The No Tool Zone

Worse than the outbreak of H1N1, Target  Obsession Disorder (TOD) has been around a lot longer.  There really is no cure for this disease, save one . . . stop doing it.  The sad part is most don’t recognize TOD as a disease.

Where did it begin.  In a public company probably the boardroom.  In a private company or public sector it began with the budget, filtering down the numbers by function (sales, operations, etc) and then monitoring the numbers in executive or functional meetings with performance against plan.  Riches for those that make the numbers or unwanted attention (or worse) to those that don’t.

So, managers and workers alike are given targets and the discussion at most companies surrounds “making their numbers.”  “Hey, Tony . . . what’s it gonna take this year to make the numbers?”  Tony (in response) “cheat, well not cheating we will just manipulate the numbers. You know, early revenue recognition, shift some costs around, RIF . . . we’ll hit those numbers.  And if I don’t, i have a list of excuses of why I couldn’t.”  Is this really managing?

All this ingenuity to hit a target can be repurposed to understanding the work as it is delivered from and to the customer.  Finding better ways to make the work work reaps enormous gains for service companies not preoccupied with targets.

For service organizations wallowing in the mediocrity of Target Obsession Disorder and the control it brings.  There is a cure that will result in business improvement and business cost reduction.  It is to realize greater control and cost reduction can be achieved through flow than targets, function or activity.

Leave me a comment. . . share your opinion!  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 info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

One thing you can plan on is when a bad idea catches fire, it is hard to stop.  Outsourcing vendors, public sector consultants, private sector consultants, cost accountants, CPAs, MBAs, CEOs, CFOs, etc. etc. all want to reduce transaction costs.

 I am yet to see any company when we really look at the financials and other customer data gain business cost reduction by focusing on reducing  transaction costs. Total costs always rise . . . eventually.  Why, public sector and private service organizations don’t understand that cost are in the flow not the (transactions) activity.

The counter intuitive truth and management paradox is that focusing on costs always increases them.  My other posts have shown why standardization, scripts and best practices don’t allow the absorption of variety that customers give service organizations.  The number of transaction increases in the form of failure demand (demand caused by the failure to do something or do something right for the customer) increases and the system works against itself to increase costs.

So ill-advised managers march off to lower transaction costs by using outsourcing, shared services, reduced service levels, etc. so they can avoid increasing transaction costs and all these decisions lead to more transactions and more costs.  They are missing the great lever for improvement.

The great lever for improvement is flow.  Flow is improved by designing our service systems against customer demand, end-to-end from their perspective.  When customers get what they want, costs fall because the flow satisfies customer demand.  The counter-intuitive truth here is that when good service from well-designed work happens, costs fall.

The management paradox is that the design of work in almost every service organization inhibits the flow and the measures have nothing to to with customer demands, end-to-end from their perspective.  The opportunity to improve is huge, not 5-10%, but 40-80% or more.  The only question now is are you ready to deal with it?

Leave me a comment. . . share your opinion!  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 info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

                                                                                                                                    
Zappos, Apple and Disney . . . some names often mentioned for the great customer experience offered.  I am not here to debate whether they are or not.  The issue is YOUR service organization should NOT copy any company, process, technology, best practice or anything from another company any time.  That means never.

Salespeople will tell you about the standard option or what is hot.  Technology salespeople are wizards at this and will say things like “it is best practice” and “everybody uses it this way in the industry.”

You see the problem is what works for another company won’t necessarily work for your organization.  Systems thinking tells us that each organization is unique by structure, culture, management thinking, work design, etc. and copying another organization without understanding the differences is to create waste and sub-optimization.  

While doing bank management consulting I saw banks copying other banks all the time.  The front office, middle office and back office design was copied over and over again.  The design in most cases was faulty and they had to have the added expense of buying technology to move things from front to back office making their technology costs sky rocket and their service get worse.

A company that has success, usually has success because of its unique abilities.  Copying another organization just makes you a “wannabe.”  It is not very original to tell your customers we are just like Zappos, Apple or Disney.  In the words of Genie (from Aladdin) . . . “Be yourself.”

Leave me a comment. . . share your feedback!  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 info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

I have posted many times on this subject, yet as companies find ways to “save money” they turn to technology that increase costs, makes customers shake their heads and take actions that make companies more unprofitable and less competitive.  Really, enough with the snake-oil and one of the worse technologies ever invented . . . the IVR.

But everybody has one (whining).  Sorry, time to fess up, pay the piper and get real.  Customers hated them when they first came out and hate them today.

A better customer management process does not have to include the IVR system.  I know everyone has one, but really.  You don’t need one and it does not save you money.  It is nothing more than a poor sorting process in the best cases and chases away customers in the worst cases.

Contact center executives continue to believe  that that separating the calls to specialists is a good idea so that customers get the right answers, but getting to that specialist is a journey through hell for the customer. IVRs (as with all technology) has to standardize things in the menu options.  What is not realized is that customers may have a variety of problems and I have to talk to several different specialists as a customer.  This is wasteful for both customer and service organization.

I have a better solution.  Service organizations should study customer demand and purpose from the customer perspective.  Derive customer measures from this purpose and redesign the system to accommodate variety of demand offered by customers.  While you are doing this at least offer the customer an option to talk to a human.  Humans a better able to absorb variety offered in service.

Redesigning against customer demand will help achieve business cost reduction and business improvement.  The management paradox here is that as service improves, costs will fall.  Happy customers are less expensive to take care of and when you do take care of them they will come back for more.

Leave me a comment. . . What’s your opinion?!  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 info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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 info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

Don’t get me wrong, I visit “the House the Mouse built” at least once every year.  This time of year I attend the Food and Wine Festival at EPCOT (Experimental Prototype Community of Tomorrow) as it coincides with my wedding anniversary.  I make my reservations through the Disney World Central Reservations line.

This time however I got a bit of a surprise.  The IVR system is voice activated now and combines reservations for Walt Disney World and Disneyland.  In addition, the IVR asks “why you are calling?”  When I responded “reservations inquiry” (as I wanted to inquiry about resort reservations) the system said “Oh, Dining Reservations” and proceeded  down the wrong track.  Some will say I am at fault for not being explicit, but who is the customer here?  Apparently, I have to adjust to their system.

So, I call back adjusting my response to fit their system.

Me:  Resort reservation inquiry

IVR:  OK, Resort reservations (not really what I wanted as we’ll see later) What would you like to do? Would you like a new, modify, . . . or ask a question?

Me: Ask a question.

IVR:  Are you calling about a Disney Vacation package?

Me:  No (wasn’t sure how to answer this, I was afraid of the response “maybe”).

IVR:  Does your party have 8 or more people?

Me:  No.

Have you been to Walt Disney World before?

Me:  Yes.

IVR:  Have you visited at least once since 2004?

Me:  Yes.

IVR:  Have you visited 5 or more times in your lifetime?

Me:  Yes.

IVR: OK, please enter your resort reservation number.

Me (to myself):  Oops haven’t deciphered the new system yet, resort reservation inquiry = existing reservation . . . hang-up.

When I eventually reach an agent on the phone, they want more information about me and my family.  This must be CRM at work . . . you know, more intrusive.  I am not sure I got the “specialist” I was promised, but I eventually got the information I needed . . . about 60 minutes later.

More entrapping technology that adds no value to the customer, way too many branches. And a perceived 5 – 10 minute phone conversation turns into almost an hour with two call backs.  This IVR system neither saves money or improves service. 

• How many misroute themselves? 
• How many people would give up after the first 2 calls? 

Unknown and unknowable, but the cost accountants think putting off customer demand or self-routing saves money.

I have better, systems thinking call center management and IVR solutions.  These are counter-intuitive, but would save Disney (and any other service organization) huge sums of money.   The steps are:

1.  Understand customer demand and the variety posed by customers.
2.  Get measures associated with these demands.
3.  Design against demand.

In many cases, we find no need for an IVR system . . . a management paradox.  Also (a free-be for Disney), combining Disney World and Disney land call center calls doesn’t necessarily decrease costs and in most cases, increases them.  This step-by-step method will help lower costs profoundly and increase customer satisfaction.

Share your experiences with IVRs and call centers.  Comment below.www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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

Have you ever called customer service and wondered why it took so long to get an answer?  Most people blame the representative that they are talking to at the other end of the line.  “Stupid people, they just don’t train them very well” or “This company must hire the dumbest people” is usually the conclusion.

What if I were to tell you . . . it is not the representative’s fault?  Indulge me for a moment.

Some time ago, I came across the term “economies of flow” when reading John Seddon’s Freedom from Command and Control.  He was describing the important work of Taiichi Ohno in manufacturing.  For those not familiar, Taiichi Ohno is one that uncovered some counter-intuitive truths at Toyota. 

In order to compete in the automotive industry, Mr. Ohno had a problem.  He didn’t have the same number of press machines that the Americans had . . .  in fact, he had only one machine.  This wasn’t the only problem Mr. Ohno had, the other problem was the variety of demand in styles and options in automobiles.  In those days, to handle the variety, Ohno was faced with change-overs to different styles and options of about 10 days. 

Out of necessity (one machine), he worked to reduce waste in the changeover process reducing the time to 10 minutes.  A counter-intuitive moment occurred . . . smaller batch sizes actually reduced costs, because problems were caught earlier with smaller batches and less inventory was required.  He had reduced the time between the order and completion of the product.

In service, John Seddon discovered that variety was even greater.  He realized that the ability to handle variety was key to improving service and reducing costs.  Further, what he discovered was that “people are good at handling variety and computers are not.”  This meant that in service the need for fewer computer applications and systems (in a management paradox) leads to more control and ability to absorb variety with people – reducing costs AND improving service.

I know what you are thinking . . . NO WAY! Everyone is investing in technology to reduce costs and improve service.  BPM, IVR and a host of other existing and emerging technologies are being sold as the panacea or cure-all for the next service problem. What we have found is that computer systems (for the most part) prevent the absorption in the variety of demand.  Partly because of the things that precede IT applications like best practices, scripts, written procedures, etc. that wind up entrapping the service worker and not allowing them to handle the variety offered.

Does this mean the end of IT?  No, it doesn’t mean the end of IT.  IT needs to be moved back to the supporting role it once had, up until IT vendors started selling solutions with out understanding the problem . . . and the problem is variety of demand.  The work and the people who understand the work need to “pull” technology as needed to enable the work that needs to be done.  Something all service organizations need to improve to achieve business cost reductions that last.

What we have is an important business cost reduction method that if leveraged will bring about a change in thinking that can start an organization down a path to reducing expenses and improving service by the ability to absorb variety.

Where does my organization start?  How can I quantify the inability to absorb variety? When a service organization (private or public sector) can not absorb variety the fallout includes (but not limited to) failure demand.  Failure demand comes from the failure to do something or do something right for a customer.  Things like missing an appointment, chasing progress on an order, etc.  I have found this number ranges between 25% and 75% of all contacts from a customer for service organizations.  This is an exercise that will bring service organizations to the doorstep of business improvement.

Does your service have failure demand?  Let me know what you find.

Leave me a comment. . . share your opinion!  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 info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

OK, Labor Day and I’m looking for a picture of istock.com that depicts the cooperation between workers and management . . . none found.  Maybe I shouldn’t be surprised by the absence of such a picture.  The management and the work have been separated for far too long . . . one of the reasons we have too many chiefs and not enough indians.  You can either be counted as a manager that does something (command, control, edicts, policies, rules, etc.) to someone or be the someone and most people don’t like to be the someone.  Because the someone gets coaching, appraisals, targets, carrots, sticks and when things really get bad blamed or reduced.  If that isn’t enough, management gives the someone tools and technology that make the work harder.  By the way, I am not talking about your company . . . I’m talking about the other company.  Like Congress, it’s not MY representative it’s the other ones.

The problem with this in service is the culture and bad culture is expensive to maintain.  Think about if you aren’t having to inspect and monitor everything because of incentives, policies, compliance, etc., you have to inspect and monitor because of distrust.  Inspection and monitoring is expensive and adds to costs.  Firing is expensive because we have to hire another worker and train them and who knows the next someone may be worse than the someone you just had.

My modest proposal is to give the worker a better job to do.  When workers understand the purpose of the work is to serve customers and not targets and incentives, new measures emerge and these measures are relevant to the customer.  A far cry from the traditional measures given to them top-down with targets and incentives.  New measures and understanding of purpose give way to liberating method where the work becomes more interesting (as opposed to the prescribed method of telling what to do) and innovation follows.  This method leads to business improvement and  cost reductions (structure costs less to support) accompanied by improved culture.  Then maybe . . . just maybe we can find a picture of management and worker happily together at istock.com.

Leave me a comment. . . share your opinion!  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 info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

One often hears that quality begins in the boardroom.  This implies that (1) the boardroom and the people in it actually understand the work being done between the customer and their organization and (2) that the boardroom actually understands how to run the organization as a system.  Those are two items that would be a stretch for any service organization, but are needed to achieve business improvement.

So, here is a suggestion.  Those looking for a better leadership strategy may want to consider designing against customer demand.  An approach that requires the organization to look and understand current performance from the outside-in and not top-down.  This would require executive and front-line worker understanding current performance by performing a “check” of the system.  What are the types of demand received? Are these demands of value (things customers want to give and get from your organization)? Or are they failure demands (demand caused by a failure to do something or do something correctly)?  We can refer to this as getting knowledge about the organization and more specifically customer demand.  My company has found that you will find somewhere between 25 – 75% failure demand in service organizations.  Most organizations can not tell me this number and yet project plans, technology buys, organizational changes, etc. are done without knowledge. 

This leads us to Willy Sutton (the original Slick Willy) the depression era bank robber when asked “Why do you rob banks?”  His response, “because that is where the money is”  . . . and no this is not an advertisement for Activity-Based Costing.  An organization needs to go to where the knowledge can be gained . . . no, not a report or an anecdotal witness to activities . . . but where the customers are.  Where are they?  At the transaction points of your business, for service organizations that is (but not limited to) the call center.  Customers calling in every day with their demands, some value and some failure. 

Getting knowledge leads to an understanding of purpose and better measures that constitute the customer perspective and not the department or function perspective.  Customers don’t care that the other department was responsible for their problem, they see things differently than the function-by-function separation of work that we have built into our service systems.  We have become functional specialists by design and unable to serve the end-to-end demands of customers. 

Better designs for customer demands almost become self-evident once we gain knowledge about the nature of demand.  This allows a better customer management process to be achieved.  Because designing the organization from knowledge of customer demand helps us make the right choices regarding what will create value for the customer with regards to technology, policies, work design, structure, procedures, etc.  Otherwise, it is just a shot in the dark hoping to hit something.

Call centers can aid in this process by getting knowledge about customers by understanding the type and frequency of demand and whether it is – value or failure.  It’s taking leadership in understanding customer demand by performing “check” (or getting knowledge).  This is a value add to customers, executives and your organization.

ave me a comment. . . share your opinion!  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 info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.