vesterberg.se

A frustrated customer

Some weeks ago I bought an economics book that also had an useful web resource. Enclosed was a key to access the resource. It tried to use it and login, but did not succeed. I contacted the support and it took several emails back and forth to understand that the key could not be used. Since their web shop had no button to add this web resource item to my basket, I asked them how I could buy such a key. They redirected me to sales. Yet another email, this time to sales. Sales department could not find the ISBN number in their Canadian system and therefore could not give me a price. Period. That was all. How hard can it be? Here I was, a customer fighting to buy an item! I gave up.

Standardized services

This led me to think about services and their design. The above has happened many times in different situations. In the name of effectiveness and optimization I am forced to fill in standardized forms or talk to people that can handle only one type of questions. Sometimes I have to talk to an dumb automated teller without pardon. Why can’t I be guided to the right answer by a real person?

Services are designed with the assumption that 1) problems can be a categorized and 2) the customer can understand this categorization. In real life there is variety and the problem told, might be hiding the real one. What is the real result of this categorized service? People call again and ask questions. Are the customers slow to understand? Is the problem on the customer side? Should we optimize the categorization? No!

Failure demand

Service design seems to be guided by factory thinking. Usually the intelligence is put in an information system. This way, standardization can be applied by specialized service people. But this factory thinking, this system (encompassing much more than the IT system), hinders variety and create unhappy customers. It creates a demand of help or more information because of failures.

Absorbing variety

We should accept that variety is part of life and design the services accordingly. You may react: we cannot afford that! But what if the unnecessary questions, the “failure demand”, actually generate a lot of unnecessary work? This waste of time could have been avoided if the customer got all the help he wanted at first contact. Real people are the best absorbers of variety. When designing services, the workers that meet the customer should handle as much as possible and be a guide to the solution. This generates happy and returning customers.

Today I read an interesting article in the March issue of Systems Thinker. It is titled A Systemic Path to Lean Management by Thomas Johnson. He exposes the heart of Toyota’s Lean thinking and why so many have failed to follow their example.  Businesses have achieved temporary improvements, but the long term average for most of them has not been satisfying. Toyota on the other hand has managed to continuously improve their performance over a long time.

Go deeper

What is the difference? The reason for failure is, according to Johnson, that the Lean practitioners do not go deep enough and change their underlying thinking. The followers emulate, but does not see the system change needed. Most managers believe that to increase output they can manipulate the separate parts of the business operation independently. The prevalent idea is that the financial results is an linear addition of the contribution of the parts. A company could almost be condensed to, expressed in and controlled by a spreadsheet of financial results. The company is viewed as a machine.

When the management try to improve financial results, they will probably destroy relationships; the core of true business. They might have short term improvements, but the results will be devastating in the long run. This way of thinking of a company is influenced by the old concepts of Physics about mechanical processes and has been erroneously transferred to social systems.

A living social system

This is not the Toyota way, according to Johnson. They build their business as a system that itself naturally produces results. Business is most of all a human living social system, a system of relationships and improvement lies in nurturing and reinforcing the system of relationships that produces the desired results, ultimately for the customers.

Accounting

Johnson challenges the usual management accounting practises, by saying that one-dimensional quantities can only describe a living system. They cannot successfully be used to explain what is going on or used to control multidimensional interactions going on in the business. Toyota dispenses with the usual production control and accounting control for daily operation. They do it differently. Johnson says:

The prevalence of management accounting control systems in American business probably contributes more than any single thing to the confusion of levels that causes managers to believe they can run operations mechanically by chasing financial targets, not by nurturing and improving the underlying system of human relationships from which such results emerge.

This is very interesting stuff, isn’t it? Lean thinking and systems thinking, hand in hand. It deserves a closer look, especially how Toyota implements it. Does Johnson have a too idealistic view of Toyota? He continues to discuss this subject in Profit beyond Measure. This book ended up in my wish list at Amazon immediately.