Tag Archives: Innovation

Hostess – A Reflection of What’s Wrong with American Business

November 18, 2012 Tripp Babbitt Leave a comment

Another American icon bites the dust. Sure, we still have our auto manufacturers even if they are a shadow of their former selves. We are a divided country . . . haves and have nots, 1% and 99%, management and labor, Republicans and Democrats. The list can go on. Winners and losers, except in the case of Hostess it is clear that everyone losses.

Who didn’t grow up eating Ding-Dongs, Cupcakes and Twinkies? Not the most nutritional of snacks, but they were really good. They just never continued to get better. The product was a cash cow and I can not find one new product.

English: A Hostess CupCake, shown whole. (Photo credit: Wikipedia)

This is a management problem.

A declining market in what would be like trying to sell buggy whips in an age of cars. The cash cow, suddenly becomes a boat anchor. The ship sinks under the weight of management and labor taking advantage of past successes through pensions, increased salaries and other balance sheet and income statement busting actions. Who would get most of what is left of the wreckage? Not a question designed for a going concern.

These difficulties are exacerbated by six different leaders in the past 10 years. The last CEO being a “turnaround expert.” This, however, was a liquidation or more so a demolition.

This is a management problem.

As Americans, we have grown used to having managers going through a revolving door. Leadership needs to be stable, so they can learn. The misfits in management instead know how to manage a balance sheet and income statement but no little about growing a business or in this case how to build a Ding-Dong and not be one. For American management this is what it has come too.

Management and labor are need of working together to end the madness. The change needed is that management must first respect the worker and together work with them to improve the system. Not just to reduce costs, but to improve culture and work on innovation.

Lesson learned? We can only hope.

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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the The 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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The 95 Method and Contact Centers, The 95 Method and Government, The 95 Method and Management

Does Your System Make Workers Accountable?

August 15, 2012 Tripp Babbitt Leave a comment

I know what you are thinking . . . “my organization makes workers accountable with measures, performance reviews and inspection.” Well, we aren’t talking the same lingo.

Rarely do you find measures in service organizations that matter to customers. Usually the measures are all about reducing costs and meeting budget. Let me tell you a secret . . . customers could care less about these measures. And one counter-intuitive truth we have discovered is that measures that customers don’t care about lead to increased costs or a best a scorecard. W. Edwards Deming referenced these lagging measures as useless to improving costs and service – “it is like driving a car looking out the rear view mirror.” Customer measures lay out the road ahead.

Performance reviews make workers slaves to the system. The game is to be compliant, not innovative. It promotes a culture of brown-nosing and popularity contests, leaving most workers disenchanted. They do make people accountable – to their boss. The hierarchy is there to prevent accountability to customers, workers must bow to the next one up on the totem pole.

This thinking breeds inspection for compliance to measures that don’t matter to customers. Most in inspection and compliance roles add little or no value from a customer perspective and too often creates animosity amongst workers. Also, I find that workers are stuck in work designs that are sub-optimal and compliance means that we are perpetuating poor thinking and design.

So, what makes workers accountable?

Work that is challenging and designed to improve service is the short answer. The long answer is that a worker that can see the impact to customer has a better chance of being accountable than a functionally separated one that your piece of work if blind to the one before or after. This means that better designed work promotes accountability and it doesn’t require compliance. Most workers willingly are accountable when they embrace a work design that makes them relevant and has ties to customer needs.

The bottom line is that accountability is attributable to the design and management of work.

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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the The 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Government, Systems Thinking and Management

Innovation – It Starts with Challenging Old Assumptions

November 4, 2011 Tripp Babbitt 1 Comment

Probably better to say curiosity starts us down a different path and innovation follows, but assumptions block the path to curiosity. Grabbing or copying the first best practice or tool to make improvements ends any chance at innovation. We want to check a problem off the to-do list not have to think about what options we have to solve a problem.

I was reading Alfie Kohn’s website and remembered my Deming days. He was the first person I had met that challenged my thinking on competition and reward systems. He reinforced and furthered Dr. Deming’s argument that cooperation and not competition was that better way to go.

Deming and Kohn also made me rethink reward systems and how they drive the wrong behavior. Rewards and targets become the defacto purpose of an organization – meaning that management and worker pursuits of targets and rewards take our eyes off creating value for customers. Further, the system we work in and how well it is designed is by far the biggest influence on organizational performance.

The best way to ask people to begin is to set aside the old assumption that we have learned in childhood, experience, schools and what others have told us are true. This is why going to the work is so important rather than relying on IT-generated reports or the biggest mouth in a meeting. You can learn new truths when you do and banish myths at the same time.

This brings new and better thinking to problems. This is called innovation.

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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Government, Systems Thinking and Management

Caveat Venditor!

November 3, 2011 Tripp Babbitt Leave a comment

There is a growing trend of backlash in America and around the world. The Tea Party wants a balanced budget and less government, Occupy Wall Street wants equality in business and government and now the consumer is taking action against $5 debit card fees. We are in a new age.

Caveat Venditor!!!

“Let the seller beware” is upon us. Social media has allowed people to organize causes quickly. Be it the Arab Spring or London Summer or the recent events we have witnessed the times they are a-changing.

Organizations, governments and management need to get serious about the poor service they are providing customers because they aren’t just one-off or individual complaints anymore they are movements. This can be good news or bad news for companies.

If you are trying to maximize profit and putting it to customers – bad news. If you have horrendous service through poor customer service, IVRs, websites, etc. – bad news.

Blaming it on Washington just won’t fly anymore.

On the other hand, if you are designing good services – good news!

Here is the management paradox that organizations and governments need to get a grip on . . . good service costs less! So, quit lamenting on lost revenue and build services that meet customer purpose and satisfy demands. There will be less failure demand to deal with (lower costs), happier customers (more revenue) and discovery of new and innovative methods for new products and services.

That short-term focus on profit-thingy your reward systems will not survive this onslaught. People are perceiving it as greedy and sometimes it is. Long-term thinking with a consumer focus will win the day.

Are you ready?

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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Management

Why Do Companies do Reorganizations and Why they Fail

October 29, 2011 Tripp Babbitt 5 Comments

Organizations of all types look to reorganize. But the reasons are based in assumptions with the hope that it will lead to improvement. Less evidence exists that reorganizations actually make the business or government run better.

I have heard many reasons why companies/government do reorganizations. Here is a list of reasons – by no means comprehensive:

Recent merger or acquisition
To stay competitive
To “shake things up”
Realign the business
New strategy (or strategies)
Improve communication
Prelude to downsizing
Better decision-making
Better execution – related to strategy
Going global
Free-up creativity and innovation

Please comment if you have more to add. The assumption is that the reorganization will somehow make things better. After all, isn’t reorganization what a leader does in the first two years during the honeymoon period?

If you look at these reasons many are based in assumptions. Mergers and acquisitions are many times are decisions made based on economy of scale thinking. But scale thinking in organizations is flawed. Improvement comes from flow and not scale.

Strategies lead to plans and the flaw here is that knowledge is needed before talking about strategies or plans. Reorganizations are rarely based in fact about how a business will improve, they are full of assumptions about economy of scale, functional separation of duties, and how much an individual leader can affect change.

Knowledge is gained by actually understanding an organization as a system, not from what other organizations are doing or what is “believed” to be true. This is the reason reorganizations become such incredible failures. Even though they are often spun as being magnificent successes. If executives only knew that basing reorganizations on flawed assumptions was a mistake they could bring much to the bottom-line.

Reorganizations don’t have to be a bad thing though. However, they need to be based in evidence and fact. This is gained through understanding your organization outside-in as a system. In essence, understanding the work that creates value for customers, understanding customer purpose and then gaining knowledge about how well an organization performs against purpose.

Reorganization with knowledge of your system leads to a natural change in the roles that workers and managers do. Otherwise, it becomes an assumptive activity that leads to an expensive failure.

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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Management

The Untouchables in Management

October 26, 2011 Tripp Babbitt Leave a comment

In most organizations there are the “untouchables,” they cannot be challenged or even looked at in the wrong way. Sometimes they are “lucky sperm” that are the relative of an owner. Other times it is the “in” crowd in management. Still others are the group that were brought in by new management. Regardless, the attitude they bring to management is a “don’t cross me . . . but groveling is accepted and expected.”

Usually management types, these are people imbedded – like a low-hooking golf ball hit by a 2-iron that lands in the soft bank of a river – in the hierarchy. They run welding their power like Attila the Hun. Evidence? Reason? All out the window with these types, they are unchallengeable.

Some brown-nose and most lie because there is no repercussion as they are authority. This is the politics of fear and position.

The untouchables are a huge barrier to improving systems. They take the eye off of the customer, evidence and learning to defend position. Everything is about winning and losing . . . arguments, coercion and position win the day.

They are killing your culture and service organization.

Left unchallenged, instead of innovation you get brown-nosing and a culture of “tell me what I want to hear.” The truth is buried in a sea of proverbial BS and CYA.

There is at least one way for leaders to break up the kingdom. Executives need to focus on the work, going to the work working with front-line workers destroys the hierarchy and the “untouchables” with it.

Dismantling is easy because everyone knows what is really important when executives spend time in the work. Evidence and truth replaces lies and posturing. Culture improves because there are fewer dark places for the “untouchables” to hide . . . salt and light replaces them. Like throwing water on the Wicked Witch of the West.

Ultimately, management has many paths to choose from in how they will operate. The best path is the well lit one. The one that focuses on customer purpose, the work, evidence and method. All else 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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking Concepts

Want Service Improvement? Make No Assumption

October 21, 2011 Tripp Babbitt Leave a comment

Assumptions . . . the killer of an organization’s ability to get innovation, improve culture, delight customers, optimize systems, sustain improvement and capture the market. Management is filled with assumptions about how the work should be done. The carnage created by these assumptions can be seen increased costs and disappearing customers.

I thought I would put together a list of some top assumptions I see regularly i working with service organizations – with brief commentary:

Cutting Costs to Improve the Bottom Line – A focus on costs always increases them. Costs are reduced by improving flow, not scale.
Workers (and Customers) Can’t be Trusted – The system management put together filled with carrots and sticks leads to manipulation and cheating. Surviving a poorly designed service system is all about survival for workers and customers. Inspection, auditing and governance are poor substitutes for a good system. Further, why design our systems for the less than 1/2% that might cheat a good system.
Technology will Improve Service – IVRs and entrapping IT are the result of attempts to reduce costs (see #1). The partial or complete failure rate of IT projects is over 90%. Redesigning systems is a better and cheaper alternative.
Rewards Motivate People to Do the Right Thing – Rewards do motivate . . . to focus on the reward and not customer purpose. Rewards sub-optimize the system and create competition where cooperation is needed.
Functional Separation of Work is the Only Way to Design an Organization – No one articulates that they want functional separation, but no one challenges it either. Service organizations broken into sales, marketing, operations, finance, HR, IT and more. One size fits all in organizational design is really bizarre if you think about it.

I’ve run into scores more, but these really show up in so many organizations. If management is to improve . . . changing the design and management of work begins with erasing (not just challenging) our assumptions.

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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com. Learn more about the 95 Method for service organizations. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Tools or Systems Thinker – You Choose

May 9, 2011 Tripp Babbitt 4 Comments

I recently read an article by one of the management fad proponents that even though they used tools they were a systemic thinker. Further review and reading determined they provided no evidence of systemic thinking in the work they had done. Where is the evidence? None existed.

The use of tools offers problems I have written about before. I wrote about it in my recent Quality Digest column – Are You a Sheet or Shelf Thinker? Tools limit thinking and create a barrier to systemic and breakthrough thinking.

Systems thinking (and more specifically, the 95 Method) is about method and innovation. It addresses the management thinking that has to be challenged because of the assumptions that lead service organizations in the wrong direction. The functional separation of work, targets, financials, hierarchy, technology, information are but a small sample of items that need to be challenged.

So, part of systems thinking is about addressing not just the design, but the management of the work. Management thinking drives the design. The management fads claim to do this too, but look for the evidence . . . lots of hat, but no cattle. Pathetic and misleading.

Managers have a choice too, they can pick assumptions or knowledge. Knowledge requires context to all those management reports with meaningless data. One can only get that in the work.

Tool-focused activities support status quo in management. Most don’t know better, but many believe that someday if they see the benefit of tools management will buy-in over time. The benefit never comes in sufficient quantity to convince management and management relegates the improvement fads to lower and middle management or the front-line. A dead-end for sure.

Unless efforts to optimize systems include management . . . it is better not to start. Systems thinking includes everyone and everything, not just the elitist or tool users wreaking havoc on the systems. This is not business improvement, it is more waste and sub-optimization in the system.

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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com 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/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Systems Thinking and Management

Those Annoying Two-Year Cell Service Contracts

February 21, 2011 Tripp Babbitt Leave a comment

Image via Wikipedia

I am the guy who likes a cell phone that does what I want it to do. Getting my email, calling or receiving calls, web and the occasional game of Break-Breaker are about all I need. So the three generations ago Blackberry World Edition works perfect for me.

Recently, my track-ball stopped working and so I got a replacement, but not without some arm-wrestling with the sales guy that wanted me to “upgrade” to a BlackBerry Bold. It slices, dices and probably will crawl on its belly like a reptile, but to upgrade I have to sign that stupid collusion (yes, seems all carriers have it) contract for two-years.

OK, maybe I am missing out on a camera phone (which seems to come in handy in places like Bahrain and Wisconsin). But I am not sure I have need for 4G, which I am sure makes things faster, but why do I need faster? This may be someones need or want, not mine.

Customer service with my current carrier (Sprint) is always entertaining and rarely good. They say it has improved . . . haven’t noticed or heard particularly good things about any carrier with regards to customer service. Often Sprint sends me from a “sales center” to a “service center” when I have problems with my phone. Shouldn’t any location be a service center?

Back to the two-year contracts. I have heard all the excuses about recovering costs and planning as the need for contracts. Maybe if I got good service, I would want to stay. But when you treat me poorly, I should have the option to leave the relationship, I am the consumer.

With contracts come early termination fees (ETFs) and the Utility Consumers’ Action Network (UCAN) has website on the fees charged by carrier. It makes me wonder how much failure demand these carriers get in complaints from consumers.

It is frustrating moving from one bad carrier to another and to have to pay for the privilege is maddening. How about improving the service first and then people won’t want to leave. Obviously, these carriers take an inside-out approach which will cost them money or business. A better path would be to acquiesce to these customer demands and provide what consumer’s want , the way they want it. The first carrier that does, will win the market.

Join me for the International Deming Conference in New York City on March 21 – 22.

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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com 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/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Outsourcing, Shared Services, Systems Thinking and Technology

Why Apple Really Isn’t Cool

February 15, 2011 Tripp Babbitt 2 Comments

Recently, I was reminded of the plight of the worker as America is saddled with high unemployment. As an American icon, Apple has become what is wrong with our labor picture. The innovation giant and its success has not had the trickle down affect of labor employment. They, like so many others, have shipped their labor overseas and the accompanying lack of manufacturing job creation leaves America both less wealthy and less innovative.

Without labor to make Apple products, we are missing future opportunities to innovate from knowledge gained from making the products. Maybe antenna-gate would never have happened. Labor is an integral part of the system as the Apple Genius Bar.

Our elitist mind-set has us believing that management, lean six sigma black belts and project managers are more important than those that do the work. Labor is treated as a commodity that should be negotiated for the lowest price.

And it isn’t just traditional labor that is getting the shaft. Contact centers, software developers, HR, finance and even research scientists are being outsourced, shared and marginalized. This leaves no labor that can actually create value in the eyes of the customer in manufacturing or service.

This is a disturbing trend and the root of some of the unrest we have seen in the Middle East. When jobs aren’t available, political upheaval is in the future. The problem is . . . the future is now.

Apple for all its success is a beacon for what is wrong with America. They return high profit with cheap labor and their success has created a whole new generation of misguided thinking. The economy of scale and mass production thinking blinds them to better ways to design and manage work.

It is American management that has marginalized the worker with poor work design and thinking. Apple, as the great innovator should have long come to understand and embrace this as fact.

This creates a paradox for Apple as their biggest customers are right here in America. With all their labor outsourced, who will be able to afford their products in the future?

Join me for the International Deming Conference in New York City on March 21 – 22.

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. Read his articles at Quality Digest and his column for CustomermanagementIQ.com 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/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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