The Waste of Targets in No Child Left Behind

In Indiana, if the 180-day mandatory school year wasn’t bad enough, now we have these “standards” (targets) for the federal No Child Left Behind Program.  Last year 65.7% had to pass the test and the new target for this year is 72.6%.  This increase in the target has made in the best schools in Indiana “fail” in the eyes of this federal program.  All this foolishness achieves nothing.

The school systems are performing the best their systems are capable of achieving.  Let me give you an example.  I shoot around 80 when I play golf.  My system allows me to shoot in a range between 75 and 85 with an average of 80.  This is what I am capable of achieving without changes to the system.  To have someone tell me to shoot 72 (on average) requires a change to my system (swing, short game, etc.).  Just setting the target does not change method.  Our school systems need to change method to achieve new heights . . . a new target without method achieves nothing. 

Worse these targets become the defacto purpose of the school systems when the real purpose should be to find new methods to educate our children.  Instead, this defacto purpose urges schools to meet the target.  The targets will (and have) promote cheating and manipulation in the school system that distracts them from changing method and blurring the schools purpose.  These are old methods born from scientific management theory from the late 1800s.

Let’s look at the waste already being created.  My son goes to Hamilton Southeastern and we have already received a letter from the principal explaining why they didn’t pass the new standard target.  I don’t care the reason and what a waste of time and resources for the principal to have to take to to explain.  He needs to be finding better methods.  Targets are creating waste in letters of explanations (time to write), and mailings (money).

Our school systems are badly in need of better methods, not targets.  Our country and state need to focus developing these new methods and gaining knowledge.  I urge Dr. Bennett to find new thinking as targets and standards are ancient ways and cause intolerable waste.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free Understanding Your Organization as a System and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt.

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The Paradox of Susan Boyle

How do you not blog about this woman.  Everyone should have seen this by now http://www.youtube.com/watch?v=9lp0IWv8QZY.  We need more stories like this to remove the cynicism of the world.  The paradox of Susan Boyle is somewhat of an enigma.  She is a new chapter to be written.  I can not help but believe that these types of jolts to our individual systems can only have a positive impact on the broader systems.

It makes me wonder if the management paradox we face in scientific management theory and command and control thinking vs. systems thinking could have the same impact for business.  For me, I believe it can.  This will require people to not be cynical and open their minds to systems thinking.  It is not what we were taught or our belief systems to believe.  The counter-intuitive nature of the thinking of W. Edwards Deming, Taiichi Ohno and John Seddon require a shock to our belief system, but as Susan Boyle has shown us the sound can be beautiful.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free Understanding Your Organization as a System and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt.

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The Standard Email: Acknowledgement, Order Status and Thank You

We all get them the standard email when doing business with an organization.  “We acknowledge receipt of your order” and “Thank you for your business.”  It’s appropriate to thank someone and acknowledge their order.  It is just so  . . . automated.  I like the thank you, but it doesn’t sound real or heartfelt.  I will soon forget this company and may buy from someone else just because the experience wasn’t memorable.  Some services may get away with this, but if I am spending money that is significant . . . I want more . . . your customers want more.

Technology change management has brought us email and it saves money which for the command and control thinker is a bottom-line proposition.  Order status emails makes me wonder how much money they are wasting in technology and other non-value-added tasks to tell me the status, they are locking in waste.  As a customer I am left wanting more service and am more likely to refer business with a feeling of belonging than a “cost-saving” email.  If my experience is bad or didn’t meet my expectations the “standard” survey does not account for the variety of demand that I want from a service.  Standard emails, scripts and technology can not absorb this variety and usually lead to increased costs.

The customer management process must be appropriate for this variety of demand.  We are in desperate need of methods that lead to absorbing this variety.  Studying customer demand is a good starting point.  The type and frequency of demand will tell us how to redesign our services for customers to “pull” value.  This method will allow a service organization to achieve business improvement, business cost reductions and new business with a more customer friendly and “systems thinking” work design.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free Understanding Your Organization as a System and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt.

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A Systems View

The first signs of systems thinking came in the middle of the last century in Japan.  This is where W. Edwards Deming influenced the Japanese to start to understand their organizations as systems.  They learned that the functional separation of work and budgetary controls led to sub-optimization and reduced performance. 

When economies of scale first enlightened Frederick Winslow Taylor in the late 1800s it was a breakthrough for its time.  The Japanese breakthrough was about taking a systems view to manage economies of flow an advancement so large it had US manufacturers pleading for protection.

Taiichi Ohno and Shigeo Shingo further developed these ideas at Toyota and Matsushita.  As a whole this the work of these two and Deming largely made up the Japanese Industrial Miracle.

US service companies still follow the economies of scale approach in command and control fashion.  Functional separation of work and budgetary controls that lead to sub-optimization.  The problem with command and control is the design and management of the work.  This thinking features separation of the decision-making from the work.  The worker works and management makes the decisions.  Work is broken into functions and decision-making (control) is achieved through financial goals and performance targets.  Management focuses on output for business improvement and cost reduction.   This focus assures sub-optimization by causing waste and preventing learning about the “what and why” of organizational performance.  Another drawback is the damage it does to culture when those that understand the work can’t make decisions about it or when they are forced to targets they know damage the customer and create internal competition.

This command and control thinking will be abandoned eventually.  John Chambers of Cisco says it will happen in 5 – 10 years.  Will your organization be ready?  What can be done.

Taking a systems view we can overcome this sub-optimal thinking.  To improve performance we must change the system to change the system we must change thinking to systems thinking.  Management thinking must change to improve the system . . . they are the owners of the system.  The good news is with the right approach this thinking can change in a short period of time in service industry. Months rather than years to achieve business improvement, culture change, and business cost reductions.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free Understanding Your Organization as a System and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt.

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Customer Purgatory: The IVR

 

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As a customer I hate them . . . and as a consultant I hate them.  The IVR (Interactive Voice Response) system that you have to call and usually guess what to say or which button to push to speak to a person.  The questions are usually asked about your account number, number of visits (Disney), phone number, etc., and after answering these questions you are asked to repeat them again when you talk to an agent.  If you hit the wrong button, back into the queue you go and typically with another 8 – 12 minute wait.  The IVR “choices” are not always the way I would communicate my order or problem and I find myself guessing whether what I said or pushed was “correct” and I am occasionally chastised for being so  . . . ignorant.  Or sometimes the agent will tell me no one ever really “figures it out.”  I am not sure that makes me feel better.

Organizations that try to break calls down into pieces mostly find themselves with a significant number of lost or mis-routed calls.  Working to standards (method, procedures, scripts or work volumes) usually increases costs. That business improvement and business cost reduction exercise winds up increasing costs and creating a poor customer experience . . . a management paradox.  This problem becomes worse when people are removed from the call center in anticipation of “efficiencies.”

The current design of most call centers does not allow for value to be pulled by the customer.  Straight talk:  The poor service and inefficiencies (waste) are caused by the way call centers are designed and managed.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and terminating bad service through application of new thinking . . . systems thinking.  Download Understanding Your Organization as a System and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  You can Twitter him at “TriBabbitt.”

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John Chambers (Cisco) Declares "Command and Control is Dead"

Some relief in the 60 blogs I have written exposing command and control thinking as the root cause of bad service and increased costs.  John Chambers (CEO of Cisco) has declared that command and control thinking is dead and if you are an organization using this methodology you will be out of business in 5 – 10 years.  I would say he is about right on the time period and that it is about time a CEO of a major corporation recognized this fact.

The

The table above describes the differences between command and control and systems thinking.  In a word, they are . . . immense.  To move from command and control to systems thinking it requires a change in thinking that can only be learned by doing.  Organizational change management doesn’t require tools, it requires new thinking to replace old thinking (scientific management theory). 

The seeds of change are upon us.  If you haven’t already, start with the free download of “Understanding Your Organization as a System”.  Last one out (of command and control thinking) IS the dinosaur . . . and we know how that ends.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free Understanding Your Organization as a System and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt.

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The Zero-Sum Game: A Loser's Mentality

Most of us have connected with the service sector (public or private) and felt like we have been “worked.”  That burning feeling that what matters to you does not matter to the service company you are interacting with. 

The source of this feeling might be the IVR system you have to go through with its multiple layers of questions and feeling like you won the lottery that day by saying the right words or pushing the right buttons to get to a person that can actually help you.  The multiple follow-up calls you have to make to get an answer can be both frustrating and time consuming.  All along you think in the back of your mind either “how can I quit using this company” or “how do these companies stay in business with such poor service?”  A lot of us tolerate the poor service because we figure the next service organization will be just as bad as this one and the switching cost is too high.

The sad part is that service organizations could provide really good service at a lower cost, but command and control management doesn’t think that way.  The command and control mentality prevents good service and promotes higher cost.  They just don’t see it.  They manage their businesses in a zero-sum game believing there is a trade-off between costs and good service.  One can only be achieved at the expense of the other.  And guess which loses most of the time . . . good service at the expense of some financial or performance target typically for some financial reward that customers would cringe at if they knew about.  The leadership strategy of command and control organizations is to do as little for the customer as possible and maybe they won’t recognize or complain about the bad service.

The problem is customers aren’t stupid and the tolerance for poor service is at boiling point.  Social and business networks are now offering mediums to communicate poor service in an on-line instantaneous fashion that is viral in nature.  People will know about a company’s poor service much faster than before and avoid using those organizations that are guilty.  Recovery will be too late and the costs that don’t show up on the financials will already be incurred.

The management paradox here is that all this is unnecessary.  The zero-sum game is a loser’s mentality.  More costs are incurred through bad or poor service than are incurred when the service is good.  Command and control thinkers do not account for failure demand, multiple calls from the same person to get a problem corrected, or chase the status of a previous call.  All failure demand is waste.  Imagine how much costs would fall if customers got what they want and the corresponding system was re-designed to give the customer what they want and eliminate this failure demand.  Costs would fall and service would improve.

The systems thinking organization understands that value drives profit and not vice versa.  The command and control organization only knows the zero-sum game that is a guaranteed loser.  A change in leadership strategy is imminent, where will your service organization wind up?

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and terminating bad service through application of new thinking . . . systems thinking.  Download (free) Understanding Your Organization as a System and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.

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The New SPC for Service: System Performance Capability

One of the things that is integral to a systems thinking approach is the use of data, but not in the command and control way of thinking.  I have already heard from many of you moving away from traditional (and destructive) call center management measures like talk time and other productivity related measures.  Instead now using failure and value demand measures and the type and frequency of these calls that John Seddon outlined for us in Freedom from Command and Control

We also need to understand the data on a service organization’s ability to perform against customer demand.  These are better measures regarding the performance of the system as a whole and not the performance of a unit or department.  A systems thinker understands that if the customer expects to get something within a time frame (say a week) and the service isn’t performed during this time frame it will create failure demand (chase calls).

The data from the customer expectation is typically “end-to-end” and crosses (potentially) multiple units or departments.  In a command and control organization the measures are by individual, unit , or department and not “end-to-end.”  These end-to-end times have a nominal value (what matters to the customer) and in command and control organizations are often ignored.

The new SPC for service needs to be Service Performance Capability using statistical process control.  What is the customer expectation around a service and how well does the service organization perform around it.  This “outside-in” approach is key to the systems thinking organization.  The command and control organization will pass down financial and performance metrics from the top-down and never consider the customer perspective.

The measures needed to achieve business improvement are concerned with the demand and flow:
Demand – The type and frequency of demand that customers put on the system.  The predictability of failure and value demand.
Flow - The capability of the system to handle demand in one-stop. If customer demand has to go through multiple hand-offs what is the capability of that demand as defined by the customer.

In future blogs I will walk through the statistical definition of capability for our new SPC system.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control thinking and terminating bad service through application of new thinking . . . systems thinking.  Download Understanding Your Organization as a System and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.

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Marriott Hotels: Is Standardization and Profit a Problem?

I am staying this week at the Marriott World Center where I have done speeches and stayed many times over the past three years.  Every other visit has been for business, but this visit is different . . . this one is the family vacation.  You know . . . wife and two kids “vanilla variety, see Mickey and Minnie, play golf” vacation.  I have almost always been upgraded at this hotel as it is a huge, massive place.  I really never needed the upgrades when by myself on business.  But now that I am on vacation with 3 others, I wanted to be sure I would get a place with plenty of room.  I requested an upgrade half expecting one and when I called a week ahead of time, it was confirmed I would get one of the big rooms.  The internet description confirmed from room details also indicated I would get this large King suite room with sofa pullout and two TVs and pool view. 

Armed with phone and internet confirmation I felt pretty confident when I strolled into the lobby on last Friday morning that my upgrade would be imminent.  When I checked at the front desk I was immediately told no upgrades were available and that the fact I was using points would get me the least of the rooms available.  WOW, Platinum elite and glad that my points were so valuable when I really needed to use them.  I was sent to the front desk training manager who informed me that I couldn’t get the room I needed until Monday (3 days latter).  I relented weary of finding a new spot at this late date.

On Monday, I checked with the front desk in the morning and the room still wasn’t ready, “but would be later that evening.”  Never happened (late that evening) and spoke again to a front desk manager who informed me that not only would I not get a suite, but that she would see what she could do for Wednesday.  I’ll let you know what happens from here.

What I have learned is that the reward points cut into the profitability of a single hotel and this is why they prefer that even Platinum guests not use their points at their destination.  Their customer management process and selection of the “lowest grade” rooms for those using points will discourage a guest from using points at their hotel in the future.  The problem is they take the value from the entire Marriott hotel network and frequent travelers talk about this stuff a lot when they speak with general travelers or amongst other frequent travelers.  The casual traveler seeks the frequent travelers opinion about destinations and experiences . . . word-of-mouth not accounted for on a balance sheet or income statement, but all the more important than all the commercials they run.

Additionally, I learned that the internet confirmation room detail sheet is a standard and in the words of one manager “not representative of the actual rooms we have” therefore the reason for my misunderstanding.  I have no other source to go to than what they represent to me on the internet.  Another failure of standardization and technology in the eyes of the customer. Customers only know the truth by what they see and hear, they can’t read service organizations minds on what is valid and what is not.  Further, these standards also inhibit the absorption of variety that customers seek in services something again not accounted for in Marriott’s customer management process.

All I can hope for is that someone from Marriott or other hospitality industry folks read this and start down the path to systems thinking the industry’s service is in a decline and they are sorely in need of business improvement that will keep them focused on the customer and not the financials.  Value before profit needs to be the mantra.

To learn more about systems thinking, download “Understanding Your Organization as a System” from www.newsystemsthinking.com or read the blogs at blog.newsystemsthinking.com.  These are free resources to a better way.

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Everyday Waste with Command and Control Thinking

OK, so my wife goes to buy a pair of shoes at Dick’s Sporting Goods.  While she is there she observes that there is a customer returning a pair of shoes bought from the another location.  The staff did not want to take the shoes back because this would show up negatively on their store profit.  From the customer perspective, they went to the other store because of a greater variety of shoe selection and had returned to this location because it was close by their home.  Ultimately, the staff member accepted the shoes back knowing that this might affect his stores numbers and might even (some day) lead to its closing. 

While doing bank management consulting, I observed the same behavior at branches.  Many banks would advertise their CD rates and calls for the CDs would go to the call center.  And instead of opening the account on the spot,  the call center was forced to send and/or transfer the customer to a branch.  This was all about the branch getting credit for the CD opening and reflected in their branch profit.  Would the customer have preferred to open the account on the spot?  No one knows for sure, because no one ever asked or looked at it from that perspective.

I am always amazed at the great waste and trouble organizations will go through to make sure that the income statements are accurate and the targets are hit at great cost and decreased service to customers.  The systems thinking organization understands what is important to the customer and then builds its system to optimize value to the customer first.  This always leads to business cost reduction and business improvement that the command and control thinker can not see.  Command and control thinkers are too busy making sure that each component is “optimized” for profit and fails to see what really matters to their customers.

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The 95 Method