The answer many organizations have come up with for problems of efficiency is to seek standardization in their processes. But they don’t understand the problem and the potential damage of not understanding the problem ends in increased costs and worse performance.
Manufacturing has taught us that a standardized process is helpful in making products. We get predictable outputs and quality in making products. Much that has happened in service industry in recent years has been an attempt to copy this thinking.
People wrongly think that the ability to standardize work in service will help improvement like in manufacturing. Here, we get a starting point to reduce the variation and get better quality. The result is the search for “one best way,” scripts for contact centers, written procedures in operational areas, etc. in service. All of these efforts to standardize work are locked-in with entrapping technology.
These efforts seem practical until we look at the evidence.
The missing element that creates a management paradox is the variety of demand that customers place on service systems. And the evidence that this exists comes in the form of failure demand (demand caused by a failure to do something or do something right for a customer).
When our service systems are full of standardization they lack the ability to absorb the variety customers bring to service. A direct measure of this comes in the form of failure demand which we find runs between 25-75% of all demands customer. This is some of the evidence that a service organization needs to know how well or poorly a system performs in absorbing variety from customers.
This does not mean that all standardization is bad. What it does mean that it dispels the notion that all standardization is good. More importantly, it means to make an assumption that to standardize and reduce variation is good for service is a wholly wrong place to begin.
Our first task needs to be to get knowledge by understanding the what and why of current performance. Purpose of the service system, type and frequencies of demand (plus value and failure demand), how the system responds to demand, studying flow, system conditions and management thinking are part of this process.
From understanding purpose, new measures and methods present new perspective and insight. Whole new and different problems emerge when we study our organizations as systems. The result is improve service, reduced costs and better performance.
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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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I am amazed at the amount of time and effort that is wasted by organisations who dream up “business management” and “quality assurance” procedures in the hope that this will somehow magically result in better customer service. The result, of course, is that time and money is wasted – the efforts of staff could be much better spent on understanding the purpose of the service from a customer perspective. A crucial part of this understanding is variation in demand.
[…] ranted many times about how standards create failure demand in service organizations (read this post). I would recommend anyone read The Case Against ISO 9000 by John Seddon. The often quoted […]
I wonder if checklists in many cases are a more humane end effective approach than standardized work. Atul Gawande has written a fascinating book about checklists as used by everything from pilots to surgeons. There are som subtle differences between checklists and standardized work:
checklists list what you must not forget, SW lists what you must do
checklists are created together with the people that will use them, SW is most often top down.
I am going to blog about this, hopefully next week…
@James Llewellyn
Understanding the purpose of the service is noble, but without an associated action, what is the point? And, this seems to be contradictory to a few of Chandler’s Eight Propositions.
Perhaps a better understanding of customer expectations and the provider’s abilities would help to solidify the contract between provider and customer.
Understanding purpose doesn’t really add much and, by the way, understanding variation of demand is a metric and, therefore, a quality assurance procedure in it’s own right.
I have written about checklists and again it is a tool. Starting with checklists is like starting with standardized work. Studying our systems from the outside-in as a system reveals much more than checklists. We can gain understanding of customer purpose and the demands placed on the system.
Yes, I agree. Checklists are a tool. My point was that I believe checklists will often be a much more appropriate tool in services than standardized work. Checklists will in addition solve some of the same problems as proponents of standardized work claims it solves.