Service standards worsen service

There are many examples of service standards causing bad service, I wrote about this phenomenon in ‘I Want You to Cheat’, ten years ago, but I have to say this example is extraordinary:

A friend tells me he went to a branch of a UK Building Society at 3-05pm wanting to bank a cheque. Counter staff told him that they don’t accept cheques after 3, as doing so would mean they wouldn’t meet their service standard for processing cheques in three working days. They suggested he should come back the next day or put it in an envelope in the box in the corner that they would open tomorrow.

Whatever possesses managers that they should think this way?

I think I know the answer (!)

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Management doesn’t make a difference – is management ‘MAD’?

This e-mail came from a correspondent:

Managers wanted staff to increase the percentage of calls answered in a direct sales operation. They instituted a ‘Make a Difference’ (MAD) programme and offered an incentive of £25 a month per agent. The only catch was the whole team had to achieve the target.

It appeared to work. The percentage of calls answered rose dramatically. So dramatically in fact that even the managers smelled a rat and began to wonder what was going on. What was going on, as I’m sure you’ll guess, is that agents were hanging the phone up on incoming callers, either pretending not to be able to hear them, or letting the customers come through and then just cutting them off. Some (honest) agents wouldn’t play the game and were outcast by the rest of their team.

Rather than accepting their idea was stupid, managers declared that anyone whose statistics were ‘too good’ must be cheating and therefore weren’t going to get the prize. Only agents and, therefore, teams, who got to the target but didn’t look like they’d cheated to get there, got the £25.

What happened then was (you’ve probably guessed) people became expert at cheating ‘just enough’ to get the prize.

Finally the managers (and this was some time later) abandoned the scheme. This however, wasn’t the end of the matter.

Advisors who’d been reaping the £25 a month reward were angry at the withdrawal of their reward and stopped giving the effort that they’d given before the inception of the scheme. The net result was deterioration of customer service, increased calls coming in (customers just called back!), increased cost and reduced morale.

Amazing, sad, but all too common. What do we pay these managers for sub-optimising their system? Does their job description say ‘we want you to add to costs, worsen service and damage morale’? For that is what they do.

So who is ‘MAD’?

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What stops management acting?

A story from a UK bank:

Managers discovered 5 years ago that when customers finished paying their mortgage, and the direct debit had stopped, they had failed to collect buildings insurance that had originally been sold with the mortgage. The extent of the problem was written up in a report – they had 2 million pounds outstanding in insurance premiums and they had paid the underwriters their share of that.

This year senior management asked for the same report. Now they have 5 million pounds outstanding. Managers, when discussing the report, consider the question of whether to approach customers for the deficit.

What is of no surprise to me is that the problem was created – so many of our processes are designed from the point of view of ‘what we do with things’ rather than ‘how we serve the customer’ – and IT companies have had a strong hand in that.

But what is amazing is that management did not act five years ago. Why did they not change the process? What drives their perception of how to get on?

I've got a feeling how you get on has more to do with how you are seen than what you do. What do you think? What stops management acting?

Answers by e-mail to john@vanguardconsult.co.uk please.

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Will Human Rights Act be the beginning of the end for ‘sweat shops’?

In the Institute of Management’s Guidance for Managers on the Human Rights Act it says:

‘Managers should note that discrimination is unlawful only when there is no reasonable and objective justification for it. Managers should therefore consider the aim and effect of measures which may be judged by employees to be unlawful discrimination, and be able to justify that the measures taken were in proportion to the aims sought and that those aims were reasonable’

How long before we see the launch of a class action against call centre management?

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Will call centres improve public services?

What is the logic of call centres for Public Services? Create a call centre and improve service. The government says: ‘invest to improve’.

It is an acceptance that public services are poor. And indeed they are – they are bureaucratic, administrative and designed from an internal, functional, perspective, rather than a customer perspective.

So, with money provided by government, Local Authorities create a telephone answering service as a ‘front end’ to services that did not work very well. To do this they have to give the call centre costly IT ‘solutions’. The ‘solution’ is supposed to enable the call centre staff to communicate with people who are now in the ‘back office’ processes (they used to just talk to each other). Whether the quality of what the back office gets from the call centre enables them to do what is needed I’ll leave for this moment. The questions are: ‘does the new front end improve the provision of service’? and ‘was it worth the investment’?

The answers, most often, are no and no. The back office processes are still broken and the IT spend has been significant. So now the management cry, led by government, is ‘change the culture in the back office processes’.

It is unimaginably dumb. The original problem was they had services that were badly designed. Instead of studying them to understand why, they started with a ‘solution’. They were driven to this by government propaganda and supported through the experience by IT consultants whose primary interest is selling boxes and services.

The better solution is:

1. Understand
2. Improve
3. ‘Pull’ IT

It results in less spend on IT and more value from it.

Why does the government think investment in IT will improve performance? Is it because suppliers of advice to private sector organisations have persuaded them that call centres have lowered costs in the private sector? Is this why the government slogan is ‘invest to improve’?

The evidence from the private sector is that call centres have led to high costs and poor service. Some of that evidence should be in the faces of our ministers – IT firms have ravaged our public services. I have posted a new article to the articles section of the web site – tale a look at ‘Why is Service Costing More’? in the systems thinking, general section at https://www.vanguard-method.com/v1_lib.php?current=969

I think we should spend public money on understanding, not propaganda. Please talk to your member of parliament – it’s your money.

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Vanguard Network Day

Free to Network members – November 1st, hosted by Tameside MBC, this Network day will feature Local Authority clients using systems thinning as a better way to Best Value. For information about the day and joining the Network, e-mail info@lean-service.com

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2nd Lean Service Conference

The date of the 2nd Lean Service Conference has moved from December 5th to December 11th. It will be held in Edinburgh, Scotland and will feature the following Vanguard clients talking about what they have achieved with systems thinking in their service organisations: Standard Life, Ford Credit, Lothian and Borders Police, Margaret Blackwood Housing Association, Barnardo’s and The Royal Society for the Protection of Birds. I will start the day off with ‘Systems Thinking – Beyond the Fads’, where I shall talk about the flaws in six sigma and CRM, just two of the current madnesses being foisted on organisations by managers who know no better.