Category Archives: The 95 Method and Government

The Customer Sets the Target

W. Edwards Deming railed against using “arbitrary numerical goals” and there have been some concluding that targets are “always bad.”

I disagree that targets are always bad.

Arbitrary numbers are certainly an issue.  Unfortunately, they are a staple inside organizations of all kinds. Hit this financial number or this internally set target that fits nicely into achieving wanted levels of activity by misguided management.

However, you are talking about something completely different when a customer “wants it by tomorrow.”  This is a real target set by the customer and is not by any means arbitrary.  The main difference is an internal focus vs. an external focus.  The customer does not care if you hit your budget or activity targets, but they do care if you are able to deliver what is important to them.

The management paradox is that hitting customer targets always will help you achieve your financial targets and not vice versa.  Consider IT software, where meeting schedules and budgets have become the target . . . but customers want IT that works.  If you hit the schedule and budget and have IT that doesn’t work, what have you achieved?  How will this play when trying to attract new customers?  The sales pitch is we hit our schedules and budgets, but give you crappy software?

Targets are OK, you just need to understand who is setting them – you or the customer.  If the answer is anything but the customer, you are only fooling yourself.

Take a look at your organization as your customers see it –  our 4-day workshop has been called “an awakening experience.”  Tripp Babbitt is a service design architect and organizational futurist.  His company helps service organizations understand future trends, culture and customer.  The 95 Method designs organizations to improve the comprehensive customer experience while improving culture and management effectiveness.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter atwww.twitter.com/TriBabbitt or LinkedIn atwww.linkedin.com/in/trippbabbitt.

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Telecomm Still a Nightmare for Customers

I really don’t enjoy writing these blog posts on bad customer experiences, because the experience is real for me or someone else.  It would be a wonderful world if a customer could walk in and get the service expected or their problem solved.  This would be end of story.  However, this isn’t the world customers live in.

I was doing a podcast this past Monday with David Houle, a futurist and one question I asked him was, “Is the end of caveat emptor or ‘buyer beware’ at hand.”  His response was that companies that live without trust with customers were basically dinosaurs that aren’t surviving today’s environment, never mind tomorrows.

That same day I started working with my current carrier Sprint to get 4 new phones for the family.  I stopped into a Sprint-owned retail store to begin the exchange.  I read online that you could get a discounted price on new Apple phones.  Iwas informed by the Sprint agent that that price was only good for “new” customers.  I informed the agent of my displeasure and that moving to a new carrier now was an easier decision.

I went home and thought I would give Sprint one last chance by trying Twitter and Sprint’s @customercare, here is the exchange:

No end to the discussion.  As my last question has not been answered as of January 2, 2014.  Needless to say, I was disappointed in Sprint’s response.  I am not a fly-by-night customer as I have been a customer of Sprint for more than 20 years, but new customers are their focus.

The story does not end here.

I went to Verizon on December 30th to give them my business and was given a plan from one of the agents that fit my needs.  It was a bit more expensive, but I was a motivated buyer.  Anything to find an organization that appreciates my business.  The Verizon agent gave me a quote  and I told him I would collect the phones I had and bring them in the following day.  The agent informed me the “trade-in” value of the old phones was only good through December 31st.

The next day I stopped in at the store with phones in hand to complete the purchase.  I was informed by the Verizon agent that the agent that helped me the day before was not in and because he was paid on commission, he would have to send me to a non-commissioned agent.  After a 20-minute wait, I was passed to the non-commissioned agent.

The non-commissioned agent and I worked through 40 minutes of paperwork and checking that the phones I wanted were in stock.  We started the exchange and I was met with a fraud stoppage from the credit department.  Apparently, by buying 4 phones I tripped some fraud audit.  The agent said that my order was to be put on hold until I cleared the fraud audit and that could take up to 72 hours.  The non-commissioned agent called me January 1 (yesterday) to give me the number that was needed to clear the audit.  The saga continues . . . I will update.

I would like to think that David Houle was right and that companies had designed services that build trust.  However, my experience has been that caveat emptor is alive and well.  The consumer has to fight for themselves as commissioned sales people and having to do things on your own (as a customer) to progress an order are not user-friendly experiences.

Both Sprint and Verizon profess world-class customer service, but neither delivers on a consistent basis.  As most service organizations, they can not see themselves from a customer viewpoint.  They can only see the result of what they have designed and there is a lot of waste they are missing.  The waste is innate in the design they have chosen and will remain until they take a customer’s viewpoint.

Take a look at your organization as your customers see it –  our 4-day workshop has been called “an awakening experience.”  Tripp Babbitt is a service design architect and organizational futurist.  His company helps service organizations understand future trends, culture and customer.  The 95 Method designs organizations to improve the comprehensive customer experience.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn atwww.linkedin.com/in/trippbabbitt.

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Onshoring, Offshoring or Outsourcing – The Reasons Matter

The last American election “exposed” outsourcing as an evil, and in part, a reason one presidential candidate defeated another.  The belief is that outsourcing – foreign or domestic – helps to optimize a business function.  I heard this argument for the hundredth times on the Washington Times Communities website in an article titled, Outsourcing vs. Offshoring.

It is the wrong thinking.

However, organizations continue to perpetuate the “optimize each function thinking” as blindly acceptable.  Sub-optimization results on a large scale.  Locking in waste for short-term profit games has become a national pastime in the US.  It is hard to find organizations that don’t lick their chops when they see the reduced costs in the form of lower wages in outsourcing.

Political and consumer backlash seems to be bringing back the jobs . . . and again for the wrong reasons.  The problems with outsourcing go beyond politics.  This is not to say that consumers should be ignored as they decide what organizations to place their business with.

The deciding factors need to connect with the waste service organizations are outsourcing.  When the design of the work prevents customers from getting their demands satisfied – we get failure demand.  When phone calls run 40, 60, 80% and higher of these types of demands -which I find in almost every organization – why would you outsource this much waste?  It is more prudent to redesign the work.  Service organizations that outsource this much waste are locking in costs, not reducing them.

So few organizations know what to measure that reduces costs and the result is managing by costs alone.  The result is always increased costs.

Before the next onshoring craze let’s address the problems first . . . the right ones.

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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Plan, Budget and Performance Measures

David Walker of the Comeback America Initiative that he founded is often on CNBC explaining what it will take to get America on track.  It is the same story . . . build a plan, budget the plan and institute performance measures.  To paraphrase Mr. Walker, the former US Comptroller, “this is what big, successful companies do.”

This thinking is what led us to the US decline in the first place.

Mass-production and industrialized thinking that didn’t succeed after WWII has led to retrenchment.  In this case a better word would be – retreat. Down-sizing our budget and workforce requires a plan.  Winners and losers baked in and the losers are Americans.

This does not mean that we should continue down the course of large deficits or that budgets don’t matter, it just means you are managing a retreat.  Large scale ideology leads to massive expenditures as more expense is derived from managing the downsizing.  This is not the way forward for the public or private sectors.

Finance has overwhelmed logic as the numbers are misleading.  Context is needed and so is the evidence.  However, big thinkers don’t have time for the detail and this leads to deficits.  Managing scale, flow is missed and naturally so are the causes of cost.

Political candidates are touting their road maps, plans and other non-sense without knowledge.  Voters starved for detail can get only sound bites, sappy commercials and personal attacks.  It is pathetic.

With budgets, the mantra is to cut costs.  Performance measures help keep the budget numbers on track.  In a system full of waste, just cutting costs misses addressing the waste.  A bad system with no money still leaves a bad system.  Performance measures derived from budgets and plans (without knowledge) almost always lock in the waste.

So, this political season be skeptical and demand more than just pplans, budgets and performance measures – how do we grow?

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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Divided Responsibility – Still Haunting Service Organizations

You would see it more often in manufacturing, but divided responsibility plaques service organizations too.  Typically, in manufacturing it would be seen in quality control efforts where management would declare high-quality products.  The management paradox is that more inspection predictably led to higher error rates.  When two or more individuals inspect the same product to “inspect quality in” it means no one is responsible.

When action items are delved out amongst participants of a meeting, often you will find two (or more) individuals being given the same task to “share” the workload.  Nothing fundamentally wrong with that except someone has to take ownership with the other(s) supporting.  Clarity in ownership is important to avoid finger-pointing or sub-standard action.

President Harry Truman with

President Harry Truman with "The Buck Stops Here" sign on his desk (Photo credit: Wikipedia)

To me, this divided responsibility is reflected in work designs where tasks are broken into so many pieces that no one can have a chance to know if they are doing a good job.  This is because the actual outcome is buried multiple levels beyond the first step.  Customers get frustrated as they have to figure out who does bear responsibility.  This often ends in escalations to management that unfortunately take a lot of time to “get up to speed” to resolve a customer issue.  “The buck stops here” is the famous phrase from Harry Truman that I hear from management in service organizations.  Finding the right answer for a customer is the problem.

Clear lines of communication in the design of the work and responsibility of tasks.  Keep the work together if at all possible, but make one person the owner.

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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Support of Top Management is Not Sufficient

“Can you blame your competitor for your woes?” he would intone to groups of corporate managers. “No. Can you blame the Japanese? No. You did it yourself.”  – W. Edwards Deming

The bruising of egos for those in management was a staple when Dr. Deming would speak to such groups.  A certain disdain for those in management that didn’t or couldn’t understand the new philosophy.  He lacked the natural charisma to charm his audiences and little effort to do so.

The most damaging single group to American lack of competitiveness is management.  Labor gets all the headlines as this group has been maligned by all to many . . . anyone for a scape goat?  Look to management.

Management to Leaders

The use of arbitrary numerical goals coupled with the focus on short-term profits are only part of the problem.  My recent article in Quality Digest illustrates the need for management to become leaders by getting knowledge through understanding the work and the system in which they work in and influence.  This is not someone else’s job, it is the job of management.  Boys to Men, girls to women and management to leaders.  The right of passage.

The incessant copying of the Japanese is mostly comical at this juncture.  We have to speak Japanese to improve?  Did Deming ask the Japanese to use American words and phrases in July, 1950?  No, he asked them to learn.  This requires different thinking than that seeks management to set arbitrary numerical goals.  Deming’s famous quote is, “By what method?  Different questions lead to different answers.

Management’s active engagement is a requirement, not a like to have.  The ignorance of current thinking has to be replaced with knowledge.  There is no other way.

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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Labor Day Reflection

English: American Federation of Labor charter ...

English: American Federation of Labor charter for the Cigar Makers International Union of America, 1919. Published in American Federation of Labor: History, Encyclopedia, Reference Book, photo plate between pages 48 and 49. Published by the American Federation of Labor, 1919. Published in USA prior to 1923, public domain. Digitized by Tim Davenport for Wikipedia, no copyright claimed. (Photo credit: Wikipedia)

The first Labor day in the US was celebrated September 5, 1882.  A “Workingmen’s Holiday” as it was called.

Living in Indianapolis, you run into Labor Unions that have slowly but progressively disappeared.  Sure, you still have the Teacher’s Unions and many others but workers in Unions represent about 11.8% of all wage ans salary workers.  This number has dropped over the years.

Yet, even with this small percentage the unions are often a target and sometimes these fights affect the average worker – union or not.  Having grown up in a family that despised unions, it was a long time coming before I realized that this inclination spilled over into laborers in general.  So, like most, I went to college to “be better than that.”

However, when you look at the engine that makes things run it is truly more the workers.  Don’t get me wrong, I love what Steve Jobs did to make my life easier and no doubt he was handsomely rewarded.  But Jobs and others are a rarity.  Most people don’t aspire or care to achieve  or just stating a plain fact – 99.999 % of us never will.

I don’t mind the Steve Jobs of the world getting their due.  Yet, most CEOs today did not build the companies the lead.  Some were genetic marvels where the business was handed to them.  Others came up through the hierarchy and achieved leadership positions, a combination of education, good fortune and occasionally savvy.

The salaries these folks command and the disparity to workers has come under increasing scrutiny.  The ration was 24-1 and now is a whopping 243 -1 according to a 2010 survey.  The fact is that such disparity is sometimes deserved, but more often it is not.  Yet, unions and the worker have come under more scrutiny than CEOs, unless of course . . . you break the law.

The US has become a swinging pendulum between too much labor or too much management.  The strength of labor unions was considered to be socialistic or even communist.  However, many were not necessarily out for power, they just wanted better working conditions or fair wages and benefits.  Some perceive this to be an entitlement issue.  If you work your whole life and don’t have enough to retire was it just the choice of the worker or does the company have an obligation?  Nowadays that argument has been settled as defined contribution plans have replace defined benefit plans.  Retirement is clearly an individual responsibility in the US and the problems with Social Security make it more so.

W. Edwards Deming marked the decline of the US starting in 1968.  Some blame unions and some blame management.  Dr. Deming placed the blame on US management.  From what I have seen in service and manufacturing, I agree.  Many countries have unions and are beating are heads despite the “handicap.”  We just haven’t gotten better as labor and management have found so few areas to connect on – something that has to stop.

The work designs in service organizations lend to depressing cultures and worker discontent.  Workers trapped in these designs and than wrapped into them with information technology.  Better designs mean better profits and a more motivated workforce.  Isn’t this really good for all, if we forget the labels?

Labor day gives us a chance to reflect on the year ahead.  Different and better thinking may be worth exploring.

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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Worn Out by the American Political Rhetoric

This isn’t a post for Rs or Ds as I hear them often referred, it is an appeal to common sense.  I have listened and will continue to listen to the debates and speeches that will determine a winner or loser in November’s election.  Ahh, the American political process . . .

English: US political ideology trends 1992-2011

English: US political ideology trends 1992-2011 (Photo credit: Wikipedia)

Winner doesn’t mean improvement.

The next bright idea is just that – an idea.  Political ideology fills the air with more emotion than sense.  Scrap medicare, keep medicare, privatize or grow government all have been debated and spoken about by political pundits the world over.

Nothing has improved.

The ideologies to bring wealth and prosperity to the USA have failed us all.  There is a need to turn to a method based on evidence rather than conjecture and hope.  No political party has a complete success story.  The spin is more important than the evidence.

Where do we go from here?

We need for the folks in government that have method to improve it.  I have heard during this weeks speeches how NASA was a highly motivated entity in its pursuit of the moon.  It just didn’t end with NASA, the whole government was very focused on purpose.

We need this to happen now.

Further, we need method to improve based in knowledge and evidence, not pixie dust and wishes.  This would end the ideological divide that separates this nation.

Condi Rice is right in one sense, “No country, no, not even China can do more harm to us than we can do to ourselves . . .”

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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Does Your System Make Workers Accountable?

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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The Customer Strikes Back – Are You Ready?

I recently read an article by Doc Searls in the Wall Street Journal called, “The Customer as a God.”  Customers have long catered to service organizations by being treated in a  herd mentality – meaning the customer has to adjust to to the service organization.  However, the future holds a very different environment.

Doc Searls references it as Vendor Relationship Management. The Customer is King!

This is yet another strike to economy of scale thinking .  Mass marketing soon will give way to individual marketing and economies of flow.  This future means that service organizations will need to absorb great variety in customer demands.  Standardization will not only cost more through failure demand, but will now not give what customers crave services fit for them in a customized manner.

Wow!  Redesigning our thinking about the design and management of work is now more important than ever.  Not only does it cost less, but it delivers service in a truly personal manner.

Are you ready for the future?

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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