Advancing the Thinking in Service – Standardization, Variation and Variety

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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Make the new decade a profitable and rewarding one, start a new path here.  Download free from “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at [email protected].  Reach him on Twitter at LinkedIn at

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

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