilton Hotels and other Fortune 500 companies.  Here is how this goes: He shows you a copy of the survey and you rank the service from 1 to 5 (1= very dissatisfied to 5= very satisfied) and instructs me that his pay is based on what you give him and anything less than a 5 = Failure.  How in the world are you going to learn anything of value with this survey approach?  If my service was bad, it wouldn’t likely be from his individual performance as those that read my blogs know 95% of performance is attributable to the system, not the individual.

Further, I am not ready to judge the service by the visit.  I will judge the whole service not each individual part.  I want to know how AT&T performs with regards to the 4-6 hour installation I am going to have, the first billing understanding and accuracy, the quality of the equipment they are leaving me, how well I understand how to use everything to get my work and play accomplished, etc.  To the customer, they see the whole service not just the parts.  If one part fails . . . the system fails (meaning all individual parts). 

Do you hear that AIG?  If one part loses a $100 billion and other part makes $10 billion, you are a part of that system that lost $100 billion and you should receive no bonus.

AT&T is a command and control system that has a customer management process based on scientific management theory.  The sales department can walk with their head held high if I give my AT&T sales guy a “5″ across the board for a service that is not completed in the customers mind.  AT&T obviously doesn’t get it, which makes me concerned about the rest of the service, but great blogging material.

The systems thinking organization seeks out issues to fix and not manipulated surveys to broadcast their World Class service (that isn’t) or meet a bonus target.  They are focused on what matters to the customer and gather metrics relevant to the customer.  In service, they understand that each customer is different and has different demands that don’t fit into a “standardized process.”  They understand that value is determined by the customer and lower costs and better service result from this thinking.

AT&T you are not the only one guilty of this . . . but thanks for the example.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free 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.

My enemy is command and control thinking so why is entropy my friend?  Well, it is because entropy says that things left alone will deteriorate.  Command and control is all about “maintenance” and protecting.  These folks love to hide behind contracts, manipulated surveys and data, lots of inspection, attorneys, bean counters, reports and other non-value-added activities that add costs and waste.  The problem is with their focus on adding waste the value work is deteriorating.  Sometimes this is a trickle and sometimes this is a flood.  If you are not improving the system you are deteriorating.

The systems thinking organization understands entropy and that customer demands shift.  Management sets up the front-line workers to work with them to help understand this changing demand as it happens instead of trying to figure it out on a report.  Innovation leadership means having a close ear to changes in customer demand and what creates value.

So thank you entropy you can make changing thinking much easier by what you do naturally.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control thinking and the termination of bad service through application of new thinking . . . systems thinking.  Download free 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.

I overheard a fellow say “I’ve got Deming’s principles down pat, now all I have to do is understand this variation thing.”  Hmmm, Dr. Deming was a statistician and his philosophy did come from his understanding of variation as taught to him at the Western Electric plant (Chicago, IL) in the late 1920s from Dr. Walter Shewhart.  What W. Edwards Deming learned was how to evaluate data using a statistical process control (SPC) chart.  To me, the difference between knowledge and tampering or guessing.

Early in my career I was a corporate director of operations where I learned to evaluate income statements and compare last months revenue, expenses, etc. to this months and all types of dictates and commands came from this naive view of data.

After attending Dr. Deming’s 4-day seminar and learning from the likes of Dr. Don Wheeler and Dr. “Frony” Ward, I learned a better way to manage with data.  In statistical terms understanding the differences between common and special causes of variation.  Let’s pretend we have sales of 15, 19, 14, 16, 12, 17, 15, 17 and 11 (in thousands).  A manager might conclude that the month with 19,000 in sales is a celebratory moment best month on record and the last month with 11,000 is reason to “bark” at the salespeople for poor sales. 

By plotting data using the SPC chart (below), we can tell that we can expect anywhere from 5.1 (LCL-Lower Control Limit) to 25.1 (UPL-Upper Control Limit) with an average of 15.1.  A manager celebrating 19,000 or getting upset over 11,000 is foolishness.  In a matter of fact, we can expect between 5,100 and 25,100 (the control limits) in sales and it wouldn’t be unusual.  This is called common cause variation.

Conversely, if the next month showed 28,000 in sales (see chart below) this would be outside the UCL (Upper Control Limit).  The $28,000 month is unusual (outside the limits) meaning we have a special cause.  Something unusual has happened.  Now is the time to investigate the reason there is overwhelming evidence that we should investigate the “special cause.”  There are other indicators of special causes (run of 8 and others) that need to be accounted for, but this is a blog.

Not understanding the differences between common and special causes leads a manager to tamper with the system.  Dr. Deming outlined two types of mistakes:

1. Reacting to an outcome as if it came from a special cause, when it came from common causes of variation.
2. To treat an outcome as if it came from common causes of variation, when it was from a special cause.

A systems thinking organization (or any other organization) must understand the differences between special and common causes of variation in order to manage effectively.  Leadership development, organization change management programs and even technology implemented devoid of these basics are keeping service organizations from making better decisions.  This isn’t just for Lean Six Sigma Black Belts and Master Black Belts, we all use data.  We must know how to use this data to make better decisions and avoiding the mistakes Dr. Deming warned us about.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free “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.