Tag Archives: customer purpose

“Customer-In” Design – Best Achieved by Front-line Workers

Designing service organizations can be tricky business.  Peter Scholtes – in The Leader’s Handbook – was the first to tell us to design our organizations as a system, customer-in.  He referenced that a “product-out” mentality “is at best tactful arrogance.”  We can say that the same applies to service-out thinking too.

Front-line workers can offer any service organization insight into what is wrong with their design of service in real-time.  This move can save you big money in not having to do surveys.  Anyone interacting with a customer should know by the end of the service if the organization is performing or not.

The barrier to getting feedback for many service organizations from front-line employees are reward systems, performance appraisals and the like.  It is the false belief that good performance is derived from the individual and not the system.

Performance is not down to the individual and not to use the worker to help design the system is to miss out on a customer-in design.  Ultimately, the worker will have to use the design to deliver the service.  Why wouldn’t a service company want to use the worker to help build the design and refine it?

A good service design will involve the front-line workers in designing “customer-in.”

Tripp Babbitt is a service design architect.  His organization helps executives find a better way to link perspective to performance and use workers to build and refine your service.  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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The Secret to Great a Customer Experience

I have been reading a lot of customer experience articles and posts.  Most of it is softball stuff, lots of syrupy language and like love your customers and think about the customer experience in all you do.  Unfortunately, as I dig deeper the traditional design and management approaches make all this stuff a real yawner.  Yet, people make a ton of money telling you obvious things with speeches and writing.

Traditional approaches still are based on incentives and having the “right” data.  One is based on the flawed thinking that performance is down to the individual.  And then – of course – data is needed to figure out ways to improve the customer experience . . . bring in the IT!

Sorry folks, dead end.

Getting a great customer experience requires a better system for front-line employees to work in.  The 25 – 75% failure demand that customers experience is pathetic.  Designing the work to customer purpose and demands.  Management learning counter-intuitive truths about how system perform and that it is not down to the individual.

The fluffy and feel good customer experience gurus need more depth to what needs to happen to change the poorly designed systems.  Just using words like “seamless” and “customer friendly” advances nothing.  Some depth . . . please!

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Software Development and Outsourcing

Earlier this year, I went to India on behalf of a client that had outsourced their software development.  I met with architects, project managers, business analysts, testers and developers.  What they had to say about software development was astonishing, but revealing.

I have nothing against any country.  Outsourcing is not always bad and the worse reason to reject outsourcing is patriotism.  The reason outsourcing fails is because it is not profitable.

Say again?

That’s right outsourcing is not profitable.

So scratch that concept of less expensive software developers right from your brain.  Software requires knowledge of the work.  Not better documentation, not better analysts.  The problem is the way we have industrialized software development.

There are a number of things that don’t work in traditional software development.  Prepackaged and turn-key systems sold to customers ignore the existing system customers have in place.  There is no study of customer purpose or the customer demands placed on systems.  Instead the “better” IT system is put into place.  It is the ignorant selling the plausible to the gullible.

Further, the flow of the work is not considered or if it is considered it is automated in an inefficient or as-is fashion.  Sometimes the existing functionally separated systems are perpetuated.  No one asks if the back office needs to exist, often it can be designed out and this does not require software.

Others treat software development as manufacturing.  You hear such words as “software factory” and “production line.”  Software development couldn’t be any more different than manufacturing.  However, it has been designed with different functions, where we can than outsource the pieces like testing or development.  Economies of scale gained through optimizing the pieces and lowering costs by lowering salaries.

It just doesn’t work that way or certainly doesn’t work this way very well.  But organizations continue to follow this path to its failed destiny.  Project overruns, exploding costs for IT development, late projects and software that doesn’t work or entraps workers with poor flow.  The price of admission for this privilege is expensive.  Sign me up.

Oh, and what did that conversation with the outsourcing company produce as its biggest problem in our conversations.  They could do a much better job of developing software if they could come and see the work.

Why did you outsource again?

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 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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Why Do Companies do Reorganizations and Why they Fail

Organizations of all types look to reorganize.  But the reasons are based in assumptions with the hope that it will lead to improvement.  Less evidence exists that reorganizations actually make the business or government run better.

I have heard  many reasons why companies/government do reorganizations.  Here is a list of reasons – by no means comprehensive:

  • Recent merger or acquisition
  • To stay competitive
  • To “shake things up”
  • Realign the business
  • New strategy (or strategies)
  • Improve communication
  • Prelude to downsizing
  • Better decision-making
  • Better execution – related to strategy
  • Going global
  • Free-up creativity and innovation

Please comment if you have more to add.  The assumption is that the reorganization will somehow make things better.  After all, isn’t reorganization what a leader does in the first two years during the honeymoon period?

If you look at these reasons many are based in assumptions.  Mergers and acquisitions are many times are decisions made based on economy of scale thinking.  But scale thinking in organizations is flawed.  Improvement comes from flow and not scale.

Strategies lead to plans and the flaw here is that knowledge is needed before talking about strategies or plans.  Reorganizations are rarely based in fact about how a business will improve, they are full of assumptions about economy of scale, functional separation of duties, and how much an individual leader can affect change.

Knowledge is gained by actually understanding an organization as a system, not from what other organizations are doing or what is “believed” to be true.  This is the reason reorganizations become such incredible failures.  Even though they are often spun as being magnificent successes.  If executives only knew that basing reorganizations on flawed assumptions was a mistake they could bring much to the bottom-line.

Reorganizations don’t have to be a bad thing though.  However, they need to be based in evidence and fact.  This is gained through understanding your organization outside-in as a system.  In essence, understanding the work that creates value for customers, understanding customer purpose and then gaining knowledge about how well an organization performs against purpose.

Reorganization with knowledge of your system leads to a natural change in the roles that workers and managers do.  Otherwise, it becomes an assumptive activity that leads to an expensive failure.

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 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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Technology – A History of Increasing Costs

The problem isn’t technology alone when it comes to costs, but more the thinking behind it that increases costs.  The transaction costs are very visible and for the gullible represent quick savings for companies.  And companies laden with rewards and pressure to reduce costs “quick” is an embraceable proposition – it becomes a way to achieve instant gratification and survival in organizations.

I recently had a phone call with a technology company that assured me that IVR systems – that I loathe – were saving companies millions.  No evidence but the reduction in visible transaction costs – this means each transaction cost is lower.  Systemic or total costs are completely ignored.

No one asks about how many transactions that come in the form of customer demands are actually value or failure they just look at the transaction alone . . . not whether the transaction should have occurred in the first place or not.

Reducing failure demand (demand caused by a failure to do something or do something right for  a customer) becomes a huge area to make improvement and does not involve any IT.  As part of reducing failure demand, we are improving the flow . . . as economies come from flow and not scale.

Looking at the history of reducing transaction costs with a flawed mindset, we see that in the good old days we would get service face-to-face.  Telephony advances in technology allowed for a cost reduction in centralizing customer demands through contact centers.  Now, we have websites to reduce transaction costs and avoid the contact center.

The result has been worse service and more costs.  A natural extension of when the focus is on reducing costs . . . costs increase.

Outsourcing and shared services have been enabled by technology – couldn’t have either without technology.  However, both perpetuate the reduction of transaction costs as a form of improvement and ignore the systemic customer demand and flow that really are behind reducing costs.  The management paradox is that the transactional mindset is increasing costs in the form of lost customers and acceptance of a poor service design.

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 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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Systems Thinking . . . Even Jocks Get It!

Manning in a huddle against the Jaguars

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My Indianapolis Colts are now 0-7 for the year.  Not much to cheer about, but I did see a quote from Curtis Painter that should be a lesson to all management.

Peyton Manning has not played this year and has been an advisor to his back-up at quarterback, Curtis Painter.  In an interview with the Indianapolis Star, Painter said this about Manning’s help:

“Nothing against the coaches,” he said, “but that’s something you don’t get other than from somebody who’s been in the system. Just having someone that’s been in the offense, that’s been on the field and seen so much helps out.”

What?  There is something to actually having been there that coaches cannot understand!  Outrageous!

Management lives the life of NFL coaches.  Only those that have actually worked in the system that management has put together can have insight into how best to use it and how it performs.  Just as defenses change before a snap, so does customer purpose and demands.  The people actually doing the work have a true understanding.  Management has no context to the realities of what is really happening from a report, assumptions or theory.

Management has long been missing context and front-line workers are often perplexed bu uninformed management plans and projects that they see hurting the business.  No knowledge means bad decisions.  Better decisions can be made by relying those that can provide insight and perspective.

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 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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Want Service Improvement? Make No Assumption

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 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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Buried Deep Inside the Management Factory: Value

In my last article to Quality Digest, I gave a description of the management factory.  More often than not, the management factory has been put in place with lots of bureaucratic, non-value adding roles.  The value work has literally been buried by all the policies, rules and political BS.  Customers and front-line workers get in the way of profits.

Service organizations have lost their way.  Buried the very value that creates value and reduces costs in a sea of red ink.  Management has not a clue on “what matters” to customers.  They are too busy to bother with such menial tasks as understanding customer purpose and measures that matter.

Instead, targets are set without knowledge and show “green” on Red/Yellow/Green reports.  The problem is that what is being delivered is far from “green.”  I have too often seen managers perplexed when they are hitting their numbers, but are down-sized because the company is failing.

Uncovering value in a large service organization is not hard if you know how to look.  However, all these other pursuits of management take their time, attention . . . and add no value.

Cynical, but management has become a game of manipulation.  If you can manipulate the numbers and people.  You have a future in management.  Breaking the cycle requires leadership, not sheep.

New leadership characteristics needs to be sought.  Good looks and a silver tongue can not replace knowledge.  Knowledge does not come from a management report or a meeting with other managers.  It happens when your customer shows up, calls or emails for service.  So few in management have made the connection.  Knowledge is forever buried within and value is lost.

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 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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ISO Certified Doesn’t Mean Good or Even Mediocre

You always hope that when fads present themselves that they live a short life and leave little carnage in their wake, but you can still see organizations that are ISO certified and displaying the banner proudly.  Yes, we are certified ISO company and we continue to have the best documented processes in our industry . . . that create concrete life preservers.

Often you see these companies be more expensive then their competitors and in this case it doesn’t mean a better product or service.  The hoards of people hired to document and audit add to costs.  These costs have to be accounted for somewhere.

Redesign of the work is in order, not documenting a poorly conceived system of processes.  Many point to the benefit of seeing their system and the interactions, but few identify that this design is actually flawed and full of waste and sub-optimization.  In service, only a redesign based on customer demand will help to provision a good outcome.

Workers and managers in the work understanding organizational performance end-to-end from a customer perspective gives them knowledge.  Process improvement does not go far enough, it might give you a percentage or two if your lucky, or create more waste if you are unlucky.  The whole system design with mass-production and Tayloristic thinking is perpetuated and huge improvements are missed.

Real improvements don’t come from standardization and documentation in service.  They come redesigning our thinking about the design and management of work.

Join me for the International Deming Conference in New York City on March 21 – 22.

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.

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Those Annoying Two-Year Cell Service Contracts

BlackBerry Bold NTTDOCOMO

Image via Wikipedia

I am the guy who likes a cell phone that does what I want it to do.  Getting my email, calling or receiving calls, web and the occasional game of Break-Breaker are about all I need.  So the three generations ago Blackberry World Edition works perfect for me.

Recently, my track-ball stopped working and so I got a replacement, but not without some arm-wrestling with the sales guy that wanted me to “upgrade” to a BlackBerry Bold.  It slices, dices and probably will crawl on its belly like a reptile, but to upgrade I have to sign that stupid collusion (yes, seems all carriers have it) contract for two-years.

OK, maybe I am missing out on a camera phone (which seems to come in handy in places like Bahrain and Wisconsin).  But I am not sure I have need for 4G, which I am sure makes things faster, but why do I need faster?  This may be someones need or want, not mine.

Customer service with my current carrier (Sprint) is always entertaining and rarely good.  They say it has improved . . . haven’t noticed or heard particularly good things about any carrier with regards to customer service.  Often Sprint sends me from a “sales center” to a “service center” when I have problems with my phone.  Shouldn’t any location be a service center?

Back to the two-year contracts.  I have heard all the excuses about recovering costs and planning as the need for contracts.  Maybe if I got good service, I would want to stay.  But when you treat me poorly, I should have the option to leave the relationship, I am the consumer.

With contracts come early termination fees (ETFs) and the Utility Consumers’ Action Network (UCAN) has website on the fees charged by carrier.  It makes me wonder how much failure demand these carriers get in complaints from consumers.

It is frustrating moving from one bad carrier to another and to have to pay for the privilege is maddening.  How about improving the service first and then people won’t want to leave.  Obviously, these carriers take an inside-out approach which will cost them money or business.  A better path would be to acquiesce to these customer demands and provide what consumer’s want , the way they want it.  The first carrier that does, will win the market.

Join me for the International Deming Conference in New York City on March 21 – 22.

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.

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