The No Tool Zone

W. Edwards Deming was the first to say that a goal without a method is useless.  John Seddon in Freedom from Command and Controlcalled goals/targets a defacto purpose that drives the wrong behavior.  Now a new Harvard Business Review (HBR) article supports this thinking.

The article by Max Bazerman is titled, When Goal Setting Goes Bad.  He points to many of the same things that both Deming and Seddon have discovered and further develops unethical behavior is organizations.

I have seen this behavior in many service organizations.  Chief among them are break-fix companies where the owner or president offers rewards and incentives for achieving sales or other goals.  Then, turn a blind eye when workers hit the goal using unscrupulous methods that compromise customer trust.

Interestingly, these same owner/executives get the advantage of being “clean” as they are almost always oblivious to such unethical behavior (or pretend to be).  To me, by designing systems this way these folks are even more guilty than the perpetrators on the front-line.  It’s like having a bad building design and then blaming the contruction worker for structural design problems. 

I found it interesting that Mr. Bazerman doesn’t have a problem with incentives, but talks about how goals drive out instrinsic motivation.  The two go hand-in-hand.  I call incentives a “faux target” (something I wrote about in The Great  False Dichotomy).

Organizations establish goals functionally, this is a design flaw to start with as it creates sub-optimization.  This is something that makes a systems thinker cringe.  Yet, command and control executives seem to think this is an optimal design.

I didn’t see much in the HBR article about what organizations should do.  A focus on method would be a good place to start.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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

Not long ago The Wall Street Journal had an article called Customer Service as a Growth Engine.  The conclusion was that customer service was going to be key for service organizations to gain market share.

US companies spend close to a $1,000,000,000 (a billion) per year on improving customer satisfaction and yet the customer satisfaction peg has barely moved.  One of the biggest reasons are defections to competitors because of dissatisfaction.  Over 90% of dissatisfied customers will never purchase anything from your service organization.

Part of the problem lies in measurement.  Executives focused on bottom-line results have measures around financials and productivity.  But customers don’t care about such things, they care about what matters to them.

Unlike manufacturing, customers in the service business bring a variety of demands to be absorbed.  A talked yesterday about why this creates problems for standardization in the post – A Service Assumption:  Variety, Not Standardization is the Problem.  Customers want service organizations that customize their experience to the variety they bring . . . not droids that comply to internal mandates and audits.

What gets in the way of good customer service is focusing on the wrong things.  They spend money on marketing to change the perception of the bad service they provision to build a brand, technology to entrap front-line workers in poorly designed systems and other well-intended, but cost increasing activities.  I am not against these things, but I find it better to improve service as more cost and revenue efficient.

Happy customers talk . . . and so do unhappy customers.  These days with the emergence of social media good and bad service is communicated quickly to a lot of potential and existing customers.  Trust can be lost in one or a few errant transactions.

Building a brand should begin with the customer experience.  It is the least costly and most effective way to get and retain customers.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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

The wildly talked and written about Quality Digest article on systems thinking has touched off the debate on standardization (again).  One person commented that because there is a lack of standardization that they can’t get consistently good service.  Hmmm, well, that might be true but let’s take a look at the problem differently.

Folks who read my posts know that the one thing you want in systems thinking is to get knowledge of the “what and why” of current performance.  Which (if you think about it) makes more sense than to plan change without knowledge as is often the case.  In systems thinking you can assume nothing about performance . . . it is important to learn what the work and customer demands are and understand what system conditions drive the performance.

A customer (or manager) may assume that poor or inconsistent performance is caused by a lack of standardization, but they understand little about the system that is provisioning them the service.  But what I know is that system conditions dictate the performance.

Standardization has become a form of best practice and it fits nicely into a command and control thinker’s paradigm.  Information technology likes standardization as it is required to get requirements to be able to code.  Anything less would seem wishy-washy to management or IT folks.

However,  I find it rare that standard forms, procedures, etc. can overcome the variety of demands that customers bring to a service organization.  An inability of standardization to absorb variety leads to failure demand (demand caused by a failure to do something or do something right for a customer) and failure demand is expensive waste.  This is part of the reason standardization is not typically the best answer.

So what are these mystrious and nebulous “system conditions?”  They are different for each organization, but many can be found where assumptions rest.  These can be assumptions around  structure, measures, work design, procedures, IT, management roles, best practices, etc.  If you spend enough time in the work, you will see the system conditions driving organizational performance.

So, if you are a service organization . . . understanding that  standardization is an enemy to variety will allow you to look at your system with clarity instead of assumptions.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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

In looking at government, many things become clear in the design of work.  The most prevalent is that things are poorly designed and poorly designed services leads to waste in the form of increased costs.

In previous posts I have hit upon command and control and economies of scale thinking that dominates both decision-making and structure (must read: the white paper – Why do we believe in economy of scale?) 

Government management in its pursuit of lower costs is building an infrastructure of failure.  The result is predictable and maddening, but the dysfunction continues.  Here are some of the things that government deploys to lower costs, but in a managament paradox increases them.

Outsourcing/Privatization – The plausible thought is government is too expensive and outsourcing will reduce costs.  This has become popular with government, but too little time is spent understanding customer demand before contracts are made.  Governments outsource the waste to contractors based on a set of assumptions that a vendor can do it better than government.  A poor design is at fault and moving to another vendor just adds to the cost.

Shared Services – Another easy win as government management sees front and back offices, contact centers, vehicle service centers, and other functions that seem to have related activities.  Combining them will surely save money.  In the haste to save money, no one questions the work design or whether these “same functions” have the same demands.  Again the result is increased costs.

Technology – No assumption is more blinding in government than the crusade to automate or modernize our outdated government.  Yet the returns on such investments are compromised by automating a poor design. Technology only locks in the waste of this design.

And so it goes in government where our efforts to reduce costs does nothing more than build an infrastructure of failure.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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

The massive amounts of data that are being spewed out by IT systems has created whole fields of business analytics and business intelligence for executives to make decisions.  Better data, mined data, etc. is a call to make useful. what is not.

To turn information into knowledge we need three things:

1. Customer Measures
2. Context
3. Data (and a way to interpret it)

Context is knowing what is happening in you system that gives us a clue in why our system operates the way that it does.  Getting an understanding of the “what and why” of current performance (performing “check using the Vanguard Method).   To do this you have to go to the work at the points of transaction and get knowledge on what the customer purpose is (or what matters to customers). 

What ever you do, don’t rely on reports or computer generated data.  They have no context to help you learn what you need to get knowledge.

Armed with customer purpose, the next step is to derive customer measures from this purpose.  A good example of this can be seen in Getting the Benefits. 

Measures focused on the customer get rid of all the functional measures and in-fighting that happens.  Financial measures are lagging in nature and customer measures can drive value for customers, and therefore, profit or for government management - reduced spending.  This presents a management paradox in business improvement or cost reduction.

I have long been a proponent of  using SPC (statistical process control) and have a post that is one of my most read posts – Service Metrics: What You Need to Understand.  I won’t belabor the point except to say if you are not charting data, you stand to tamper (make wrong decisions) on data.

So there you have it, a systems thinking approach to getting knowledge.  Becuase information just isn’t good enough.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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

I wrote a post over the weekend about Chase having bankers pull people out of line to upsell products to them (Banks – Don’t Copy Chase on this Policy).  Then today I researched more upselling that happens in other industries at The Consumerist website.

The United States Postal Serviceapparently has to try to upsell on your packages, AMC , Verizon, Best Buy and many more.  Forced upselling has got to end.  I mean when a customer comes in the door and says don’t try to upsell me and the front-line worker continues to do so . . . we have a problem.  We have both waste and customer anger, so what’s the upside here?

The coup de grace is to follow up this madness with mystery shopping for compliance and bonuses.  It is to make stupid  . . . lethal.  Demeaning to both the customer and the worker.

There are better ways to generate revenue for companies.  Understanding customer purpose and delivering service that gives customers what they demand. 

Good service is getting harder to find as service organizations weren’t that good at providing good service in the first place, now customers have to compete with internally-focused programs like upselling that make it even harder.  This is a hard sell in many cases and increases costs and loses customers.

Service organizations that participate in upselling have been sold a bill of goods that can’t be delivered.  Trust erodes the confidence of customers to get what they want as this is over-ridden by mandates for revenue.  To me, it is the beginning of the end.

Provisioning what customers want and how they want it should be the focus, not some arbitrary financial target that leads to chasing away customers.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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

Related articles by Zemanta

• Cut the upsell, or get no sale (timesunion.com)

Image via Wikipedia

On occasion I like to go to The Consumerist website.  A great place to go hear about scams and customer service complaints.  This weekend I came across the posting of an article or more of a rant from a Chase employee that has to upsell – titled, Chase Banker: I Hate That We’re Required To Pull People Out Of Line To Offer Upsell.  Ah, CRM data finally has a use . . . we can review people’s private lives and offer new products.  I think I need a shower.

The approach goes like this - you go into the bank to transact business and a banker comes up to you and pulls you out of line to “help” you.  What they don’t tell you is they have no cash drawer or ability to post transactions.  They send someone else to deal with your transaction while they review your account and “sell. sell, sell.” 

The banker doesn’t reveal their name, but enough comments have been posted by former and existing customers that you have to believe it’s true.  The genius that came up with this idea must be trying to hit some revenue target for a bonus. 

Now I can imagine a few customers will buy something, but how many close their accounts, posting negative comments on consumer forums or writing/calling to complain.  Why is “push” the preferred method to actually providing good service and developing good relationships where customers want to work with your organization.  It is both perplexing and costly, but again someone hits their target at the expense of the rest of the system.

I always find that giving customers what they want both increases revenue and decreases costs.  A banker that is not forced to do dumb things will have a relationship and be able to strike up a conversation naturally and with sensitivity to customer demands on time and other factors.

In a systems thinking world, we build systems that serve customer demands.  Sometimes that takes a little work to understand outside-in when most policies are made inside-out in accordance with what our boss demands and the dysfunctional targets they are given.  However, the pay-off is huge in happier customers, lower costs and higher revenue in the end-to-end system.  Oh, and let’s not forget happier employees too.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at tripp@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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