CRM not designed to improve services

Last month I took a group of MSc students to a county council to do some learning (as systems thinking is best learned by doing). Having studied the work going on in the call centre, one of the students observed that the Customer Relationship Management (CRM) system was built to gather information about callers, not problems. One of the big problems in the county was pot-holes. The CRM system could tell you who called to report a pot-hole, and how many times they called, and what else they have called the council about in the past, but you couldn’t learn anything about how many people called about the same pot-hole. In other words it was of no value in solving the problem.

I have remarked before how the bulk of the work going through CRM systems is institutionalised waste (keeping records of failure demand and passing the problems around); and I have mentioned before that many managers think it is useful to be able to tell any progress-chaser what has happened to their problem (as you can access electronic records), but it would be better to design services that work. Now I can thank my student for showing me that CRM is really only a tool for the vilification of citizens.

Managing the wrong problem

Last year the regime put out guidance for local authorities on dealing with persistent complainers – something a CRM system can be used to provide evidence about. In essence, if you follow the process right to the end, you can tell people to sling their hook. Leaving aside the fact that you don’t need a CRM system to know who the persistent complainers are – they are well-known to the people who do the work – it fails to focus on the problem: why do people complain?

The answer is simple: because the services don’t work. Often complainants are told their complaint is ‘rejected’ because people are following their procedures- all that does is either heat up the argument or cause people to give up (and develop a dim view of public services). Thus most of the persistent complainers are the poor souls who don’t understand that they were supposed to give up. And ministers wonder why people don’t get involved in local democracy.

Despite it all, people try

During our week in the county council we discovered there were people who took it upon themselves to patrol an area (‘their patch’) and report pot-holes. Bless them, spending their time being responsible citizens. What a powerful resource for those who want to solve the pot-hole problem.

Latin American countries are showing how such energies can lead to vast improvements in local democratic activity. They are providing resources for people to set up businesses providing local services. It results in better understanding of local needs, a close relationship between the service provider and recipient (the citizen) and, as a result, more people turn out at elections. People know it makes a difference.

What do we do? Out-source services to private-sector providers who hide behind their contract obligations and build service factories on the assumption economies of scale will follow. At the factory level we assume (wrongly) that lower activity costs means greater efficiency, whereas in truth the services are worse for citizens and carry high preventable costs (failure demand).

At the local level we have out-sourced care provision. We told people who used to help with their neighbours’ care needs they have to become accredited, so they gave up helping. Care is now provided by suppliers according to their contract. The people who turn up are not known to the people they have to care for, and they could change from week to week.

The results of both of the above strategies are less understanding of needs, greater standardisation of service (so costs rise as the systems cannot absorb variety), less satisfaction and confidence amongst service users, more complaints (if people can be bothered) and, it follows, less involvement in local democracy, because it makes no difference.

Ministers think the way to increase democratic activity is by having citizen’s juries and customer satisfaction measures. I think they have the wrong answer.

Another one bites the dust

Ministers have promulgated the notion that access equals service; hence local authorities have been obliged to create call centres. A systems thinker who has been trying to explain to his council that they should not start by building a call centre writes to say:

“Bad news… we are getting a Call Centre.” He goes on: “I’ve been arguing against it but have been getting answers like this:”

‘Using high quality customer relationship and knowledge management systems, Customer Service Centre staff will be able to respond quickly and efficientlyto queries.’

Of course he realises that this means lots of money going out on IT that will have no beneficial contribution. The CRM system will be a repository of waste. Starting by buying a knowledge management system sounds plausible, but the knowledge required would be determined by studying demand and much of it can be established without investing in knowledge management IT, so that means more waste.

‘Currently a face-to-face interaction costs the Council £20, the same customer using a kiosk would cost only 8 pence. This saving will give us the funds to reinvest in other services.’

And he knows that no-one yet knows how to determine what services will work well in a kiosk from the citizen’s point of view. He is also aware that the regime’s agenda to create more electronic services is driven by the desire to cut costs, not improve services. If managers learned to manage value (design services that customers want) costs would fall. But going after what the regime calls ‘other access channels’ (cheaper channels) will lead to costly investments that fail to provide services.

‘There are already 370 customer service centres in local government.

We’ve taken the opportunity to learn from those already in place in order to avoid many of the pitfalls that could occur.’

And he knows they will copy the mistakes others have made. But at least they will stop getting grief from their inspectors and it might mean a few more stars. But who will be held to account for the waste of public funds, the consequential impact on services and the dissatisfaction engendered in his community?

Is the penny dropping on NHS targets?

A reader writes:

“I think that slowly, in some parts of the NHS, the penny is beginning to drop about targets, although I mainly hear this from NHS managers for whom the penny drops, and then who despair. I also have bad days, for example I recently asked someone very senior in the Department of Health whether they would drop the 18 week target once patient choice had become embedded in the system. “Targets are a vital tool to reduce waiting times” I was told in a patronising way, as if I were a 5 year old retard.”

I think he is optimistic. In one part of the country the obvious cheating going on where people are kept in ambulances to avoid starting the accident and emergency clock (target = 4 hours), the ‘solution’ has been to target ambulances on putting people in to accident and emergency within 15 minutes. In another part of the country they have realised that admitting people into hospital from accident and emergency, to avoid failing the 4-hour target, is driving up costs (hospital admissions mean £800 for the hospital rather than £80 for treating people in accident and emergency). Their ‘solution’? To agree a lower tariff for these cases.

Both examples of doing more of the wrong thing, not solving the problems.

And in the meantime the (‘lean’) tool heads are making hay in the NHS, promising that lean tools will help managers meet their targets. Last week I met an NHS chief executive who told me his tool heads were counting how many miles a nurse walks. Obviously he thought this was good work, when youdescribe this to any systems thinker the response is incredulity.

More examples of tool-head initiatives in the NHS welcome.

It started in the private sector

A reader writes:

“Last year, during a trip to China, I stayed in a hotel in Wuhan. The hotel was big and impressive from the outside, but inside it was clear that all was not right. The fittings/furnishings were in urgent need of renovation and the staff needed some inspiration/guidance as to what their roles were.

One night, upon returning to the hotel a man approached me from the shadows and held out a form – it was all written in Chinese! This guy continued chatting with me, even though it was obvious that I did not understand anything. I walked into the hotel foyer with this guy still holding out the form and chatting. I waved him away but the hotel receptionist called me over and explained that this man was in fact a hotel worker and could I complete the form? The form was an appraisal form – with boxes to tick for how satisfied I was with his service.”

Typically you find these forms are designed by managers to assess compliance (did they do as they should?) so no learning occurs about whether the service works
from the customers’ point of view. The questions are no more meaningful when they are in a language you understand, for they are not the things that matter to customers.

The reader went on to describe another example, this time health-care, where the survey asked for his view of going to the doctor’s but took no account of whether the problem he went with was solved (it was not).

While I have banged on (and will continue to bang on) about the ways in which command-and-control thinking has worsened services and alienated the service-user in the public sector, it all started in the private sector. We are all fed up with service that is no more than a smile – organisations that don’t solve problems but do so with incredibly nice ‘soft skills’. And we learn that if we get angry – as we do when we are not getting our simple needs met – we get told we will not be served because we are behaving badly.

I first noticed that ‘smiling’ had become a substitute for service in the USA, where it is a common disease. I am pleased to say this lesson has been learned by many in the private sector here in the UK. The point is simple: manage value, not costs. That means design against demand, train against demand and give the workers control, using measures derived from purpose from the customers’ point of view. Costs fall as service improves. Everyone smiles, because it works.

The two Johnnies

On February 19th I shall be speaking alongside John Darlington in what is called a “Lean Soapbox Event” at Cardiff University.

As the blurb says: ‘John Darlington and John Seddon both have reputations for being ‘anti’ a lot of things. In this unique conversation you will find out what they are most anti and find out not only what they don’t like, but also what they like. Expect strong views! Never mind what you think about me, John Darlington is a manufacturing expert who is worth listening to.

For info and bookings contact Claire Gardner: Gardnerca@cf.ac.uk

New book – publication date

I am delighted to able to say the new book on the failure of the public sector reform regime (and the better way) will be published by Triarchy Press in April.

I am coming to a place near you

In the last newsletter I asked for people to offer venues for a book tour. I am taking the arguments to the people who can do something useful in spite of the regime. I am delighted by all the offers we have had. During April and May I shall be touring the country talking about the book. We will publish dates and venues nearer the time.

Vanguard in The Netherlands

Vanguard is now open for business in The Netherlands. Our Dutch colleagues have a Process Mapping public event on March 12th and on May 29th I shall be going to The Netherlands to talk about systems thinking in the public sector.

For information: http://www.vanguardnederland.nl