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How great was Jack?
Did Jack ‘do’ six sigma?
Call Centre NVQs
The costs of poor service
The Support Economy
You have performed an illegal operation
Seddon goes to Dublin
***
How great was Jack? return to top
Jack Welch, chief executive of GE for 20 years is often quoted as a
management hero. Read what Will Hutton writes about him:
“Even before Welch took it [GE] over it had enjoyed years of sustained
profits growth… but what Welch saw was that if GE redefined it priorities to
mirror those of Wall Street it would win a star rating. GE’s business aim is
would move from excellence in engineering to excellence in financial
engineering…. His priority was cost reduction, which he achieved by massive
redundancies and allowing the R and D spend to dwindle… everything was
subordinated to ensuring that profits grew smoothly quarter by quarter.
Contributions to the pension fund were reduced… accounting conventions were
stretched… the company stood ready to buy back it own shares to ensure they
sustained a high rating, putting a total of $30 billion into stock buybacks
rather than investment in the core business.”
I recommend his book: “The World We Are In”.
***
Did Jack ‘do’ six sigma? return to top
Jack has been used as a marketing device by the six sigma providers. Their
blurb reads: “GE did it, it made them loads of money, you’d be a fool not to
‘do’ six sigma.” Regular readers of this column will know of my views on six
sigma, for new readers and those who can’t remember here they are in a
nutshell:
Too much training. You never need all those tools to solve most problems;
the training and accreditation process just makes loads of money for the
providers.
Transfer of responsibility to the line. The consultants typically do an
analysis by interviewing managers about their problems; then they train the
managers in the tools and then tell them to ‘go do it’. It is a con, for the
original analysis rarely provides knowledge. To get knowledge you need to do
‘check’ – study the ‘what and why’ of current performance as a system. It
shows you what is possible and it shows you the means to achieve it.
Managing for ‘results’. The consultants typically manage the project
reporting system and cajole the managers into reporting their successes. It
leads to ingenuity employed in both starting projects (anything you want to
do has to be called six sigma) and reporting projects – results are reported
upwards with all the distortions and elegances well known to command and
control systems.
Probability data. Probability data is flawed; it is based on a statistical
convention (data are normally distributed) that has never been shown to be
true with organisational data. This leads to the risk of treating common
cause as special cause, a big mistake in that will result in increased
variation and, hence, less control.
Other than that… I guess it must be good; so many people are doing it.
Jack showed he had been taught the probability curve, he instructed his
managers to fire the bottom 10% of performers each year. Obviously his six
sigma consultant (clearly an ass) had taught Jack this was the way to get
better people. If Jack had been taught about time series data he might have
learned that he was treating common cause as special cause. He was
terrifying the work force for things beyond their control. There ought to be
a law against it. Of course the managers, being sensible people trying to
survive in the command and control system, would just cheat. They’d hire
temporary people just to cull them for Jack.
Which brings me to the final and most important criticism of six sigma:
There is no requirement for management to change the way they think. I don’t
think Jack did six sigma, I think Jack had six sigma done to his people.
I am interested in people’s experiences with six sigma. If you are or have
been doing it and you want to pass on your views please get in touch.
***
Call Centre NVQs return to top
Call centre NVQs are the feedstuff for outsource service providers, they
think if they tell you their call centre has NVQs, they will be seen as
credible and you’d want to pass work to them. So what do we find in the
curricula of call centre NVQs? How to set targets, inspect your workers,
deal with performance problems and so on. All the stuff that gets call
centres into trouble, for the major causes of variation in performance are
in the system – the way the work works – not the workers. To treat workers
this way is to cause stress and make invisible the means for improvement.
It’s getting like ISO 9000, we should assume any outsource service provider
who trumpets attainment of NVQs is one to avoid. The same has to be said for
the Call Centre ‘Best Practice’ Standard.
I am encouraging my client to write NVQs based on the systems solution:
training against demand, methods for understanding and improving the work,
team leading as acting on the system and so on. They will catch on. As
Deming sort of said: “Money talks, eventually.” I published a systems
alternative to the ‘Best Practice’ Standard some time ago, you can read it
at: http://www.lean-service.com/4-5.asp
***
The costs of poor service return to top
A reader writes:
“Ikea have the worst customer service I have ever experienced. I had the
misfortune of ordering a kitchen from them last year and I was hopeful that
having ordered it 3 months before I wanted it to arrive that they would have
plenty of time to get my order ready and delivered on the date agreed. How
wrong can you be!
If you need to phone Ikea to enquire about your order, you have to phone
their call centre. During trying to get my order delivered I called them 27
times and experienced an average wait time of 18 minutes before speaking to
a human. Even when someone did speak to me, their procedure involved looking
up my customer details on their system, which took around 5 minutes. Their
agents then told me they had no idea what was happening and had to refer me
to a supervisor. They were not allowed to find out what was happening and
call you back. Nor were they allowed to transfer you to a supervisor
because, apparently, all the supervisors were busy (I can believe that). The
best they could do was email the supervisor who would get back to me within
48 hours. They could not put me through to a manager or a complaints
department either.
Ikea supervisors would generally phone you back within 2 to 5 days from
logging the previous call with their call centre. If you were not available
to take the call when they called you, you had to start again and phone the
call centre, who were, frankly, no help, and then request a supervisor to
call you back. To get through to someone that could help would take on
average 8 days.
The supervisors generally took some details from you that Ikea already had,
and made a promise that they would look into your case and call you back
within a day or too, in fact they even promised to phone me back the same
day once. Again after waiting a few days, all I could do was call the call
centre again, wait 30 minutes while a money takes my details and wait a few
days for another call back. One day I had 3 people from Ikea supervisors
calling me, obviously responding in an uncoordinated manner to all the calls
I had placed with their call centre. I once again told them what they
already knew but they did not let me know what was happening or why it was
taking so long - to be frank I don't think they knew! Finally they said that
the kitchen had been dispatched from the Ikea warehouse to a shipping agent
and there was now every chance that now it was out of the Ikea system I
would have my kitchen.
After 5 weeks of this (after my order was supposed to have been delivered),
I decided to ask for the address to write to the complaints department, as
they could not be contacted by phone. Two weeks after writing to them, they
called me back to 'handle' my complaint. Luckily for them my kitchen had
arrived the day before they called me, and they had no idea my kitchen had
been delivered.
I think Ikea must take the biscuit for wasting so much of their own time and
money responding to my order - it must have eaten up all their profit on my
order, especially as they had to offer me compensation for such a bad
service. It just goes to show that bad service can cost you dear. I wonder
if anyone from Ikea's management has ever looked at their system from the
outside in? Somehow I doubt it.”
I wonder if they have NVQs….
***
The Support Economy return to top
This month Radio 4’s “In Business” programme featured a new book entitled
The Support Economy. The authors claim the new economy will feature
confederations of information and service providers using intermediaries
like concierges who look after all our needs. I wrote to the producer:
“I have to say (and it is probably untrue) the authors must be backed by IT
companies, for their solution will create demand for IT as we have seen
demands created by previous management fads, for example knowledge
management and CRM.
Computers will never bridge the relationship gap. Computers only do as they
are told. The authors tell us computers will look after all our needs and
even anticipate them. To do that we would need to spend vast amounts of our
own time feeding data in to the machines, we would need decision-rules
written by ourselves and others; and that would take time and money, and we
would always fail to be satisfied, because people are people. Their vision
is one where we become dominated by technology, not served by it. It will
only serve us to the extent that we serve it.
The authors are right to assert that the century old manufacturing paradigm
is failing, this is not news. Many point to the failure of command and
control. The authors rightly point to its excesses – cheating on a major
scale. They are right to say people don’t like dealing with their service
providers and that the fundamental cause is the way the service providers
design and manage work.
Two years ago you ran a programme entitled “Why is service costing more?”
The commentators failed to get to the heart of it; service costs more
because it is badly designed. Top-down functional hierarchies damage the way
customers are dealt with. In pursuit of economies of scale managers worsen
service, but they remain unaware of the extent, for their measures keep them
blind. Cheating is ubiquitous – throughout operations, not just at board
levels – the requirement to serve the hierarchy competes with the
requirements to serve customers. Peoples’ ingenuity is engaged in survival
not improvement.
The solution is to fundamentally rethink the way we design and manage our
service organisations. The authors’ solution would subordinate our poorly
performing service organisations to a technical infrastructure that we would
be supposed to use to meet our unique, individual and special needs. Bill
Gates told us we would be using mediators on the Internet. It has
plausibility; the Internet provides so much that is rubbish from any
individual’s point of view; a mediator could alert us to things we are
interested in. But how many of us use them? Even if we did could it do any
more than we tell it?
I share the authors’ analysis but I think their solution is to create
another management factory. They themselves disparage the separation of
decision making from work but they claim we should add to the already heavy
management factory another technological and hence, organisational and
managerial level. I think we’d be better off learning how to dismantle
management factories and replace them with more productive organisational
forms.
I am in the final stages of a book on just these issues, moreover I have a
lot of evidence that a new management system works, putting people back
where they belong: managing relationships. Paradoxically it is not a ‘people
solution’, it is a design of work solution. In these solutions IT often has
to be discarded. If the authors succeed in convincing managers to follow
them there will be yet more to discard.”
I strongly recommend you encourage your senior managers not to follow the
authors’ recommendations.
***
You have performed an illegal operation return to top
Roy Madron, joint author (with John Jopling) of 'Gaian democracies:
Redefining globalisation and people-power' (another book I recommend) tells
me the Japanese have replaced impersonal and unhelpful Microsoft error
messages with Haiku poetry messages, used to communicate a timeless message,
often achieving a wistful, yearning and powerful insight through extreme
brevity. Here are some examples:
Your file was so big.
It might be very useful.
But now it is gone.
Chaos reigns within.
Reflect, repent, and reboot.
Order shall return.
Program aborting:
Close all that you have worked on.
You ask far too much.
Yesterday it worked.
Today it is not working.
Windows is like that.
Stay the patient course.
Of little worth is your ire.
The network is down.
Three things are certain:
Death, taxes and lost data.
Guess which has occurred.
***
Seddon goes to Dublin return to top
On September 16th, in conjunction with the Call Centre Association for
Ireland I am running a one day workshop on Lean Service at the Burlington
hotel, Dublin. For information contact the CCA: 1850 927827 OR
CCMA@ECOMINTERACTION.COM
Downloaded from www.lean-service.com - improve service and cut costs
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