Bryce Harrison

I just finished an ezine management article about American arrogance and our collective inability to change thinking, especially management thinking.   My belief is that we are still basking in the sun of our tremendous wealth that was produced between 1950-1968.  All until the Japanese came along and ate our collective lunches.  Bye! Bye! Manufacturing! But that’s OK we have service right?

Service industry with a huge competitive advantage in technology.  Oops! We outsource software development and hardware manufacturing.  After all, good management means a good IT outsourcing strategy to other countries.

Good call center management means that we lower transaction costs to add to that bottom line.  What fool wouldn’t want bigger short-term profits to hit that quarterly dividend target or bonus? 

Unfortunately, just like the Mesabi Iron Range . . . the cream is gone.  Our management style no longer achieves innovation leadership.  Instead we follow in the wake of our short-term thinking.  All the while thinking how great US management is.  Except for the awakening that we have fallen behind because we mistook good fortune for good management.

Leave me a comment. . . what do you think?!  Click on comments below.

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.  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 or LinkedIn at www.linkedin.com/in/trippbabbitt.

1. You must be curious.  If you are trying to rationalize systems thinking against other disciplines like lean six sigma you are off on the wrong foot.  As a "reformed" lean six sigma master black belt, I can tell you this journey will be like nothing you have gone through before.
2. Read the books.  Systems Thinking in the Public Sector for government and Freedom from Command and Control for the public sector.  These will help in understanding what is involved with practical examples.
3. Read the Fit for the Future series.  This is a series of six management articles to help an individual understand systems thinking and takes you through (step-by-step) some of the general elements.
4. Download and read Understanding Your Organization as a System.  This is for the diehard lots of information on how to look at an organization and more importantly it is a free resource.
5. Other downloads.  There are other downloads currently available from Rain University.  Using Measures for Performance Improvement, Transforming Call Center Operations, Process Mapping and Analysis, and Managing by Walking Around are all available for purchase.

Too often I have seen folks try to fit Deming into their own paradigm rather than realizing he was on a whole different plane of thinking.  We are guilty of making Deming what we wanted him to be, instead of who he was.  Hopefully, this will encourage people to read Out of the Crisis and The New Economics. 

I first went to one of Dr. Deming’s four-day seminars back in 1987 and saw him him many times there after.  The problem with this is I (like many Deming supporters) got more enthralled by the man, rather than the thinking.  This made it easy to make him be what fit our existing paradigm where he really wanted to change our mindset.

History has shown that the "sticky" issues have long been ignored.  We still automate or overuse technology whether we need to or not.  Many organizations are still using MBO.  Merit pay and ranking people are still in place to "motivate" people.  We still try to overcome systemic business problems by best efforts and zero defects.  The thinking never changed.

I have written many management articles and blogs regarding systems thinking where hopefully I am addressing more of the thinking than the man without ignoring Dr. Deming’s tremendous contributions. Like his System of Profound Knowledge (from The New Economics): appreciation for a system, theory of variation, theory of knowledge and psychology.  They all teach us a different way to think and in a management paradox to the way management currently thinks.

This is my 100th blog. I am hopeful that we can begin to address the fundamental thinking problem that stands in the way of a majority of organizations.  The conventional wisdom of command and control thinking has all the momentum. But to quote Socrates: "You can’t find the truth by counting heads" and so our search for profound knowledge continues.

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.  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.
 

I have often been accused of my lack of "common sense."  Which makes me proud of my "uncommon sense."  So let’s take a look at what types of things are "common sense" in the world of the command and control thinking service organization:

• Ranking workers, units, teams and departments
• "Carrots and Sticks" for workers
• Quotas, targets and arbitrary numerical goals
• Performance appraisal of the worker,manager and executive
• When service fails . . . take action
• Rewards, incentives and bonuses for salespeople, workers and managers
• Using lean manufacturing tools to improve service
• Standardization is the place to begin service improvement efforts
• Outsourcing, technology and/or shared services reduce costs
• Economies of Scale
• Separation of the decision making from the work
• Divide the work into functions
• Use an IVR for customers to save costs
• Use reports to make decisions about the work
• Do lots of inspection to improve quality of service
• Hire the cheapest workers for the front-line
• Keep the skilled workers away from service customers
• Make decisions based on last month’s financials
• Create competition between workers, teams and departments to increase production
• Use scripts, policies, procedures, mandates to manage the workers
• Motivation of employees
• There is a trade-off between good service and costs (zero-sum game)

Are you kidding me?  Donald Trump one of the icons of American Capitalism was speaking against bonuses and incentives (listen – for the impatient folks go to about the 3:00 minute mark).  Bankers making $40 million plus while not even being very good bankers.  These are sales people manipulating the system for the rewards and incentives and who put these systems in place?  Command and control thinking is responsible for this.  Bad loans to achieve the reward or incentive.  Makes you kind of miss the old "boring" bank.

While doing bank management consulting I worked with a regional bank that was moving from the old "boring" bank to become a "bigger" bank and needed to act like a big bank.  They got rid of the old bankers because they weren’t being aggressive enough in their selling.  They needed rewards, incentives and salespeople not bankers.  Oops! they were caught up in the mortgage crisis with this knew aggressive approach.  They are still trying to dig themselves out, the problem is the management doesn’t see what is wrong with their "new" thinking (which is really old).

Most banks stayed clear of the bad loans that started this crisis and have stayed the course.  I would like to see these banks reap the benefits of "boring" banking.  Give them the TARP funds and let the knuckleheads fail.

Rewards and incentives had no small role in the current crisis.  They always get you less.  The sub-optimize the system and get people focused on defacto purposes not related to the real purpose . . . to serve their customers.  This sub-optimization is costing them in higher costs and worse service. 

The leadership development of banks need to include systems thinking as part of their organizational change management programs.  Only then, can they begin to eliminate waste and improve service.  I have several management articles associated with this and banking worth a gander, see this link.

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. 
 

I have gotten the feedback that my FREE download (Understanding Your Organization as a System) is too long (160 pages) and has way more material than be possibly consumed by one human.  I apologize for my partners (Vanguard Consulting Ltd.) that wrote the work with all the exercises and information.  They have a tendency to write on and on with disregard for command and control thinking and pointing out the problems that businesses encounter such as outdated thinking like using scientific management theory.  After all they come from the land of queuing and fly tipping.  They even go way to far talking about what to do to get started to improve your business . . . bastards!

For those of you that do better with smaller bites, I am offering links to management articles that provide the same general information on systems thinking as the download.  The Fit for the Future series is partitioned into smaller, more palatable bites (six in all).  This way you can still watch Family Guy and the Simpsons without missing a beat.  These are 15 minute reads each and for slow readers like me maybe 20 minutes.

Here are the links:

Fit for the Future – Part 1

Fit for the Future – Part 2

Fit for the Future – Part 3

Fit for the Future – Part 4

Fit for the Future – Part 5

Fit for the Future – Part 6

These management articles are pretty plain (in title) . . . after all this is the land of no ice in soft drinks and Yorkshire pudding (don’t tell them it doesn’t have any taste).
 

I am always fascinated by the actions of call center management efforts to attain cost reductions.  Bank management efforts are no exception. 

At a large customer service (call) center for a tier one (large) bank I spent time listening to some phone calls and understanding what customers hear when they reach the bank’s IVR (Interactive Voice Response) system.  I started with the IVR system and listened to all 8 options and none of the options allowed the customer to talk to a service representative. The exception was the customer who wanted to open a new account or loan.  The amount of button pushing required to get to a person by listening to their "tree of options" was mind boggling.  A person calling in with a problem had to follow a path that had no end.  I was assured by the call center manager that this was saving them money . . . huh?
 
Next, I started to listen to value calls (open account and loans), but those lines were being clogged by the customers who had problems as the customer had figured out from the IVR that the only way to talk to a person was to hit the option for opening a loan or an account.  Customers have a way of figuring things out to get what they need.  The really interesting part is that the executives were tracking the new account and loan calls and wondered why they were getting so many calls to open accounts and loans but not very many accounts or loans were being made in proportion to the calls.  The data from their reports didn’t tell them what was really happening (calls were problems not sales).
 
The executives could only look in the mirror as the source of the problem.  They put in the IVR system to "save money."  I suspect it cost them money not only for the IT but for the customers they lost.

The IVR systems have created a whole sub-culture culminating in a website to tell you how to speak to a person at major service organizations.  Check out the website www.gethuman.com.  Customers can be very creative, but why make it so hard to get value?
 
Some management articles to delve deeper into Systems Thinking and better methods for call centers.  They include: Transforming Call Center Operations, Design Against Demand, A Better Way of Motivating People, A Better Way of Thinking about Technology, Better Thinking about Demand, and Better Thinking about Managing People.