The No Tool Zone

Working with a new company that has the right attitude going into the effort, one can only be optimistic.  The management is begging to be challenged, it is encouraged.  However, I am caught in a world between realism and hope.  There will be a roller coaster ride of emotion for my new client – management and workers alike.

Many prospective customers struggle with what the Vanguard Method (tVM) is about and try to fit it into their existing paradigm.  This makes the conversation awkward as the expectation of many is that I do process improvement . . . and I don’t.  Managers with this thinking want to do things better, tVM is about doing better things.  This is one of several reasons why improvement is so dramatic for those executives that understand that this means them too – when it comes to change.

Executives become participants by design.  Other improvement efforts embrace “sponsorship” and “support” which to me is completely lame and leaves too much improvement on the table – not empirical, but something like 30 – 40%.  Sustainability improves dramatically when executives understand – they are less likely to undo the good things.

The reality is that too few executives want to be challenged.  Ego and position in hierarchy play a role in this thinking.  Executives making the big money should have the answers in their mind and being challenged is – therefore, viewed as confrontational.  Nothing wrong with confrontation, but only when it is invited in.

Most people that know about the Vanguard Method know they will be challenged when we are invited in, the reputation of our successful work with clients often precedes us.

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 Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

A question posed quite often by folks interested in learning the Vanguard Method is, “can you put on a class to teach me the Vanguard Method?”

The short answer is “no.”

Do we do training?  Yes, all the time, but it isn’t of the sort that you sit in a classroom and become inspired by anecdotes and case studies.  You have to be in the work, understanding and coming to grips with seeing things differently.  Only a steady diet of learning how to ask good questions and unpacking what you learn after manageable bites are taken can you slowly unlearn bad habits and embrace new better ones.

The toughest people to engage are always those that believe all they need is a little change . . . and that is most I encounter.  Or worse, they try to start with the things they know like plans.  Always, my response is predictable you begin with “get knowledge” and not plan or even scoping.  Planning and scoping – as traditionally done – fall well short of getting knowledge.

You see, understanding a system is much broader than traditional approaches.  Improving a system as I have stated before requires workers and management to change.  Workers and managers can redesign the system together while management thinking must change to sustain the improvement.

Frustration mounts when speaking to those folks seeing the fantastic improvement from the Vanguard Method, but try to engage keeping the same mindset that caused the waste and sub-optimization in the first place.   The best way is to begin to work together without preparation.  Going to the work and learning allows you to see for yourself the opportunity for improvement.

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 Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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:

1. Cutting Costs to Improve the Bottom Line – A focus on costs always increases them.  Costs are reduced by improving flow, not scale.
2. 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.
3. 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.
4. 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.
5. 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 Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

As other governments look for examples to get out of their current mess, they should not be looking to the US or UK for guidance.  The UK expenditures have tripled in health care and doubled in local authorities.  The US has performed no better . . . . health care (Medicaid and Medicare), social programs, social security and just about every program run by government in the US is run so poorly that we have a tremendous deficit.

But our biggest deficit in the US is one of thinking.

You see ideology which breeds emotion and foolish decisions rules the day in the US.  Republicans want less government, and a balanced budget.  Democrats want more programs to be added to help people (i.e., more government), and more stimulus.  The two parties are at such odds that they can’t get anything done and everybody is mad.  Independents hold their nose and vote.

The problem in the US is ideology of both parties blinded by huge assumptions and biases.  At each others’ throats day in and day out.  Either side trying to keep power or trying to get it.  No agreement on anything – gridlock, frustration and irate voters.  Ideological stupidity reigns in the US.

Because of the extremes of both parties there learning has been lost to spinning – the art of failures being twisted to be a good thing.  Attack and counterattacks rather than coming together to solve problems.

What about evidence?

No one actually looks for evidence that would be foolish.  US Government systems are too complex, they require ideology.  And so the pendulum swings between the ideologies of left and right . . . Democrat and Republican.  Stalemate.

Evidence of what works and doesn’t work can be found but you have to look without bias and ideology.  It does require actually putting petty party differences aside, rolling up the sleeves and getting in the work – together as Americans.

On September 11, 2001 I drove to work from Randolph, New Jersey to Morris Plains.  A clear day and on those clear days you could see the Twin Towers rising from the City.  Later that day, all I could see was smoke of what remained.  Maybe we didn’t come together enough as Americans . . .

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 Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

USAToday’s article about Roger Simmermaker and his buy American movement may indeed garner support – even Diane Sawyer has challenged Americans to “buy American.”  Seems a patriotic and viable way to bring jobs back to the US.  I do not see this lasting for very long.

Why?

Quite simply, Americans want to buy the best products for the money they put out.

For years of my youth I heard about Jap junk.  Along came claims that Japan was “dumping” cheap products on the US to get market share.  I even remember a time when a foreign car being driven in Detroit was shot at.

The truth is that Honda, Toyota and Nissan make better cars at a lower price.  This is a not a scale (volume of production) problem, if it was the Big Three had all the scale after WWII.  This is a problem of flow and thinking.  The Japanese wanted to build a better car and American’s want more profit.  Buying American indeed may just make executive’s richer and few jobs added.

To compete against anyone for jobs, we have to change our thinking about making products and services that people want to buy?  Will you really give up all those Apple products because they are not made in America?  Ultimately, consumers will go where the best value lies for any products and services.

This is not a worker problem.  Management designs the poorly conceived systems that workers have to endure.  Different thinking about the design and management of work is needed.  The short-term profit and industrialized approach have run its course to predictable ruin in America.  “Every man for himself” will not get the job done.

Our poor management thinking has created crisis after crisis, yet they refuse to budge.  Much of the outsourcing and off-shoring is done because of flawed management thinking about costs – as are many other poor management decisions based on cost.  Economies of flow, not scale.  A focus on costs, always increases them.

If we want to “buy American” let’s start to build products and services in America that consumers wants to buy.  This begins with a change of thinking, not just a patriotic mantra.

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 Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Back in 1931, during the Great Depression, many other countries thought the end of capitalism had come.  They looked to communism and socialism as the failed attempt at capitalism seemed imminent as the Depression dragged on. Hitler rose to power in Germany and Stalin in Russia.

In the past 50 years, the US has managed to:

• Shed its manufacturing jobs with a combination of thirst for profit (outsourcing) and being out-competed by a country with few natural resources, but better method – Japan.
• Ruined its world standing with risky loans from US banks (no matter who is to blame)
• Increased the government deficit to the point that we have lost the coveted AAA credit rating and stand to lose the dollar as the currency of choice for the world
• Running an unemployment rate of over 9% with the reality is the real number is much larger
• Compromise whole organizations by executives maximizing corporate profits through manipulation to increase their personal balance sheets

Most of this has happened in more recent history and certainly isn’t a comprehensive list.  W. Edwards Deming told us that the peak for the US was 1968 and been in decline ever since.  All is not lost, but a wake-up call anyone?

Today’s turmoil with budget deficits and high unemployment rates leaves many questions about where the United States is heading.  It made me begin to question what capitalism is.  So, I looked up a definition:

An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.
Source: Dictionary.com

Somehow profits has been bastardized into meaning that if my own individual balance sheet is better off – that is profit.  Executives and investors get a bulk of the profit because that is who should profit in a capitalist system.  Somehow we have left the worker behind in favor of the other groups.  Aren’t the people that DO the work important?  What about the work itself?

Seems to me that making the work and the worker relevant again would be a good thing.  This has less to do with trickle down economics and more to do with greater profit.  And can we start making things again?  Products and services create value, shifting money around does little to improve our standing – the results are obvious.  Investment banking has become gambling.

Naturally a reset on how we design and manage work needs to happen and soon.  US businesses using industrialized design and economy of scale thinking for manufacturing and business will continue the slide Deming warned us about 30 years ago.  Little has changed . . . and in fact entropy has taken over and the decline accelerating.

Capitalism is still the best thing that is going, but some of the “add-ons” to the definition of capitalism or how they have been played out need evaluation.  The principles are there, but the details need rewritten.

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 Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Industrialized service design in government and service industry continues to drag us all down.  Government and service companies with higher costs and customers with poor service and higher prices – somebody has to pay for the waste and sub-optimization.

Technology vendors make a ton of money selling their wares with the cover of simplify, standardize and centralize.  They will show you ROI on a PowerPoint but you can rarely find evidence that the TOTAL economic system has been improved.  Hype via marketing is a much stronger tool because in that world you can make up all kinds of stuff and not get challenged.  We (technology vendors) are making lots of money, it must be good!

In service, variety is the enemy.  Standardization fits the industrialized mindset.  But variety of demand is inescapable.  A counter-intuitive truth that remains foreign to government and service companies.

Technology is much cheaper to deploy when there is standardization.  The key word is deploy meaning code and sell.  The wrong questions get asked and the technology factory spits out more and more worthless software.

Centralization is all about getting economies of scale.  The management paradox here is that costs are improved through flow, not scale.  Something well-documented by John Seddon is Why Do We Believe in Economy of Scale? An impressive and thought-provoking paper.

Ultimately, making good decisions about technology comes down to knowledge and evidence.  The fools will make assumptions without evidence.

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 Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

W. Edwards Deming’s Chain Reaction is simple:

1. Improve Quality
2. Costs Decrease (by removal of waste and sub-optimization)
3. Productivity Improves
4. Capture the Market with Better Quality and Lower Price
5. Stay in Business
6. Provide Jobs and More Jobs

I have seen the “Chain Reaction” changed to “return on investment” from “provide jobs and more jobs.”  Rather self-serving to manipulate Deming’s thoughts.  The aim was to create jobs – a higher purpose.

Looking at the larger system called the US economy, there is great benefit to providing more jobs.  Less people in the welfare systems means less government spend and less government debt.  Something that has had our attention for the last two weeks.  An expensive system is the welfare system when over 9% of people are unemployed.

Private organizations are hoarding cash and are helping create a deteriorating economy in a Catch 22 – an attempt to protect themselves only worsens their condition.  More people go on the unemployment line meaning less people to spend money on products and services and then these same unemployed have to go through a welfare system wrought with waste that adds to the budget deficit.

We need a reset on corporate purpose.  A broader system is at stake than just our personal or corporate balance sheets.  Optimizing the American system will take a different approach.  The “me first” mentality has proven less than optimal.  Dr. Deming’s Chain Reaction is looking more brilliant everyday.

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 Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Look inside any organization and you can find what is of value to them.  If the front-line is manned by low wage earners without the ability to make decisions important to customers.  And further have their every move controlled by management using technology, policies, procedures, rules, audit, scripts, reports and an assortment of other management control mechanisms.   The customer is of little value to you.  Your organization loves itself more than the customer.

When 20% of all employees can create or add value and the other 80% add little or no value you have a problem.  If this 80% spends its hours devising ways to entrap or disable what customers value from the 20% that create value costs will skyrocket and customers will flee.  And BTW, that 20% are almost exclusively front-line workers and management.

So few can create or add value because of system design . . . the 80% outnumber them.  For every one step a value creator takes forward, the people paid the most in positions that customers value least find ways to entrap or disable taking two steps back.

The challenge is to design a system where 100% can create or add value.  The problem is overcoming those that have grown accustomed to status or position and not value for customers.  This matters little whether your organization is 80/20, 63/37, 40/60 or whatever the number you might find in your service organization.

Designing better systems requires service organizations to stop doing certain things and begin doing better things.  Ultimately, some activities just need to be stopped.  If you believe that stopping smoking is the right thing to do, you don’t need to put something else in your mouth that is bad for you.  The 80% left without better things to do, almost always find activities to replace those they just got rid of that are just as bad.

So what is a good way to assess what your organization values?

Go to the work and see who interacts with customers and those are your percentage that can create value.  Or better do what one manager did, pull the fire alarm and send everyone to the parking lot.  Get on the bull horn, and tell all those that interact with customers to go back inside.  What you have left are an assortment of space eaters and management.  Suddenly, you will make the realization that you don’t have a capacity problem you have a design problem.  The organization has designed in roles that can only produce waste.  And your customers already know.

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 Vanguard Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

First of all, I am not a statistician, but have learned from what I consider to be the best people in the statistical realm.  Dr. Don Wheeler, Dr. “Frony” Ward and a gentleman named Tim Baer.  These folks understand in statistical terms how control charts work and also understand the message of W. Edwards Deming and Walter Shewhart.  If you want to understand Dr. Deming’s System of Profound Knowledge. you have to understand variation.  David S. Chambers and Dr. Wheeler’s book Understanding Statistical Process Control is a must read.

The question came to me recently about why three standard deviations (3-sigma) and not two to discern data.  I reacted rather badly as it had been awhile since 3-sigma limits had been challenged.

Wheeler and Chambers (in the fore-mentioned book) point out that 3-sigma limits are “not solely based upon probability theory.  Further . . . “this point has been repeatedly misunderstood by those who would use  probability theory to “adjust” control chart  limits.

Shewhart identified his reasoning in the Economic Control of Quality of Manufactured Product:

” . . . we must use limits such that through their use we will not waste too much time looking unnecessarily for trouble.”

“The method of attack is to establish limits of variability . . . such that, when an observation is found outside these limits, looking for an assignable (special) cause is worthwhile.”

” . . . we usually choose a symmetrical range characterized by limits

Ø ± t σ_Ө

Experience indicates t=3 seems to be an acceptable economic value”

“Three-sigma limits are not probability limits.  The strongest justification of three-sigma limits is the empirical evidence that three-sigma limits work well in practice – that they provide effective action limits when applied to real world data.  Thus, the  . . . arguments cannot further justify the use of three-sigma limits, but they can reveal one of the reasons why they work so well.” -  Wheeler and Chambers

So, there you have it.  Empirical evidence by their use is the reason that we have 3-sigma limits.  This fits with overwhelming evidence for when to look at special causes.  Occasionally, I find that I get a false signal in practice wither a special cause within the limits or a false signal outside the limits.  However, I have found that they serve me well in practice.

Further, I have found that in service that limits are much more robust in as systems display great variation.  Many times this has played itself out as I understand customer demand – meaning that homogeneity of the data is the issue, not the limits.

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