transforming call centre operations

T H E VA N G UAR D GU I D E T O T R A NS F O R M I N G C A L L C E N T R E O PE R AT I O N S - L AS T U PDAT E D D EC E M B E R 2001

THE VANGUARD GUIDE TO

TRANSFORMING CALL CENTRE OPERATIONS

TRANSFORMING CALL CENTRE OPERATIONS 2001

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THE VANGUARD GUIDE TO TRANSFORMING

CALL CENTRE OPERATIONS

COPYRIGHT 2001

VANGUARD EDUCATION LIMITED VILLIERS HOUSE

1 NELSON STREET BUCKINGHAM MK18 IBU

http://www.vanguardconsult.co.uk

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission of the publisher.

Such written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature.

The Vanguard Guide to Transforming Call Centre Operations was written by John Seddon, with help from the other members of the Vanguard consulting team:

Richard Davis, Ibrar Hussain, Bridget Kelly, Matt Loughran, Steve Parry and Barry Wrighton.


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CONTENTS

INTRODUCTION................................................................................................... 6 A GUIDE TO THE GUIDE ...................................................................................... 9

PART I: WHY SET UP A CALL CENTRE? .......................................................................... 10 PART II: TECHNOLOGY AS ENABLING OR ENTRAPPING?........................................ 16 PART III: A BETTER WAY OF THINKING........................................................................30 PART IV: TRANSFORMING CALL CENTRE OPERATIONS ..........................................63

Leadership responsibilities............................................................................................................ 65 Assessment team selection............................................................................................................ 69 Conducting a performance assessment ...................................................................................... 73

Overview of method ................................................................................................................ 75 Step 1 - Understanding the nature of demand from the customers’ point of view.............................................................................................................................. 77 Step 2 - Understanding the value created for the customer by type of demand .......... 103 Step 3 - Understanding flow: how customer demand is dealt with by organisation.............................................................................................................................. 115 Step 4 - Understanding system conditions and how they affect performance ............. 150 Step 5 - Understanding how managerial thinking has led to the creation of the current system................................................................................................................... 173

Presentation of assessment findings and proposed actions to sponsor .............................. 179 Organisation survey ..................................................................................................................... 183 Redesign of measurement system.............................................................................................. 185 Direct action.................................................................................................................................. 187 Constancy of purpose.................................................................................................................. 189 Management re-education........................................................................................................... 193 Continuous improvement........................................................................................................... 195

FURTHER RESOURCES ...................................................................................... 197


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INTRODUCTION

Over the last ten years we have seen the growth of a new form of organisation – the Call Centre. Call Centres provide services1 to customers over the telephone, advances in telecommunications providing the opportunity to do so in a manner and scale not seen before. This Guide is based on our work in Call Centres in the UK, other European countries and the USA. The sectors we have experience of include: Information Technology (hardware and software service), Motor Vehicle Leasing, Equipment Maintenance, Financial Services, Telecommunications, Publishing, Leasing and Direct Sales. We have found that the principles advanced in the Guide have universal applicability. How and how well Call Centres work is the subject of this Guide; it is our intention to provide the conceptual frameworks and practical tools needed to critically review and improve Call Centre operations. The central questions are ‘by what method?’ and ‘how do we know what works?’. By what method? How do Call Centres become established and how are the rules created for how the work of a Call Centre is to be done? How do we know what works? How well do current measures illuminate how well current methods work? What measures are needed to understand current performance and ensure optimisation and continuous improvement?

1 The Vanguard Guide uses illustrations primarily from ‘in-bound’ Call

Centres – whose purpose is to provide service to customers calling in, sometimes called Help Desks. The principles also apply to ‘out-bound’ Call Centres.


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WHAT IS THE PROBLEM?

Managers know Call Centres are not working very well. The debate is now hotting up, fuelled by disappointing results. In many organisations senior managers are putting pressure on Call Centre managers to make substantial improvements in productivity, voicing concerns about rising costs. Some of the managers questioning the value of Call Centres are those who have had the responsibility of setting them up. These people, who are more junior than the decision-makers, are closer to the everyday problems. However, in our experience, many junior managers become preoccupied with working on implementing what has already been decided, and do not feel encouraged to question whether the methods are sound. Perhaps hierarchy seals the divide between strategy and operations, limiting the amount of critical discussion of Call Centre performance – how well things work in practice. All managers, regardless of level, need to question the assumptions inherent in pursuing a Call Centre strategy. The problems have occurred in all sectors, we have found the common cause to be organisation design. The crux of the issue is how Call Centres deal with the demands placed on them by their customers. The typical approach to Call Centre management employs ‘top-down’ thinking and methods that do not relate adequately to the work that has to be done. The consequence is sub-optimisation - worse customer service, inefficiency and poor morale. The recent Henley Centre study1 found that Call Centres vary enormously in their ability to deliver customer satisfaction and hence enhance or damage an organisation’s reputation. That Call Centres have earned the sobriquet ‘sweat-shops’ suggests the majority might be at risk of damaging reputations. Unhappy people are more likely to give poor service. The fundamental problem is one of thinking. The designers and implementers of Call Centres share a set of assumptions about the design and management of work which are flawed. This Guide examines the relationship between performance, organisational design and managerial thinking, taking Call Centres as the particular case. The Guide argues that how managers think about designing and managing the work is predictive of the way a Call Centre will perform, hence changing managerial thinking is the prerequisite to improving Call Centre operations.

1 Teleculture 2000, The Henley Centre, 1994.


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The current ethos of (almost1) all Call Centres is best described as ‘mass production’, it is based on the ideas of scientific management2. It is, fundamentally, an internal, production-oriented view, the consequence of which is always sub-optimisation. The better way is to design Call Centres on the basis of systems thinking; taking an ‘outside-in’ view, employing methods which focus on value to the customer rather than production. It is as Deming3 taught: to improve productivity you have to improve quality. Paradoxically it does not work the other way around. In fact a focus on productivity results in less productivity. Methods derived from systems thinking - the heart of quality theory - provide the means – better methods - for optimising Call Centre performance.

1 Aside from the Call Centres we have been helping to change, we only know of one other – in a Government Agency – that does not operate on mass production principles. 2 The term ‘scientific management’ was first coined by Frederick Winslow Taylor, he is known as the father of scientific management. 3 W.E.Deming ‘Out of the Crisis’, MIT. Cambridge MA, 1982.


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A GUIDE TO THE GUIDE

Parts I and II set the scene. Why set up a Call Centre? and Technology as enabling or entrapping? describe the usual conditions found in the establishment and management of Call Centres. As you read these chapters you will undoubtedly perceive that we have a point of view. Part III, A Better Way of Thinking, compares mass production thinking with systems thinking, showing how the former is the fundamental problem behind Call Centre design and management and how the latter provides the means to improve performance. Part IV, Transforming Call Centre Operations provides a roadmap for the transformation of a Call Centre, illustrating the steps to be taken, with case studies.


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PART I: WHY SET UP A CALL CENTRE?

There are two general reasons for setting up a Call Centre: to improve customer service and reduce costs. Improved customer service It is a widely held view that establishing a Call Centre will improve customer service, the logic being customers will have a ‘single point of contact’ with the organisation. It is a straightforward argument. If the customer can get what he/she wants with one ‘phone call including, perhaps, one hand-over to the right person, the customer will be satisfied and it will mean lower costs. We would support this argument. We have learned to think of a Call Centre’s purpose to be to allow customers to ‘pull value’ from an organisation. Good service really is more efficient than bad service. So - how well are Call Centres doing in terms of ‘single point of contact’ from the customers’ point of view? How easy is it for customers to ‘pull value’? In many organisations this question cannot be answered. In the organisations we have studied, closure at first attempt varied but was never higher than 65% and often much lower – in a financial service organisation the closure at first attempt was only 21%. Sometimes closure at first attempt looks high on first impression, but when you dig down to the detail of the workflow, you often find first impressions to be unreliable. For example, measures of closure at first attempt might ignore successive hand-overs within the Call Centre or transferring messages to another part of the organisation. As we discuss later, Call Centre managers often become adept at massaging their measures.

Call Centres vary in complexity. Retail sales, for example, is simpler than technical support for computer users. Customer expectations also vary. In our experience, customers wanting technical support have higher expectations of their requirements and are usually in some distress – their computer or other device being broken. Technical support is, of course, more complex work than responding to customers who simply want retail information, but both can be excellent service organisations if the Call Centres are designed on the basis of knowing what matters to customers and, hence, allowing customers to ‘pull value’. However, all too often, customers of Call Centres wait a long time to get an answer, are held in a queue, are dealt with by ‘busy’ agents and do not get service as expected.


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In either a complex or a simple case, the primary issue is the predictability of customer demand and the consequences for work design. Even in the most complex Call Centres, such as IT technical support, performance can be improved by an extraordinary amount if and when the nature and predictability of customer demand is known and the work is designed and managed to optimise the way customers pull value. In the best cases, customers of Call Centres feel they have their needs met. This may simply be getting a query answered, being passed to someone who can deal with their need or being involved in deciding the best course of action to meet their needs. Customers expect these common-sense things. They expect organisations to create value for them. However, in every Call Centre we have worked in, we found customers were not getting these common-sense things. The reason is, quite simply, method. As we shall see, instead of thinking ‘pull’ – ‘how can the customer pull value from the Call Centre?’, managers of Call Centres are pre-occupied with ‘push’ – who should do what for customers and how - prescribing how service agents behave at the point of contact. It is to assume that customers will expect and value the same things and that management can satisfactorily prescribe what should happen to customers’ demands. While the talk is of the need for Call Centres to ‘tailor their service to the needs and expectations of their customers’, there is little discussion about method and little recognition that ‘push’ methods - prescriptions - are not an adequate answer. Often the consequences of ‘push’ methods are a failure to provide service and increasing costs because of re-work.

Push methods are more likely to appear to work when demand can be easily predicted, when it is known that customers will only call in for a limited number of specific purposes. However, in any Call Centre, whether simple or complex, if managers are not continually attending to the nature and predictability of customer demands and continually adapting to changes, sub-optimisation is likely to occur.


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Reduced costs The other widely held view is that establishing a Call Centre will lead to greater efficiency. Placing all the resources, people and technology, in one or more specialised functions/locations will result in a reduction in the costs of providing service to customers. This is to argue for economies of scale, a feature of scientific management thinking which led to the development of mass-production systems at the turn of this Century. It would appear that the same thinking is adapting the technology of today to the same design - that of the factory. The drive for such economies of scale, it is often argued, is customer demand. Customers want longer opening hours, the costs of opening all branches (for example) would be prohibitive, so the cost-effective solution is to centralise.

How well this works – whether the economies of scale are achieved – is the question. Senior managers generally point to cost data when asked this question; they might be able to show that less people are now employed overall and usually they can show that Call Centre staff costs are lower. However, when one follows the flow of calls a different picture often emerges. It is not unusual to find the time for handling calls to have increased. Worse is the phenomenon of Call Centres creating their own traffic. Not in the sense of the M25, as managers often argue (more traffic because it is there), but in the sense of causing customers to call back, progress-chase or call with a complaint. Managers who argue increased call volumes are due to opportunity (the ‘M 25’ argument), usually have no useful information about the nature of calls, relying instead on data about volumes (alone) and managerial opinion.

In one organisation managers had planned to open three Call Centres; together it was expected they would handle all customer demand. Because of an unanticipated rise in call volumes a fourth was commissioned and then a fifth. If the managers had known that as much as fifty four percent of the demand was predictably caused by the organisation design � they were creating their own traffic - they would have avoided these costs. Concerned about the rising costs, a senior manager decided to implement a call-routing system, getting customers to do the routing work.


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If we think of the senior manager’s ‘solution’ in mass-production terms, it involves making customers pay for part of the costs of production. The senior manager assumed it would lead to a reduction in costs. However, he had no idea of the potential consequences, he could not predict the real costs – the costs of customers giving up before they get to a service agent; the costs of customers mis-routing; the costs of customer dissatisfaction. Managers are often led to this thinking by Call Centre consultants. The argument is that the call can be broken into parts. However, in every case we have studied, bar one, customers’ call-routing has resulted in significant volumes of lost calls and mis-routed calls. The consequences are a rise in operating costs and a fall in customer service. As we shall see, there are few conditions in which call-routing systems work.

When customers of an IT service organisation routed themselves to the ‘wrong’ department, they were sent to the back of the ‘right’ queue. It was a requirement of the call-routing system and ensured that the call would count on the service agent’s statistics.

The cost-management mentality of the production manager treats the management of people in the same way as call routing – something to prescribe and then control. With customers’ behaviour you can do no more than provide the best instructions you can muster and then hope they get themselves to the right place. With service agents, however, you have a lot more scope for control. Managers can prescribe procedures to be followed.

Procedures are considered to be important for their use in managing resources (treating people as machines) and hence predicting costs (the basis for planning and work measurement). Managers become preoccupied with ‘consistency’; the result is that service agents are expected to ‘follow the rules’ rather than use their judgement. Rarely, in our experience, do managers evaluate procedures in terms of their ability to create value for customers. Where procedures are unsuited to what matters to customers, the service experience always worsens and costs rise. In cases where service agents manage to maintain a customer-friendly attitude we are seeing politeness substituting for service. The customer will not be fooled.


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Working to standards, whether method/procedures (how you do things) or work volume (how many you do), usually increases costs. It is paradoxical: managing costs causes costs. We have seen abundant examples where following the introduction of a Call Centre, it takes more work to deal with a customer’s call than under previous arrangements. This problem is often exacerbated if the plan has included removing people from the parts of the organisation which used to handle the calls – now there is no-one there to handle the work. To understand the impact of Call Centre implementation on costs, managers need to know about the causes of costs: it is not familiar territory for the mass production thinker. So do Call Centres result in improved service and lower cost? In simple terms, the answer is not necessarily. As we will show, when a Call Centre is understood from a different (systems) point of view, the opportunities for improving service and reducing costs become evident. To put it another way, the sub-optimisation of service and efficiency are caused by the way Call Centres are currently designed and managed.


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Notes


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PART II: TECHNOLOGY AS ENABLING OR ENTRAPPING?

Information technology (IT) has had a central role in the advent of Call Centres. It is both a driver and an enabler; a driver because it provides the opportunity, an enabler because it provides the means. When evaluating IT’s contribution we should look beyond the fact that it is a necessity and ask how well it helps a Call Centre achieve its purpose; in other words we should understand how the technology affects service or efficiency. It is perhaps the novelty, ubiquity and conceptual fit with what managers currently believe that leads them not to question how well the technology’s features will serve the purpose. Managers are attracted to the IT ‘solutions’ on offer because they see the technology as their means of control, their means of management.

Consequently, technology dictates. It is treated as a prescription and managers are inclined to follow the advice of their IT consultants. Without technology, no Call Centres; technology becomes a panacea. The consultants bring experience of setting up other Call Centres. It is not surprising that managers follow their advice.

What can Information Technology bring to a Call Centre? ♦ Call routing. The means to route calls to available service agents whether within

a Call Centre – to groups or individual agents - or between Call Centres, geography being no barrier to technology.

♦ Computer Telephony Integration (CTI). Linking information to the call –

information about customers, products and/or services – so that agents can (arguably) meet customers’ needs more efficiently and with better customer service.

♦ Interactive Voice Response (IVR). Providing customers with the means to

route their own call. ♦ Process control. Prescribing and controlling how service agents do their work. ♦ Information. Giving managers data for decision-making.

These features appear attractive, but do they bring genuine benefits? Here we discuss each of the features and assess whether and how they can benefit or hinder a Call Centre’s achievement of purpose.


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Call routing The benefits of call routing are obvious. Quite simply, call routing enables calls to go to available resources; calls can be routed seamlessly around a building, a country or even, the world. From the point of view of maximising the use of resources this makes a lot of sense. However, when one looks at what is happening from the customers’ point of view, problems can emerge. Customers are guaranteed not to be speaking to the same person if they call twice, so calls that require continuity of any kind will be serviced less well. This problem can be solved to some extent by providing service agents with the means to create records of the customers’ queries. As call routing becomes more refined - routing calls to specific agents (specialist departments) - other problems begin to occur. While it is sensible to route calls to agents who are best suited to deal with them, in practice we find that call routing to specified agents often causes predictable volumes of calls to go to the least ideal agents. How does this happen? It is simply because the volume of (specific) demand predictably goes beyond the capacity of the available (specialist) resource. When the designated specialists are unavailable, the call is routed to an agent who is most unlikely to be able to handle it. The consequence is sub-optimisation – less efficiency, less customer satisfaction – predictably. The problem has become institutionalised in many Call Centres, it is called ‘call overflow’. Managers treat such problems as a trade-off between service and costs and rationalise the consequences as, for example, ‘opportunities for training’. Their energies would be better directed in gathering data about the predictability of demand and designing their Call Centre to service demand. Managers assume that their more expensive resources or ‘experts’, should be used in an optimal way. In simple terms that usually means keeping ‘experts’ in the ‘background’, doing only the work they are ‘best qualified to do’. The consequence, however, is ill-qualified people taking the customers’ calls, providing the customer with no value other than taking the call. While managers may point to measures indicating a reduction in costs in taking the call, no real work has been done. In quality terms, costs are incurred but no ‘value’ work has been done. The Call Centre ‘experts’ have often learned to share their managers’ beliefs; they see ‘other’ work as menial. The method of transformation (Part IV) changes this thinking.


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While we do find that managers say they know about the problems caused by routing demand to people who can’t respond to it, they rarely know the extent – the predictability of volumes and the consequential impact on service and efficiency. By contrast, we have worked on a number of examples where the solution was to move experts to the front of the call-handling process:

In a computer services organisation four ‘experts’ were able to do the work of thirty five ‘call handlers’, simply because they were more able to understand what was going on for the customer and how best to resolve the problem immediately or route it to the expertise required.

In the above case, improving the way the Call Centre understood the ‘value work’ – what mattered to the customers – improved the flow of that work. Focusing the work of Call Centres on ‘value’ and ‘flow’ improves service and reduces costs. Productivity thinking, on the other hand, equates costs with service. Managers believe they are trading-off or ‘balancing’ optimal routing with – as they see it – utilisation of resources. Closer understanding of the nature and flow of customers’ calls usually reveals flaws in the notion of balancing volume and resource. Call routing is no more than a tool, a mechanical means of distributing work. To improve the way the work is handled needs a greater understanding of the nature of the work. Call routing is the prerequisite for centralising calls, setting up the factory. However, creating the factory can lead to an increase in ‘failure’ demand – calls caused by a failure of the organisation to meet a customer need. The factory consumes resource dealing with the organisation’s waste. Costs rise and service worsens. Investing in call routing technology should only be considered from an understanding of value - what matters to customers - and flow - how call routing will enable optimisation of flow.


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Computer Telephony Integration (CTI) CTI enables customer information to be triggered by the customer’s call - the IT system recognises the customer’s number and brings up customer information. Clearly there are potential advantages in terms of time, service and efficiency. Realising the advantages, however, depends on many things; the customer calling from his or her recognisable number and the data brought forward being relevant to the transaction being two major influences. Many Call Centre CTI solutions rely on significant investments in customer databases without first addressing how and how well the information will create value in the transaction. If the technology does not improve the flow of work – and sometimes, in our experience, it makes the flow worse – it should not be used. It is often argued that CTI turns any customer contact into an opportunity to sell. This may be the case, but the idea should be tested before investing in expensive CTI systems. Similarly it is argued that CTI will improve campaigns, the customers’ history enabling better targeting of the campaign – getting agents to the right people at the right time and with the right offer. This approach to selling is no more than a refinement of the current paradigm – make and sell, it is ‘push’ marketing. Push marketing carries the unknowable cost of intrusion – the costs of customers taking offence at being approached in this way.

A financial services organisation recognised its complete failure to communicate with customers on the basis of knowledge about them. While it did have plenty of data about customers’ products, their financial situation and so on, the data were not easily accessed for use in more intelligent campaigning. They hired a firm of IT consultants to plan a new computer system that would enable them to use customer data in more productive ways. While everything they were planning sounded plausible, there was no evidence that it would work. In effect, the organisation was spending millions of pounds on a ‘guess’. We advised that they change their focus to working with one branch, taking all the customer data available and developing new methods for using it. In other words testing new campaigning ideas without investing in the total solution. This would require them to work in the branch: they were from Head Office. Clients don’t always take our advice. We’re glad they weren’t spending our money.


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While an up-to-date customer database might be a prerequisite for behaving towards a customer as though one knows what he or she has bought and why he or she has been in touch for other purposes, in any particular application the value of such information, in terms of its ability to facilitate a sale, should be tested and proven rather than taken on faith. Some Call Centres have combined CTI with call routing, automatically routing customers to the specialist who (it is argued) will have the best chance of up-selling (according to their technical know-how related to the customer’s equipment, history and likely needs). Employing such a method first requires managers to ‘write the rules’ - the IT suppliers work to a specification when designing the system. In our experience, such rules tend to be written with an internal perspective rather than a customer perspective. To know the rules that might be needed managers would need to be able to predict why customers call in - from the customers’ point of view. To what extent would human intervention be better or worse than using such rules? In complex Call Centres we have always found it beneficial to have humans intervene; service agents with the expertise to understand the customers’ needs and the ability to control how best to meet those needs.

In some organisations we have seen CTI being used to enable agents to recognise regular or priority customers. In every case we have found this is because the Call Centre fails to work for all customer demand. Recognising priority customers is being used as a way of preventing the best customers from experiencing the usual (poorer) service. For information about call type to be of value, it needs to represent what matters to customers. From that point of view the work flow can be optimised. In full, this means knowing the predictability of call type – why customers call; the value work associated with those types – what has to be done for the customer; and the flow – how the different types of demands are actioned. In our experience, these things are difficult to programme in to CTI applications. CTI has become a ‘solution’ – something which can be sold to Call Centre managers. Managers need to be reminded it is a feature, not necessarily a benefit. We have seen a large number of expensive CTI ‘solutions’ that were not worthwhile investments.


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Interactive Voice Response (IVR) Our experience has shown that customers are very unhappy with IVR systems – systems that ask the customers to route themselves by pressing buttons on their ‘phone. Many managers are claiming that customers will get used to IVR; they will learn to adapt, eventually treating IVR as normal. We have heard managers point to the way in which customers eventually got used to automated teller machines (ATMs) as supporting this claim. But does the comparison hold? Are the two the same? Once a customer has learned, whether obliged or not, to use an ATM, the result (usually) is success – the customer gets the money. The consequences of using call routing systems may be quite different, and are currently much less predictable. When customers do not get value from the transaction, losses will occur.

Our studies within organisations show that customers often find call routing systems confusing and frustrating; they have to work out what to press to get what they want and they find themselves confused about how to choose the best option(s) to take. IVR systems are established on the assumption the customer can control service delivery – how well can that be achieved? We believe it depends on expectations. Simple and predictable transactions (e.g. booking cinema tickets) are entered into with clearer expectations than complex and unpredictable transactions (e.g. dealing with an insured loss). Where a customer routing system has been sold as part of a service, customers are clearer about what they are going to experience. Call routing systems only work well when one can predict the nature of customer demand in customer terms and, as a corollary, the customer knows how to ‘control’ the service delivery.

In a Government Service Organisation, managers learned about the nature of customer demands by sitting next to service agents and listening in to calls. They found eighty or more percent of the calls to be for five simple reasons. In each case answers could be easily provided by a recorded voice. When the managers then designed and implemented their new IVR system, they kept listening to calls. While the new system worked very well, a few customers did not get their needs met. The managers listened to what was required and re-designed the recorded messages. Throughout their work and to this day the managers gave customers an early and immediate routing to a ‘live’ service agent if the customer so desired. Productivity has improved remarkably, because they learned to focus on quality � starting with the demands placed on them by customers.


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This organisation takes many more calls than it did five years ago, with the same number of staff. They have minimised the costs of transactions with customers, without diminishing value to the customers; customers are able to get what they want. In our experience, this is a rare example of successful application of IVR. In most applications we find managers focusing on internal (cost reduction) preoccupations and what is possible in technological terms. When one looks outside-in - the nature of demand and what matters to customers - one often finds the IVR ‘solution’ to be causing costs as well as, at some level, reducing costs. Some organisations have designed more blatant and non-customer-friendly ways of reducing costs. In the worst cases, organisations are creating revenue from customer queues, putting high call charges on Call Centre lines. Provided the customer perceives the service received as valuable, this may not be a problem; but if service is poor and high cost, customers will inevitably go elsewhere.


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Process control IT systems can be used to control the way service agents work. Generally, in order for the agent to deliver any service to a customer, the agent interacts with a terminal, within which there will be databases and screens (processes). When managers choose to govern these interactions with rules they should be aware that the rules will influence how the service agent behaves. It is, therefore, imperative that the rules and the IT system allow agents to respond in ways that reflect what matters to customers. However, we have seen many IT systems that have been designed from a control perspective (‘what you must do when you get one of these’) offering little flexibility to the agent. During transactions with customers, agents are obliged to say (for example) “Bear with me while I…..”. In a sense the agent is saying “Bear with me while I find a way of making this system do something it was not designed to do!.” To date, we have seen some examples of IT systems which offer the service agent the means to provide excellent customer service. However, we have also seen many costly mistakes. Two examples:

In a professional services organisation, service agents had to validate the customer before giving service; without validation the customer’s call could not be progressed. Validation relied on the organisation’s customer database - it was never up to date. The customer experienced the same routine questions every time he or she called and often had to hold for a long time while the agent solved what was, in effect, an internal problem.

In a public service organisation calls were all routed to a Call Centre. Any call requiring a response from emergency services was passed to a ‘call logger’ � someone who took the details from the caller. The customer call was then closed and the details were passed electronically to the operations room, the place where a decision would be made about who and what to send to solve the problem. The IT system provided for ten lines of text in the transfer of the information. The operations room had to ring the original caller back about forty percent of the time in order to determine the best response.


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Managers are attracted to process control because they think it will help them manage activity, reduce costs by controlling the work of each of the process steps or functional specialisms. The consequence is often damage to the flow of work. Rather than controlling processes by managing cost and activity, managers should be preoccupied with how to optimise flow, how to best serve customer demands.


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Information IT solutions provide an abundance of reports on the Call Centre’s activity - call volumes, volumes by agent and time taken to handle calls. Call Centre managers believe that these are the tools they need to manage productivity and control costs. These ‘numbers’ provide managers with the illusion of control. The reality is that management action based on these measures ensures inefficiency and poor customer service. The measures themselves may be useful, if used in a different way. To get any value from such measures managers need to bear in mind the principles of variation (see page 48). Understanding variation leads to such measures, where needed, being used in a way that facilitates learning and improvement. Typically the following measures are found in Call Centres:

♦ Call volumes (offered and answered) by hour, day, week etc.

♦ Calls per service agent

♦ Average talk time

♦ Occupancy level (percentage time on the ‘phone)

♦ Availability of service agents

♦ Service levels – time to answer calls, calls abandoned or receiving a busy signal.

These measures give managers the means to manage resource in response to volume. But they ignore the reason why customers call, how the organisation responds to the customers’ needs and, moreover, they ignore the need to identify the volume of calls caused by the organisation’s failures i.e. calls that could have been prevented. In short, these measures misguide. Furthermore, the use of these measures has been central to Call Centres earning their reputations for being demoralising places to work (see page 145).


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The influence of the IT consultant We studied a number of IT consultants’ approaches to Call Centres. All would, quite rightly, ask their clients to be clear about their purpose in setting up a Call Centre and be clear about what they are seeking to achieve. However, as the consultancy process moves from purpose to means, the consultants typically provide plans based on the thinking associated with scientific management. Here is one example:

Prior to establishing their Call Centre, the consultant asked the top management team to consider the following: ♦ What ‘quality’ would mean to their customers. ♦ What behaviour they would regard as successful. ♦ What the business objectives were. The managers, and it has to be said, with the guidance and support of their consultants, answered the first question in the following way: What ‘quality’ would mean to their customers. “The call is answered within thirty seconds and the customers get through to the right (specialist) person.” The consequence, guided by the consultant, was the creation of an IVR system through which customers had to navigate. The customers got their call answered (by a machine) and they were given the means to get to the right group, but did they get there? Later, when visits were made to customers to find out what mattered to them, the customers said they wanted to talk directly to a human being, not a machine and frequently did not know which was the ‘right’ choice for their query.

The organisation was unaware of the volumes of customer calls dropping out of the call routing system without getting to a person and the volume of customers choosing the wrong route, thus having to queue for a second time or abandoning their call.


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What behaviour they would regard as successful. Managers were asked to describe the behaviour they would like to see � what the customers would experience when the call was picked up. This was treated as a ‘resourcing’ issue � something to be costed. More work equals more cost.

The managers listed all the things they thought would like to happen.

Subsequently, they were asked to balance the ideal state with the cost of achieving it. Effectively they were being asked to determine what would be ‘acceptable’, without being able to predict the work to be done from the customers’ point of view.

The idea of an ‘acceptable’ response builds in sub-optimisation. Typically, managers enshrine sub-optimisation through work standards. It is to equate quality with costs. It is an erroneous assumption, but at the heart of scientific management. The argument assumes there is no alternative. However, a systems view would set out to establish how to improve quality such that costs fall. It focuses on value rather than standards and, as a consequence, leads to lower costs.

What the business objectives were

When setting business objectives, the managers and consultants focused on budget and the consequential measures for the functional remit of the Call Centre. Cost-reduction was the essence of the plan and, hence, the consultant’s sale. While the players � managers and consultants - talked service, they only used measures of cost.

The IT consultants stressed the importance of the Call Centre as a means to respond to individual customer requirements. This, it was claimed, would give their clients an edge over the competition. The means - how different customer demands would be responded to - were never discussed; there was never any information about the nature of customer demands and no more than supposition was provided in terms of how the IT system would facilitate the meeting of the customers’ needs. Only cost data were quantified, the cost per call being the ultimate focus of the discussion.


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The measures of cost were translated into the measures upon which Call Centre managers and agents would be judged. The IT solution produced measures of the costs of production, prescriptions for handling calls, and measures of agent activity. Sub-optimisation was just around the corner.

In summary, the features offered by IT ‘solutions’ do not always provide benefits. To treat Call Centre management as managing resource – as all IT solutions we have seen do – is to treat strategy and operations as matters of cost. When one studies what is happening to the work of the Call Centre, it often becomes apparent that costs are increasing. IT solutions are often, in practice, causing sub-optimisation.


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Notes


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PART III: A BETTER WAY OF THINKING

Introduction The problem is a problem of thinking. The methods employed in the design and management of Call Centres are based on mass production thinking. Call Centres are factories. The work in these factories is thought of in terms of volume (‘how much is there to do?’) and resource (‘what do I have to spend to do it?’). It is a top-down way of thinking about work, resulting in managers seeing their role as maximising productivity. Unfortunately the methods lead to sub-optimisation. In simple terms, the consequence is LESS productivity than could be achieved - always. Mass production methods blind managers to what is actually going on in the work, their focus being costs rather than the causes of costs. We have found Call Centres to be consuming as much as sixty percent of their resources, and occasionally more, on waste of one kind or another, the waste being caused by the organisations themselves. It is no wonder senior managers are beginning to voice concerns about rising costs. Of course, mass production thinking has a robust logic, but it is the logic of ‘make ‘em all the same’. The huge improvements to productivity that were achieved at the onset of the mass production era created a success story that everyone wanted to emulate. But the logic of management was (and is) to make sure the workers did what they were directed to do and worked hard. The design and the thinking that appreciated it were static. Management focused primarily on controlling the output and adjusting incentives as needed. The same static model has been the hallmark of twentieth century organisations and is now characterising the design and management of today’s Call Centres. It is as though we have learned nothing from a Century of experience1. Yet it is vital that we do learn and fast. Today’s organisations compete on knowledge. The speed and flexibility of customer service is dependent on the availability of ‘knowledge workers’. Paradoxically, the management of organisations by mass production principles does not facilitate the development of knowledge, being concerned instead with people ‘doing as they should’, while management, detached from the work, make decisions on data which do not provide a reliable view of the work. You often hear work in Call Centres being described as ‘dumbing down’, knowledge being assumed to be provided by IT.

1 Managers rarely question mass production thinking, despite there being ample evidence of

a better alternative. Some Japanese manufacturers developed different methods as long ago as the 1940s. Today the exemplar of these better methods is the Toyota Production

System.


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Transforming a Call Centre requires an appreciation that ‘smartening up’ is a better way to go. People have infinitely more intellectual capability than IT. Attracted by the current vogue, we now find organisations employing consultants to conduct ‘knowledge audits’. If only the managers understood how their current systems sub-optimise knowledge. We need a better way. The better way emerges from systems thinking; it is a radically different way of thinking about the design and management of work. To take a systems view of the Call Centre is to follow the work of W. Edwards Deming1. A systems view starts and ends with the customer; it is a view of the flow of work, end-to-end. Call Centres are relatively simple forms of organisation hence it is easier to grasp what this means for Call Centres than for more complex organisation forms. As we have indicated, rather than taking a view of the flow of work, mass production thinking assumes work design to be essentially static. What do managers typically think they need to know to set up a Call Centre from scratch? They think they need to know:

♦ The likely demand.

♦ The level of service they intend to offer.

♦ The level of resource required to link the level of service to the level of demand.

Starting from scratch, they can purchase this sort of information from consultants, who use algorithms or industry data to answer such questions. The consultants might also design the management information system that will encourage the belief that the only thing left for management to do is to ensure that the people they hire will work to these parameters. The trap has been sprung; management thinking has fallen into the static mould of the mass production model. The only thing that management needs now to occupy itself with is measuring and reporting on the work activity of their service agents, which the IT system will supply, and manipulating resources and incentives to achieve the ‘planned’ level of activity. This is classical top down, ‘command and control’ management thinking. It characterises almost every Call Centre we have worked in. While many managers assert the purpose of a Call Centre to be improved service, a top-down perspective leads, as we shall see, to management of internal considerations. Neither the measures of service (see page 55) nor the internal work measures employed lead managers to the means of improvement, because neither measures are sufficient in terms of understanding what goes on in the work.

1 W.E.Deming ‘Out of the Crisis’, MIT. Cambridge MA, 1982


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By contrast, a systems approach would begin with an outside-in perspective; whether and how a Call Centre will meet customer needs or demands. We have yet to witness a Call Centre being planned on the basis of a systems approach, but the questions that would need to be addressed are the same as those we have used to improve established Call Centre operations. For example:

♦ What is the nature of demand coming in from the customers’ point of view?

♦ How predictable are the different types of demand?

♦ What value for the customer is actually being created at this the first point of contact?

♦ When the demand has to be routed elsewhere how cleanly does that flow?

♦ What is the organisation’s capability in responding to the different types of customer demand?

And when the Call Centre is established, the above questions should continue to be addressed as well as asking:

♦ Are we handling what we were set up to handle, or is other, ‘unwanted’

demand coming in to the Call Centre?

♦ How does variation in demand affect service agents’ performance?

Questions like these are operational or ‘understanding’ questions, as opposed to the typical design or ‘intention’ questions that managers usually address. It is this distinction we will be exploring throughout this part of the Guide. We will illustrate the thinking and methods of mass-production within the Call Centre environment and identify their shortcomings. We will introduce better methods based on systems thinking. The two are not bedfellows; they represent radically different and opposing philosophies.


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MANAGING A CALL CENTRE - THE TYPICAL METHOD

As with any new initiative being planned in a mass production environment, the case for a Call Centre is established by financial means: then its planning and implementation is governed by the budgetary requirements of the financial plan. The tools of top-down thinking, cost and budget are translated into plans for volumes of work and required resource.

The numbers managers work with address two questions: ‘how much work is there going to be?’ and ‘how much resource is required to do it’?1

In many organisations we found Organisation and Methods (O and M) departments had been employed to plan the expected work of the Call Centre. The O and M staff calculated amounts of work expected and thus determined the amounts of resource (people) required. As the resource is planned, measures are established for managing service agent activity to ensure it meets the plan. Planned volumes and activities are translated into work standards and budgets for reporting purposes.

Managers who have operational responsibility decide the level of service that will be delivered to customers. This is typically defined in terms of how long customers will have to wait before they speak to a person, how long a service agent should spend dealing with the customer and how long the service agent should spend wrapping up the loose ends after the customer has gone. These numbers are fed, together with the volume of calls, into an algorithm that calculates the number of service agents required to deal with the forecast call volume.

Managers first learn about these ideas from consultants or Call Centre training organisations; it becomes a prescription for what is claimed to be ‘successful’ Call Centre management. The simplest representation of this recipe can be summarised as follows (see figure 1):

1 When a Call Centre is outsourced these measures become central to the contract. Typically, the

contract states the anticipated volume of work and the percentage of calls that must be answered in x seconds. In turn, these measures feed financial models concerned with talk-time and the like. The contract itself guarantees sub-optimisation.


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The objective of call centre management is to manage resources to meet service levels. Managers plan to meet their objectives as follows: Step 1 - Calculate workload: Workload = Number of calls x Average handling time.

Ring Delay Conversation Wrap up

Average Handling Time

Step 2 - Determine service objectives: Service Level (% calls answered in X seconds) and/or abandon rate to be tolerated.

Average speed to answer or average delay of delayed calls.

Step 3 Use agent handling time versus service objectives and anticipated volumes to calculate the staff required to meet the plan. Step 4 Measure changes in workload (volume) and resources (staff) against service levels. Report percentage achievement of service levels and productivity.

Figure 1: The logic of Call Centre management


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Such calculations typically incorporate either anticipated or historic (actual) numbers of calls. The technology in the computers and telephone switches allows for extremely accurate measurement of the calls ‘offered’ and calls ‘accepted’. While these types of data are necessary (but should be used in more helpful ways using the theory of variation, see page 94), what the technology is incapable of capturing is the nature or type of each call as determined by the customers. The data describe units of production, not what’s going on in the work. In consequence, the organisational ethos is more concerned with managing calls than managing customers. Call Centre management gets an answer to their ‘How many do I need?’ question but at what cost to their customers, their people and to the organisation as a whole? It is evident that things are not working out the way the Call Centre protagonists have predicted. Customers, service agents and Call Centre managers have all suffered the failure to meet expectations. In every case we have studied, expectations of the plan were not met, but managers did not know why. It is the managerial assumptions, and the system created by them, that cause the problems being experienced by Call Centre operations.


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A BETTER WAY OF MANAGING THE CALL CENTRE

As indicated earlier, we have yet to witness a Call Centre being planned on better (systems) principles. However, the questions derived from a systems approach are equally applicable to improving established Call Centre operations. The systems approach begins with an informed understanding of:

Demand - What do customers call in about? What is predictable or

unpredictable about customer demand?

Value - What matters to customers with respect to each type of demand they make?

Flow - How and how well do we respond to what matters to

customers?

Understanding customer demand. The first step is to understand what is predictable in respect of customer demand. In particular, it is necessary to understand the predictability of ‘value’ demand and ‘failure’ demand:

Value demand - What the Call Centre exists to do for customers.

Failure demand - Demand caused by a failure within the Call Centre or its host organisation to get something right

for the customer. The methods and measures associated with mass-production ignore this distinction, instead treating all demand as the same, as work to be done. Failure demand becomes part of the work: it is ‘normal’. The measures built into the IT system reinforce this blindness, locking the organisation into what might be an ineffective and costly solution.


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Value demand. ‘Value demand’ implies understanding call types in customers’ terms. Typically, this leads to a quite different classification than that which Call Centres have established for themselves:

A Call Centre for a multi-national computer maintenance company was established to deal with all European customers’ calls. An IVR system was set up for customers to route themselves to specialist groups. From the customers’ point of view their first interaction with the organisation was a choice of telephone ‘menu’ options that related to the internal structure of the organisation, i.e. Customer Menu - Key 1 for Hardware Key 2 for Software Key 1 for Printers Key 2 for PCs etc�. The statistics from the ‘phone system would tell managers the number of calls that went to the different groups but they were incapable of describing the calls from an outside-in (customer) point of view. When agents from the Call Centre studied the nature of customer demand by listening to customer calls, it became apparent that a different classification of call types would make more sense; customers predictably wanted different things from the choices assumed by the original call-routing rules. Customers’ demands were better classified by such descriptions as: ‘I want an engineer’, ‘I want to have a part shipped’ or ‘I want some advice’. Before this work was done, managers of the centre had no data that told them anything about why customers were calling. All they had was the volume of calls in total and the volume of calls into each specialist group. The customer classification of type led people in this Call Centre to optimise the different processes (‘sending an engineer’, ‘shipping a part’) so that the processes were designed from the customers’ point of view. As an aside, they disabled the IVR system � the better solution was to have an expert agree what would be the right actions (‘choices’) for the customer and then execute them.


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Almost without exception, in the organisations we have worked in, managers have adopted an ‘internal’ perspective when considering types of calls.1 Internal distinctions are no match for understanding demand and value from the customers’ point of view, which provide the means for improving the way a Call Centre works.

An IT organisation had separate divisions for ‘service’ work and parts sales. Any call to the parts sales Call Centre that required technical support and problem-solving (‘service’ work) had to be responded to by telling the customer to ring another number. Similarly callers for parts arriving in the ‘service’ Call Centre were advised to call parts sales. It mattered little to the divisional managers whether customers did as they were advised � each was focused on making his own numbers. An analysis of demand and flow showed that the majority of these callers did not follow the advice. Putting resources into the places where demand occurred increased revenue immediately; but the solution first required managers to ignore their traditional functional demarcation.

When we first discuss the ideas of understanding demand with managers, they invariably tell us they have a method of classifying call type. Generally, they ask service agents to classify a call once it has been completed. We have never found such methods to produce reliable information. The classification of calls has usually been provided to agents by their managers, and agents generally find it doesn’t work very well - the classifications being hard to apply because they have been based on internal or ‘management’ view of the work. Moreover, agents, being focused on taking calls - ‘making their numbers’ - do not complete such tasks reliably. We have yet to find a classification of type being used in a Call Centre that coincides with customer classification derived from listening to customers. Customers make demands for service (in this sense sales is sometimes a service too). To take an operational view of how a Call Centre deals with customers, you need to know what happens to customers at the points of transaction; what demands they make and how the system responds to those demands. You should take the view that you want to know how well customers ‘pull value’ from the Call Centre. If a customer’s demand is met with a response that fulfils it, and only does that, the consequence is good service at the lowest cost.

1 Consultants make the same mistake. One well-known consultancy conducted a demand analysis

with ten consultants and fifty internal personnel. How much ‘failure demand’ did they find? None - they were not looking for it. They used ‘internal’ classifications.


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It was Taguchi’s work that first helped us think in this way. Taguchi is one of the leading thinkers in the quality movement. Most of the methods associated with quality thinking were originally developed in manufacturing organisations. In the design of production methods, Taguchi challenged the idea of working to ‘standards’ or ‘blueprints’ which meant ‘working within tolerances’ and showed that setting any (nominal) value and working to continually reduce variation around it resulted in better quality and lower cost. When manufacturing goods, working to standards or tolerances means tolerating variation. In simple terms, the more variation, the more likely something will go wrong.

Taguchi explained his ideas with a diagram (see figure 2). The further any item was from the ‘nominal value’, the greater the economic loss to the system; the more things go wrong, break down or take longer to deal with. Doing more than is required, for example over-specification, is another potential loss.

Too few organisations have understood how to apply this thinking in manufacturing, although the number is growing. Fewer have understood how to apply the same idea to all transactions with customers. Figure 2: Taguchi’s loss function Think of any service you regularly

encounter. If the organisation understands and responds to what matters to you (your nominal value), you experience good service and the organisation is likely to be delivering it in the most economic way. If, for any reason, the organisation does not recognise and respond to what matters to you, your service experience is poorer and the chances are the organisation consumes more resources in resolving the situation. Unfortunately, Call Centres are, as we have seen, designed as though they were factories, using mass-production or ‘traditional’ thinking. Staff in customer-service functions are told how they are to behave. When such prescriptions ignore or interfere with the ‘nominal value’ of customers, as they so often do, sub-optimisation occurs. Failure to respond to the nominal value(s) of the customer is just one form of sub-optimisation. Worse than that, by treating work as ‘units of production’, mass production thinking ignores the nature of the work. And a major cause of sub-optimisation in Call Centres is the volume of ‘failure’ demand.

Nominal Value

smallloss

largeloss

£


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Failure demand. In our experience, Call Centres have at least 30%, and in some cases as much as 75% of calls that can be classified as failure demand. Customers might call in to say….‘where is it?’…‘you promised this but’…‘you’ve sent this but it's wrong’… ‘I’ve already called about…’, and so on. In every case we have studied we found calls into the centres that customers should not have had to make. The typical response was to manage the call as a normal part of the Call Centre operation, instead of seeing the need to treat such demand as something to be removed. In some organisations we have worked in we found IVR menus giving options for failure demand (for example, progress chasing) – it does not occur to managers that this is institutionalising waste.

A public service organisation’s Call Centre was found to have 65% ‘failure demand’. The largest type was caused by the practice of attaching all cases to specified case owners. Most calls relating to cases could not be dealt with as the owners were not available at the time of the calls. The caller had to call back, increasing the ‘costs of production’ and worsening the service experience.

Call Centres should not be ‘designed for failure’. Management’s job should be to remove the cause(s) of failure from the service delivery process. Of course, adoption of this idea has dramatic implications for how Call Centre managers - and, for that matter, all managers - spend their time. To remove the causes managers need to be able to act across organisational boundaries. But all-too-often, managers find themselves impeded by functional structures, roles and measures. Managers are often reluctant to give up their resources (people); sometimes managers are blatant about the need to keep their resources to maintain their job grading or make their numbers. Functions may succeed but the system loses.

A telecommunications service provider improved its bottom line by millions of pounds in six months. One of the actions which made a significant contribution was to find out what was predictable in terms of customer demand and re-structure the organisation to put all of the necessary skills into the Call Centre. In practice it meant moving whole departments into the front-line. The purpose was clear to all and very simple; they set out to learn how to answer all calls at the first point of contact. The leader recognised that good service would be cheaper - and it would keep more customers.


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To what extent is demand predictable? The secret to the above organisation’s success was first establishing what was predictable about customer demand. The only reliable way to establish predictability of demand is to take measures of every type of demand over time (and it may be important to use a control chart1). It is important NOT to act without first establishing predictability, for to make changes when demand is unpredictable might make matters worse. Establishing the nature and predictability of customer demand is the first step for transforming Call Centre operations. We describe the method in part IV.

Demand, value and flow - A better method for organisation design than functional specialisation In every Call Centre we have had experience of, we have found the work design to be based on the principle of functional specialisation. When what actually happens to the work – i.e. what happens to the customers’ demands – is studied, sub - optimisation becomes evident; sometimes it is extreme. In the telecommunications example (above), the volume of work being passed to the ‘back office’ inevitably caused delays, caused customers to call back and both of these things added to costs (and worsened service). Typically, in such circumstances, managers establish procedures for calls that need to go across boundaries. The work of the service agent becomes filling in forms, which is not ‘value’ work but waste, as it does not solve the customer’s problem, but merely passes it to someone else for resolution. Further waste is caused when the service agent does not (for whatever reason) give the recipient the information they need to solve the problem, which can occur for a variety of reasons. Procedures only work well when the nature of demand is predictable and the ‘value work’ – the work that needs to be done to service the customer - is always the same. This is why ‘simple’ Call Centres (for example retail enquiries) are able to exploit standard procedures – the customer demand also has ‘standard’ characteristics. Instead of being concerned with establishing and managing procedures - ‘what to do when you get one of these’- managers should start by getting a thorough understanding, from the customers’ point of view, of why customers are calling in.

1 For guidance on creating and using control charts see Further Resources, page 197.


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In some Call Centres, functions are established for handling different types of calls. Sometimes this takes the form of specialist groups, sometimes specialist levels and sometimes a mixture of both.

The management of a leasing organisation decided that customers would prefer to have one central ‘phone number rather than have to call their local branch, the rationale being that customers required longer ‘opening hours’. Management believed that it would only make sound economic sense if it was funded centrally. As management believed they understood the kind of things customers would ring up about they recruited inexperienced (i.e. low cost) staff and trained them (gave them prescriptions) in what to say to customers. This, in turn, they believed would allow them to release people from the branches (make them redundant), and free up their technical (high cost) experts to spend more time on the more complex work. Almost immediately it was found that the new recruits did not have the necessary knowledge and experience to deal with the types of questions and problem customers were calling in about. Managers then set about establishing second-level support functions. These second-level functions were defined in terms of customers’ status � new, lease in progress, end of lease, arrears and, moreover, were split by lease value. At the time of our investigation there were nine level 2 support functions and level 3 was in the process of being designed and implemented. The amount of ‘value’ that a level 1 service agent could create for a caller was limited to providing a statement of current lease details, one of the least frequent types of call.

This type of situation is more common than one might imagine. Many managers have pursued a strategy of putting ‘low cost’ agents as the first point of contact with their customers. Managers can sometimes point to ‘savings’ in terms of costs of resources (people), but they cannot see the costs they are causing. The costs only become apparent when one studies demand, value and flow - the demands customers make, the value work associated with those demands and the flow of work in responding to those demands across the organisation.


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In 1996, an IT organisation’s Enterprise Software Support organisation was redesigned using the principles of demand, value and flow.1 What mattered to customers was getting through to someone who could adequately and quickly understand their problem. In the previous organisation design the ‘specialists’, being the most expensive resource, were kept at the back-end of the work flow and the customers experienced a number of hurdles in getting through to them. Moving the specialists to the front of the flow improved the speed with which ‘value to the customer’ was understood. In effect, the redesign meant that each customer demand created its own process instead of all demand being subjected to the same process.

In a matter of weeks, service, efficiency and morale improved. The specialists had control of the work, they continually monitored demand, value and flow and took immediate action on opportunities for improvement.

The specialists in the above example had clarity of purpose, measures which tracked performance against purpose and freedom to experiment with method. In the previous design the specialists were treated as resources in functional silos, and measured by activity. Improvements in service efficiency and morale go hand-in-hand when the system - the way work works - is changed. The weakness of functional specialisation is exposed when Call Centres always receive calls that do not fit into the pre-determined categories. It is better to think about the design of Call Centre work in terms of demand, value and flow rather than functional specialisation. Here are some other inappropriate structural ‘solutions’ we have seen:

Customers of a Call Centre were given an option to route themselves to a chase group (‘press 4 if you are progress chasing a previous call’). The chase group became overloaded. Managers decided the solution to the problem was to get service agents to call customers to give them an up-date, the idea being that this would cut down customer chase calls.

1 This transformation is illustrated on ‘Change Management Thinking’, CD-ROM. See

Further Resources, page 197.


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Managers started measuring how many up-date calls agents made and compared these numbers to missed deliveries. Incentives were introduced for individual service agents to achieve up-date targets

What the managers were not doing was solving the problem in their system. To do so would have meant working across functional boundaries as the failure lay somewhere in the service delivery processes. As the problem grew worse, managers put more resource into up-dating, without which they would have failed to meet their up-date targets. Management’s focus on internal issues blinds them to the customers’ experience and, hence, the causes of costs in their organisation.

The managers of a financial services organisation had established a number of Call Centres and, as part of the justification, had cut staff numbers in the branches. To limit the work returned to branches by Call Centre service agents, strict procedures were introduced. If an agent were found returning work to a branch which, in a manager’s view, should have been completed at the Call Centre, there would be serious consequences. Often the customer wanted to talk to someone with whom they had a relationship.

The impact on customers can be easily imagined. The focus of a Call Centre should be creating value for customers. The better way to design Call Centre work is to design according to demand – why customers predictably call in – and flow – how to ensure customers get what they need in the most efficient manner. As we saw in both the telecommunications example (page 40) and the software support example (page 43), flow can only be optimised once demand is understood from the customers’ point of view.


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Act on the system - a better role for managers than ‘managing people’. Most people want to enjoy their work. How often do we hear managers express a desire for customer-driven, employee-empowered, learning and improving organisations? Ironically, managers seek recipes to create such a transformation, but rarely ask the more important question: How do the inherent principles of our current thinking about the design and management of organisations prevent us achieving this aim? It is an uncritically inherited assumption of mass production thinking that people are the primary cause of poor performance rather than the system in which they work. As a consequence, management becomes concerned with managing people and budgets. Inadvertently, managers make the system worse. The management ethic is prescription, inspection and control. The daily statistics are used to catch the front line ‘doing things wrong’, i.e. behaving in ways other than management has prescribed. When an agent is ‘caught’ failing to meet their service levels managers pay attention to them. The innovation service agents show in order to avoid grief is a testament to their ingenuity; a good system would harness ingenuity towards purpose rather than against.

Managers set standards for the maximum time for dealing with customers, if people took longer than two and a half minutes, they would be paid attention to.

Traffic lights and ‘telecasters’ are positioned around the rooms of Call Centres to tell staff how they are doing. When what they are achieving is not under their control Call Centre agents become demoralised. It is demoralising to ‘make the numbers’ when you know you are dissatisfying customers. Examples of service agent ingenuity include ‘bouncing’ callers, putting the caller through to another department, referring the caller to another number, not dealing with all of the caller’s needs and many more ingenious ideas.


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Managers seek to improve performance by helping those agents that they perceive to be ‘poor performers’. Again, there are a number of different methods adopted but common features are the use of performance appraisals, call monitoring and telephone statistics.

First-level managers in a Call Centre had been told their job was to coach service agents. A seasonal increase in demand meant customers were queuing for long periods and/or abandoning their call. What did the supervisors do? Listen to audio-tapes of service agents’ calls. They had been told their job was to ‘manage people’.

We encourage first-level managers to see their job as leading their service agents with respect to the Call Centre’s purpose. In this context, when call volumes increase managers pick up calls. However, one typically finds that first-level managers enjoy the privilege of ‘getting away from the ‘phones’ and they misguidedly relish the opportunity to appraise others. Typically, performance appraisals are used to communicate the expected performance, review training requirements and agree service agent goals. Once agreed, the individual service agent will be measured qualitatively, the team leader listens in, and quantitatively, daily reviews of service level statistics. Frequently, agent performance is put into league tables and the ‘heroes’ feted at the expense of the ‘failures’ who receive ‘coaching’, ‘one-to-ones’ or other remedial attention. The message is ‘improve or else!’. In some organisations managers cajole, threaten and even bully agents who are perceived to be poor performers.

We have found no evidence that all this effort, on the part of management, leads to any improvement in organisational performance. Rather, it leads to worsening performance. Furthermore, it consumes the majority of management’s time. In every case we have worked with, we have found differences in service agent performance to be caused more by variation in the system than variation in individual performance. Whatever the management style, you generally find the managers have failed to first establish whether the differences in performance they perceive are attributable to the agents or attributable to the system.


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Coping in a mass production environment is demoralising. Both service agents and managers are concerned to ‘make their numbers’ – make standards, targets, costs service levels and the like. However, there is always variation, in every kind of work. In a Call Centre, variation will be caused by customers, products, procedures, availability of information, knowledge of the service agent and so on. The performance of any one service agent will be subject to variation and the extent of that variation must be established before any action can be contemplated, otherwise managers can make the situation worse. Managers (and service agents) need to know whether variation in performance is attributable to agents or the system. Current approaches to people management in Call Centres ignore this fundamental fact.


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The causes and management of variation. Instead of learning from variation, managers treat variation as a problem:

“Everyone in the Call Centre industry knows that variance in agent performance is a big problem”

Phill McGowan, Chief Executive, ISV Group. Writing in Business and Finance, April ’98.

Because Call Centre consultants and managers of Call Centres generally believe that variation in performance is wholly attributable to differences between agents, current methods for dealing with ‘variance’ don’t work very well. They treat people as part of the problem rather than part of the solution.

Figure 3 shows a Call Centre service agent’s work activity every day for twenty days, plotted in a control chart.

102030405060708090

100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

SalesAverageUCLLCL

Figure 3: Call Centre service agent’s calls taken by day

The control chart shows that we can expect the service agent to take as few as twenty and as many as ninety calls on any one day. The variation is caused by the service agent’s system.


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What are the causes of variation?

Customers � no two customers are the same Products � no two products are the same

Procedures � can inhibit efficiency and service Information � helps or hinders

Calls � ‘value’ work or ‘failure’ work

Figure 4: Variation caused by the system – some examples

Most managers look at such a chart and express either disbelief or panic. Their attention is always drawn to the lower limit - they are terrified at the prospect of all service agents taking as few as twenty calls. This is only because they do not, as yet, know how to interpret the chart. The chart simply illustrates that the variation existing within the observations (numbers of calls per day) would lead one to expect values as high or as low as the limits. Most, however, would occur around the mean.

In ignorance of this fundamental understanding, managers set work standards and police peoples’ performance. If the work standard is set at a high level, say seventy calls, service agents may only be able to achieve it by ‘cheating’. And they do; they do all they can to avoid missing work targets or standards. Not bad people, but a bad system. Being pressured to behave this way causes demoralisation. Most people in customer-contact jobs want to serve the customer.

When the work standard is set at or around the mean, say fifty five calls per day, the service agent’s life is a lottery. The inescapable variation in performance means sometimes you win, sometimes you lose. Many service agents, however, believe their managers’ accusations that ‘failures’ are down to them; they go home, having lost the ‘lottery’, yet believing it was their fault. The psychological damage is incalculable. When the work standard is set at or around the lower limit, say thirty calls per day, people relax – they seek to avoid tyranny by doing what is necessary. If the regime has previously been harsh, service agents will discourage colleagues from ‘over-achievement’, for it will result in higher targets. Knowing they are not contributing as they could is a further cause of demoralisation – it is no fun to work this way.


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As the management ethic is to maximise productivity, managers do whatever they believe will assist achievement of that aim. However, many of their actions - establish procedures to be followed, coach individuals, establish competitions between teams or individuals - can actually decrease productivity. Managers (mistakenly) employ competitions to ‘motivate’ service agents. When the largest causes of variation are attributable to the system, the competition is a lottery. Despite or perhaps because of that, service agents distort their work activity to win prizes. A whole industry has grown up giving advice on competitions and motivation in Call Centres. Competitions result in LESS productivity1. Because service agents learn to ‘cheat’, the consequence is greater variation in performance and, worst of all, poor quality service. By contrast, when managers and service agents work together on the causes of variation, performance and morale improve for there is a constructive dialogue about what is going on in the work. Treating people as part of the solution, rather than part of the problem The question is - how to find the point of greatest leverage for sustained improvement? To find out, managers and service agents need measures in control charts, taken over time, to establish the extent of variation attributable to agents and the extent attributable to the system. Variation attributable to differences between agents will indicate managers need to help agents with method, knowledge and the like. Variation attributable to the system will lead managers and agents to identifying the causes and acting on them, for example removing ‘failure’ demand, improving support information and so on.

A first level manager of a Call Centre took service agent data (call duration) and plotted it over time. She found three distinct groups � ‘fast workers’, ‘medium-paced workers’ and ‘slow workers’. She then listened in to each group’s calls. Over time she learned that the ‘medium-paced’ group was the best in terms of solving customer problems � they had, for example, the least call-backs. Subsequently she worked with all three teams to surface the differences in method and encouraged the teams to adopt the methods of the 'medium-paced’ group. Productivity went up and customer service improved.

1 For a review of the evidence see: Kohn, A ‘Punished by Rewards’, North River Press, NewYork, 1993


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A less thoughtful manager might be inclined to make the performance of the ‘fast workers’ the work standard for all. A recipe for worsening service and efficiency. Customers’ problems are customer shaped and although many types are predictable the solutions - i.e. the time taken to create value - can be subject to variation. The agent’s talk time depends on the nature of demand, not the volume of demand alone.

Typically, failure demand takes longer to deal with than value demand - it takes longer to find out what has gone wrong and put it right than it does to deal with a call that fits neatly into the system. If a service agent happens to get a lot of failure calls, their statistics will not look as good as those of a colleague who has received all the easy calls. As the call distribution system cannot judge call content these sources of variation are beyond management’s view.

Management ‘cheat’ too! Productivity tools are blunt tools. They are no more than assumptions based on measures of volume and cost. Senior managers set the targets and Call Centre managers are judged by their ability to meet them. Of course the major influences on performance are often beyond the Call Centre manager’s control as well as beyond his or her perception. To survive in such an environment, managers act in ways that often cause further sub-optimisation. These are typical examples of how inventive managers can be in meeting their own goals.

The managers of a Cable TV call centre had a target to pick up all calls within 30 seconds. Their solution was to ‘gate’ the number of calls offered to service agents. Most customers would, therefore, receive a ‘busy’ tone. The managers experimented with the queuing level until they ensured that new callers would only be ‘let in’ if an service agent was able to take the call within thirty seconds. The managers made their numbers.


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Another manager adopted a different strategy:

Service agents were thought to be taking too much time in ‘wrap up’ � the time spent completing work required by the customer’s call. The manager simply reduced the length of time service agents were allowed to spend during the wrap up phase of a call. However, because the customer demands were complex and the IT systems did not work easily with respect to the typical call flow, service agents needed plenty of time after each call to fill in all the necessary fields and update customer details on the data bases.

The only option open to the service agents was to leave out some details taken during the call. One of the most time consuming system activities was checking and confirming address details, most customers had many sites across the UK. Instead of typing in the site details they simply opted for the head office address. As a result, orders were delivered to the wrong location and the customers had to make a chase call. However, the manager made his numbers and received a bonus!

A system perspective: A better foundation for effective management The better way of managing is to act on the system. To think of Call Centres as vehicles from which customers are enabled to ‘pull value’ is to change the focus of management from managing people - ensuring people are doing as they should – to managing the system – understanding and improving how well the work flows, end to end, to fulfil the customers’ need. After all, the major causes of variation are in the system, not with the service agents. If a customer’s experience is that he or she was immediately able to ‘pull value’ from the Call Centre, they will be happy and the organisation will be providing the service at the lowest cost. That should be management’s focus.


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In one Call Centre, the new chief executive, who had a passion for customer service, started a transformation by firstly ensuring all calls were picked up. The Call Centre had been running with an abandon rate of about 35%. The chief executive knew that if they could pick up all the calls, the volume of calls would drop. He had seen it before. Whenever a Call Centre answers all demand, the volume of demand drops. Simply because there is no longer any repeat calling. Having picked up all calls he then set about understanding the causes of calls � what calls were due to customers needing services, what calls were due to a failure of the organisation to do something. He saw his Call Centre managers’ work as understanding demand and value and hence optimising flow.

In another example, a manager broke the mould of the traditional design only to have it re-imposed by those who thought they knew better.

The manager of a retail sales Call Centre studied customer demand, value (what mattered to his customers) and flow � the processes for every type of demand. He learned what many managers learn from such an exercise; the work measures, procedures and so on were causing errors and waste. He removed the standard work measures for individual service agents and instead established measures of variation. He worked with his people to change their work processes to better match customer demand - he worked to remove causes of variation. Then his organisation was taken over by an American retailing giant. The ‘experts’ from head office arrived and insisted he return to individual work measures and standard work processes. Apparently head office wanted to ‘bench mark’ operations around the world. Head office ‘experts’ showed no interest in the reasons for improved service, efficiency and revenue in the UK operation. Having experienced an improvement in sales, efficiency and morale, the managers watched as their Call Centre reverted. Morale declined, everyone involved in the transformation resigned.


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Management’s job: act on the system The managers in the two examples above had learned to act on the Call Centre as a system. The extent of sub-optimisation - how the Call Centre fails to respond efficiently to customer demand - is exposed when managers learn to take a systems view. Taking a systems view is to look outside-in and to understand demand, value - what matters to the customer) - and flow. To improve service and reduce costs managers need to know the nature of demands made by customers and the value (to the customers) explicit or implicit in the demands, and the means (flow) by which the organisation currently responds to those demands. Understanding demand, value and flow are the first steps in transformation. When managers take a systems view, they see the value of changing their methods for the planning and management of Call Centres; they see for themselves the sub-optimisation caused by their current methods. Furthermore, when managers take a systems view, they see the value in creating measures that relate to purpose. By improving performance against purpose, they optimise revenue, service and efficiency. By improving quality, they improve productivity. These more useful measures also make sense to service agents. The service agents call also make use of the measures to control and improve their own performance - measurement being the crux of self-management. By taking a systems view of the design and management of work, everybody becomes capable of contributing to improvement.


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Understanding customers: knowing what matters, rather than behaving ‘contractually’ Despite the admirable sensitivity to customers that the majority of agents display and the good intentions of the supervisors and managers who staffed the Call Centres we have worked in, the clearest demonstration of the influence of traditional thinking is the covert attitude to its customers. Mass production organisations exemplify a contractual attitude to their customers, service is thought of in terms of service guarantees, service levels and the like. Many organisations put an ‘entitlement’ step at the front of the call process. The purpose is to determine whether service should be provided to the caller. Sometimes this step also provides a reference number to the caller should they need to 'chase' the call. However, any failure for example in contracts administration, to enter customer details will lead to customers entitlement details not being available on the Call Centres service agents’ call logging system. In one organisation, this problem was so wide spread that the managers decided that a second level service agent was required. The job of second level agents was to deal with all the difficult calls and callers. They were to search all the company data bases to establish if the caller was ‘valid’. Customer satisfaction measures In traditionally designed Call Centres, customer satisfaction surveys are most frequently of the ‘how was it for you?’ type. They might include ‘did they do as prescribed?’ questions and ‘what was important?’ as well as ‘how satisfied were you?’. In most Call Centres, customer satisfaction measures usually have the following characteristics:

♦ Managers (or consultants) write the items.

♦ Customers are asked to rate these chosen items.

♦ The data are sent down the hierarchy with ‘commands’ to ‘fix’ things.

But the data rarely say much about what matters to customers. They often lead managers to inappropriate actions. But the managers are obliged to report that they are taking action. The actions taken (if taken at all) rarely improve operations.


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In a similar vein, Call Centre organisations are making abundant use of Mystery Shopping.1 A mystery shopper is someone who pretends to be a customer; he or she measures the ‘mechanics’ or ‘prescriptions’ as set by managers. None of these methods reliably finds out what matters to customers. Instead they produce data which causes managers to ‘command’ changes. Little can be changed (predictably) for the better without knowing more about what is going on. Organisations justify what they are doing. They send communications saying: “We are meeting your need by setting up a Call Centre….” “It will give you a better service”… When customers complain they receive standard replies saying things like: “Look at the volumes we handle successfully and look at our customer satisfaction rating – 85% satisfied or very satisfied” Of course that means 15% less than satisfied. The managers of Customer Service (Complaints) Departments write to complaining customers explaining how the customers should recognise they had been ‘unlucky’. The managers would be of more value to the system if they learned more about what predictably creates ‘bad luck’.

1 Further explanations of the flaws of Mystery Shopping can be found on ‘Change Management

Thinking’ CD-ROM - see Further Resources, page 197.


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Creating value for customers

An informed understanding of the type and predictability of customer demand enables managers to address the question: ‘How good is the Call Centre at creating value for the customer?’ The whole philosophy of Call Centres should be to make ‘pulling’ service a customer-friendly experience. We have already seen how the failure to understand demand from the customers’ perspective reduces the Call Centre’s ability to optimise that purpose. Matters are made immeasurably worse for the customer by the fact that Call Centres provide no continuity of relationship - anyone might pick up a customer’s call. In many cases we found issues requiring continuity exacerbated by functional boundaries; it means customer service is translated into passing a message and hoping that the recipient will respond before the customer acts again. In many organisations managers attempt to force customers to use Call Centres by re-routing or closing the numbers customers are used to ringing. When people who work in those parts of the organisation affected have problems with their customers, they (naturally) give out their personal number. It is the right response to the customer, but it defeats the purpose of establishing the Call Centre in the first place and it hides problems with the way the Call Centre is working. An understanding of demand and value to the customer would enable Call Centre managers to predict the likelihood of calls requiring continuity and revise (improve) the design. What customers want is to call someone who can deal with their need or to be passed to someone who can. To be told someone will call them back or to be passed around and held while service agents seek information from within their organisation worsens service and adds to costs. Whether the Call Centre is simple or complex, it should be designed to deal with customer demand.

The solution begins with changing the way managers think. Mass production thinking is flawed, managers need to know why. The best way to learn is to find out the extent of sub-optimisation caused by this thinking in their own case. For that reason the first step in transformation is to understand the ‘what and why’ of your Call Centre’s current performance. Before we begin the steps to transformation, we will reflect on why it is that Call Centres earned the sobriquet ‘sweat shops’.


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Sweat shops are nothing new… Consider the following. These are quotes from assembly line workers who worked in mass-production organisations in the 1920-30's1 :

"We had a certain number of parts we had to assemble each hour. You had to do it. No sooner had you finished one part then another one arrived. No stopping allowed. The worker was just like a machine. At one time we were assembling 100 parts an hour. Then the management decided to up the pace and we had to do 110; then 120. Inevitably things snapped. We'd had enough. We weren't machines."

"On the job we worked, how we'd work! You couldn't go for a smoke. Even when a man went to the toilet they'd check to see if he was genuine." "You had become an animal. Worse than a plain chunk of meat. You felt complete frustration and isolation."

The same is being said by Call Centre service agents today. Call Centres have variously been described as sweat-shops, concentration camps, school rooms, joke factories and the like. The alienation has a simple cause, work measurement. It assumes the worker to be a machine. Paradoxically, this drives productivity down rather than up. We have arrived at the age of the knowledge worker yet in Call Centres many workers effectively are asked to leave their brains at the door.

1 "PEOPLE'S CENTURY, 1924 On the Line." The video of this programme is available

from PBS: http:www//pbs.org


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So why are Call Centres ‘sweat shops’? People who work in Call Centres are demoralised. Why? There are a number of inter-related reasons: ♦ Measuring call activity ignores variation. People can 'lose' what is, in effect, a

lottery - they can get adverse work measurement numbers when the causes of variation are outside of their control.

♦ Managers pay attention to people for the wrong reasons. Being unaware of

the extent of variation attributable to the system, and the extent of variation attributable to service agents, managers pay attention to people when they should not and they do so in inappropriate ways. Service agents feel as though they are obliged to put up with this sort of (inappropriate) management attention.

♦ Managers are focused on internal issues. Managers are primarily concerned

with matters of productivity. As a consequence, service agents lose sight of their purpose and managers become out of touch with opportunities to make significant improvements in productivity.

♦ To survive in such an environment, people often learn to 'cheat'. It is the

only way to avoid adverse criticism. When people have to cheat to survive they are further demoralised. Most people want to do a good job; they know what they are doing is wrong but they feel they have no choice.

♦ Managers focus on the people and not the work design. Call Centres have

thus become ‘sweat shops’ and are characterised by high levels of demoralisation and high staff turnover. This is very expensive and customer unfriendly. Without exception Call Centre managers have asked us how to ‘get more out of their people’, ‘cope with poor performers’ and ‘keep the good performers motivated’. These were all symptoms of poor design and wrongly focused management activity. We taught them instead how to act on the system.


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In summary, the causes of demoralisation are to be found in the design and management of the work. In this Guide we have distinguished between mass production and systems thinking:

Mass production thinking

Systems thinking

Top-down

Perspective

Outside-in

Cost Planning Value

Functional specialisation,

management to control; focus on

productivity

Organisation design Demand and flow, management to add

value; focus on optimisation

Manage standards, budgets and people

Management ethic

Act on system

Contractual

Attitude to customers

What matters?

Figure 5: Mass production versus systems thinking

To improve service, efficiency, morale and hence productivity, you have to take a view of a Call Centre as a system. To do this in a way that changes the culture and creates knowledge workers of Call Centre staff requires that service agents are central actors in the change process. Which leads us to our road map for transformation.


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Notes


62

Notes


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PART IV: TRANSFORMING CALL CENTRE OPERATIONS

In this part of the Guide we will illustrate the Vanguard methods for transforming Call Centre operations. On the opposite page, figure 6 provides a route map. The Guide will follow this route, illustrating the steps to transformation with three case studies: ♦ Finance Co. is a Call Centre within the banking division of a financial services

organisation. ♦ Break Fix Co. is the Call Centre of a computer maintenance organisation. ♦ Phone Co. is a Call Centre for the mobile telephones division of a multinational

telecommunications organisation. In each case the same method was applied, but in slightly different ways. While tactics varied, the principles remained the same.


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Route map for transforming Call Centre operations

Do you really want to do this?Leadership responsibilities

Assessment team selection

Assessment team briefing

Performance assessment -demand, value, flow, measures

& management

Presentation of assessmentfindings & proposed actions

to sponsor

Direct action - redesign Redesign of measurementsystem

Constancy of purpose

Pilot through to production

Continuous improvement

Management re-education

OrganisationSurvey

Figure 6: Route map for transforming Call Centre operations


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Do you really want to do this? Leadership responsibilities





& management


to sponsor






OrganisationSurvey



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Leadership responsibilities 1. Pre-assessment: ‘This means me too’

Before the work can start, the top leader needs to be prepared to accept that ‘the better way’ might be a challenge to his/her current beliefs and, hence needs to accept that he/she may have to change too. The underlying assumption of the Vanguard approach is that it is the relationship between thinking and performance that is at the heart of change.

Thinking

System

Performance

Figure 8: To change performance you have to change thinking Leaders have created the organisations as they are today and hence they need to be prepared to consider that their thinking - about the design and management of work - may be flawed. Leaders take a greater interest in different methods of work (and, as a corollary, different thinking) when they become dissatisfied with what they ‘know’ – when they learn for themselves how what they have believed doesn’t actually work very well. To change performance, one has to be prepared to change the way one thinks. To help your top leader (assuming he/she has not bought this Guide) you will need to prepare a discussion of:

♦ Mass production versus systems thinking – its relevance to Call Centre operations in general and your organisation in particular.

♦ The steps in the route map.

The reader may be hoping for a script or the like, but we hope you will appreciate that you will do a better job of it if you have prepared yourself. The material in this Guide should be sufficient, but if you need more discussion of mass production versus systems thinking see “The Vanguard Guide to Understanding Your Organisation as a System” or “The Vanguard Guide to Business Excellence”- see Further Resources, page 197. Alternatively, you could use a Vanguard consultant to help you prepare and facilitate this discussion.


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The decision to transform a Call Centre is not a decision that requires consensus amongst the senior management team. Involving the members of the senior management team in the decision to commit to this route predictably encounters vested interests and other, political, factors which get in the way. To get movement, the top leader has to decide that the work will be done. Other senior managers become involved at later stages (Constancy of purpose, Management re-education).

2. During assessment

During the assessment, the role of the top leader is to remove barriers or obstacles which may prevent the team gathering the assessment data and to stay in touch with the team on an informal basis. The leader must recognise and support the principle that the purpose of the performance assessment is to get valid data about the ‘what and why’ of current performance. The leader should ensure that no access is denied to the assessment team.

3. Post-assessment

The leader must champion the use of the data to make informed choices and in doing so, lead changes in the Call Centre operations, amongst both service agents and managers.

There is no change without leadership. If the top leader does not understand his/her responsibilities through the process of change, and act accordingly, the change will be less likely to be successful.


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Notes


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Assessment team selection.





& management


to sponsor






OrganisationSurvey



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Assessment team selection. The analysis of the current system needs to be conducted by a team of people who do the work. This means front-line people, not managers. The analysis is an intervention, the team will talk to their colleagues and hence influence them as the work progresses. The selection of the team is crucial to an effective intervention. The following criteria should be used:

♦ People who are respected in and beyond their own position. ♦ People who are representative of the core work process(es). ‘Core process’

means any process that has direct contact with customers. ♦ People who show vision and flexibility, which may, at times, show as

constructively ‘unreasonable’ behaviour. ♦ If all of the above are satisfied, you can add a well-known cynic.

These criteria will ensure that the analysis team is composed of ‘opinion leaders’. The number of people in the assessment team will depend primarily on the second criterion. We find six to twelve people to be the usual range. When selecting team members, ensure that both they and their managers are aware of the time commitments and involvement that is required. In our experience, the assessment work will take up to a month, depending on the complexity of the operation. If you are short of resources remember it is vitally important to achieve a reliable understanding of the ‘what and why’ of current performance. Take whatever time is needed. An unreliable assessment will lead to unreliable decisions.


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Briefing the assessment team.





& management


to sponsor






OrganisationSurvey



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Briefing the assessment team The purpose of the team briefing is to prepare the team to conduct the performance assessment. The team needs both a conceptual understanding of what it means to understand organisations as systems and a practical understanding of what needs to be done in the fieldwork. You should expect to spend two days briefing a team for a performance assessment. The content of the briefing should include:

♦ The team’s role, and what is expected of them. ♦ Understanding the differences between ‘mass production’ and ‘systems

thinking’. ♦ Generating first impressions of how this distinction might apply to this

particular organisation. ♦ Understanding and relating the theory of variation to demand and flow. ♦ The importance of understanding ‘what matters to customers’, i.e. ‘value’. ♦ Exploring the relationship between management behaviour - what gets paid

attention to - and performance. ♦ Conducting the performance assessment - method. ♦ Agreeing who goes where and what is to be done to complete the

performance assessment.

The briefing needs to be both opened and closed by the top leader, who is the sponsor for this work. The purpose of having the top leader open the briefing is to give the intervention a context, so that the assessment team can see how critical their role is in the process. The leader needs to acknowledge the need for change and should emphasise the importance of starting change with a thorough understanding of the ‘what and why’ of current performance. The purpose of the leader’s closing the briefing is to listen to the team’s first impressions - there should be no firm conclusions prior to the fieldwork. During their briefing the team will have been stirred by a variety of new perspectives and will want to know that the top leader is interested in pursuing these lines of enquiry. The team might also be worried by practical issues, for example, being free to give the time required to perform the assessment; they will want to see that the top leader is committed to ensuring it is to be treated as important. The material in this Guide should be sufficient to source material for facilitator(s) to prepare and run the briefing. If you need more contextual help, consult ‘The Vanguard Guide to Understanding Your Organisation as a System’ and ‘The Vanguard Guide to Process Mapping and Analysis’ - see Vanguard Resources, page 197. Alternatively, a Vanguard consultant can be used to help you prepare and/or run your briefing.


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Conducting a performance assessment





& management


to sponsor






OrganisationSurvey

Figure11: Route map for transforming Call Centre operations


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Notes


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Performance assessment Overview of method

points oftransaction

customer

demands

systemconditions

managerialthinking

flow throughthe systemvalue created

for demand

IVR

3

5

4

2

1

Figure 12: The Vanguard model for check The Vanguard model for check1 is the generic model we have been using to understand organisations as systems. It assumes that service organisations succeed or fail according to the transactions they have with their customers. We think of ‘check’ as establishing the ‘what and why’ of current performance. In our experience this is a prerequisite of effective change. When you know the ‘what and why’ of current performance you can see what improvements are possible and you can see what needs to change to realise the improvements. The Vanguard model summarises the five core steps of a performance assessment.

1 This model is explained in more detail in ‘The Vanguard Guide to Understanding Your

Organisation As A System’ - see Further Resources, page 197.


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1. Demand

The first step is concerned with understanding the nature of demand, in customer terms. Customer demand in a Call Centre may occur direct on the telephone, through an IVR system, by mail, e-mail, fax or via the internet.

2. Value Associated with demand is ‘value’ – what matters to customers. The second step is

focused on establishing the current value created for customers for each of the different types of demand.

3. Flow The customer demand may be dealt with at the first point of contact or it may ‘flow’

elsewhere. This step focuses on understanding how and how well the value work flows through the system.

4. System conditions The ease and efficiency with which the value work is executed is dependent on the

system conditions that govern performance (for example, measures, work design, information and so on). Hence, the fourth step is concerned with understanding the ‘why’ of current operating performance.

5. Management thinking The primary driver of system conditions is managerial thinking. Changing

management thinking is thus the key to improving performance. The fifth step focuses on getting the data of how and where management thinking needs to change, in order to improve performance.

The team need to establish the ‘what and why’ of current performance. They will need to work through these five steps. The following pages take each step at a time and show you: ♦ why it is important ♦ what to do and how to do it ♦ examples or illustrations from the case studies


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Performance assessment Step 1 - Understanding the nature of demand from the customers’ point of view.


customer

demands

systemconditions

managerialthinking


for demand

IVR

3

5

4

2

1

Figure 13: Understanding the nature of customer demands

Customer demands - why start here? The first step in transforming Call Centre operations is to understand the nature of customer demand and for each type of demand understanding what matters to customers. The ultimate focus of the change will be to design processes capable of responding to customers’ demands; responding to customers’ ‘nominal values’ to use Taguchi’s term (page 39). It is unwise to assume that what is currently prescribed is what customers want.

Remember, if an organisation delivers what matters to a customer and only that at the point of transaction, it will be performing in the most economic way.


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In order to establish the nature of demand from the customers’ point of view, this step will take you through: What to do - understanding type and frequency of demand How - understanding and classifying demand by type - moving from type to frequency - establishing predictability of demand - classifying demand in terms of value and failure - validating the data

Type and frequency of demand. To understand the types of demand customers place on a Call Centre, you have to listen to calls. Having established type, the team will be able to do two things; establish predictability – how predictable is each type of demand – and establish value - ‘what matters’ to customers - for each type of demand (see later).

Managers often do not believe customer demand is predictable; in every case where we have helped organisations analyse customer demand, it has been shown to be largely predictable.


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First things first - where to start Working with the assessment team: ♦ Map the points of transaction with the customer – where does demand come in?

Is demand direct ‘over the ‘phone’, through an IVR, by mail, fax or internet? ♦ Ask: “What do we know about the type and frequency of demand?”

− what different types of demand are placed on the Call Centre at each point of transaction?

− roughly (for now) how many of each type of demand? The object of the team’s fieldwork will be to get reliable information on the type and frequency of customer demand at each point of contact or transaction:


customer

demands

IVR

differentfunctionsor groups

1

Figure 14: Demands into a Call Centre


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Finding out about TYPE The most reliable method for understanding the types of customer demand is sitting with the people in the front-line of the Call Centre, the service agents, listening to customer calls and noting what customers ask for. It is essential that the type classification is defined in customer terms – what is the nature of this ‘need’, this transaction or this ‘problem’, as far as the customer is concerned? It is, for example, a common mistake to use ‘internal’ criteria to classify demand, based on how the demands get dealt with. For example, customers of IT service Call Centres may be assumed to be ‘phoning for hardware or software reasons or the temptation may be to classify calls by product type. To avoid this pitfall, we encourage the team to stick to this rule: Write down what you hear the customer say within each transaction verbatim � do not interpret it at this time. Practical steps to finding out about TYPE ♦ Members of the assessment team should go to the points of transaction and have

a brief chat with the people working there, remembering the people may be nervous of the team and their motives.

The team should explain why they are there - the purpose of the work and what they will be doing. The team should stress that they are there to gather data about demand – why customers call in from the customers’ points of view, they are not there to observe or evaluate the service agents.

♦ The team should listen carefully to each customer transaction and write down what it is the customers are asking for.

Practical reminders − What is the demand from the customer’s point of view?

− Write it down in customer terms - what does the customer say?

− Do not make assumptions or interpret

− Do not try to classify types at this point - list each customer ‘demand’ verbatim.


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♦ The team should continue until each member has listened to approximately twenty calls.

As the team make notes, they should ask questions of the service agents to determine how typical these types of call are (“We’ve had two like that, are they typical of that sort of demand?”, “I’ve listened to a number of calls and they’ve all been very different, is that common in your experience?"). These should be informal discussions - the purpose is to ensure the service agents become familiar with the purpose of the team’s work.

♦ Convene the team to compare notes.

The team members should repeat what they have listened to, discuss what the nature of demand was from the customers’ point of view and discuss similarities and differences.


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The following are examples of demand expressed in ‘customer terms’ from the case studies. The customers’ demands are highlighted:

Case Study - Finance Co. Service agent: Good morning, Finance Co. how can I help you? Customer: Hello, I’d like to cancel a direct debit on my account please. Service agent: Okay sir, could I have your account number please? Customer: Yes, it’s 11111111 Service agent: Thank you sir, I will have to ask you some security questions? Customer: Fine. Service agent: Could I have your date of birth please? Customer: Yes, it’s 00-00-00 Service agent: Do you have any direct debits or standing orders on the account? Customer: Yes I have a direct debit with XXX and a standing order with YYY. Service agent: Thank you Mr Z, which direct debit do you want to cancel? Customer: The one to XXX. Service agent: From when would you like this to take effect? Customer: Immediately please. Service agent: Fine, let me just confirm that with you, we are cancelling your direct debit to XXX, for £YY: YY with effect immediately. Customer: Yes, that’s right. Service agent: Is there anything else I can help you with? Customer: No thank you. Clearly in this example the demand from the customers’ point of view is straightforward: “Can I cancel an existing direct debit on my account”.


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Case Study - Phone Co. Service agent: Good afternoon, Phone Co., how can I help you? Customer: Hello I’m going to be spending a considerable amount of time in Northern Europe over the next few months, could you please tell me if you have coverage? Service agent: Where exactly will you be? Customer: Around Amsterdam and Copenhagen. Service agent: Just bear with me one moment while I check for you sir�Yes we do have coverage around both of those cities. Would you like me to activate your roaming facility for you? Customer: Yes please. Service agent: Could you just confirm your password please? Customer: Yes it’s XXXXXXX. Service agent: Thank you Mr. X, I just need to check whether we need a deposit from you before I can activate it�That’s okay Mr. X, we don’t need a deposit, I will activate it for you now. The next time you turn off your handset, when you turn it back on, roaming will be active. Customer: Thank you, bye. In this example an ‘internal perspective’ might have led to recording this demand as international roaming activated’. Strictly speaking, this is NOT how the customer articulated the demand. The demand from the customer’s point of view is: “Can I use my ‘phone around Amsterdam and Copenhagen?”

The reader may think the distinction between ‘internal’ and ‘customer’ classification of type to be splitting hairs. In our experience the distinction is vital to the end game - designing services against customer demand.


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Case Study - Break Fix Co. Customer: Hi, my name is X, I logged a call with you yesterday and you told me that an engineer will be turning up this morning, it’s now one o’clock and he isn’t here. Service agent: I’m sorry about that, can I have your log number and I will see if I can find out what has happened. Customer: The log number is XXXXX. Service agent: Thank you, just bear with me while I look on the system for the latest information on the call�Hi, sorry for the delay, unfortunately there is no up to date information on the system. The event specialist Y is actually dealing with your call, would you like me to put you through to Y. Customer: Yes, please. Service agent: Just bear with me� Service agent: I’m really sorry but Y’s line is busy, can I take your details and get Y to call you back when she is free? Customer: Okay, my phone number is XXXXXXX, it’s a direct line. Here the demand from the customers’ point of view is: “Where is the engineer I was promised?”.


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Next step

♦ The team should return to listening to calls. Once again, listening to

approximately twenty each.

The team should keep going through iterations of twenty or more calls until they have confidence in an initial type classification. We generally find this takes two to five days, depending on the nature of the Call Centre. It is useful for the team to record the data on flip charts and display them. This helps everyone to see the different ‘types’. Patterns will start to emerge and a flip chart display makes it easier to judge when this initial type classification is becoming reliable. When reconvening to compare notes, the facilitator should help the team: ♦ keep on track

♦ keep to a ‘customer’ classification of type

♦ identify similarities and differences in call types

♦ identify differences in type by time of day/week/month

♦ ensure that the team has sampled all points of transaction.


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Here is an example of an initial type classification from one of the case studies: Case Study - Finance Co

TYPES OF DEMAND IN CUSTOMER TERMS Can I have my balance�? Have I had anything paid in�? I don’t agree with these charges� I’ve paid some money in, can you not bounce my cheque�? What has happened to my overdraft application�? Can I speak to�? I’ve just gone overdrawn� What has gone out of my account this week�? Has my cheque cleared�? I want to cancel/amend/set-up a direct debit/standing order� I have a cash-flow problem� Can I open an account�? I’ve lost my cards� You have not returned my call� Where’s my chequebook�? Can I have a loan�? You have not called me back about my loan application� I’ve had my cards stolen� I’d like to pay some bills�

The team in Finance Co had listened to calls for three days. The list of types was much longer than this - we have presented only part of the list. However, after three days they were confident that their list was a reliable representation of the TYPES of customer demand as classified from the customers’ point of view.


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Moving from TYPE to FREQUENCY When the team is confident it has got the type classification complete and accurate, they should start counting the number of each type. Firstly the team should go back through their notes to make a count against the type classification - this will test the validity of the classification and generate the first count. Then the team should continue to count as they continue to listen to calls. If a team member listens to a call that does not fit the type classification, the call should be written down verbatim. When the team re-convenes the type classification can be reviewed and, if necessary, improved. Note – at no time should the team use the category ‘other’. The team should take sample counts until they are confident that the counts they are taking are reliable. The best test of reliability is being able to predict the calls that will come in during the next period (hour, day, week). In our experience, getting to a reliable count can take anything between three days and two weeks. Validating the findings Whilst the team is working on ‘frequency’ they should show their type and frequency data to service agents. This should be done both ‘on the job’ and in short meetings. The team should seek the service agents’ views as to the validity and reliability of the data:

validity: are these types valid from the customers’ point of view?

reliability: are these measures of frequency typical?

We recommend that the team show the data using flip charts, explaining how it was collected and what it says. It is vital that the service agents are continuously involved and engaged in what the assessment team are doing. Some useful questions to address when sharing data with service agents:

♦ are these types of demand usual?

♦ are there demands that are not covered by this list?

♦ are these the sorts of volume we normally get?

♦ is it ever likely to be different?


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If the team find that the samples are not reliable, they must continue gathering data until reliability of data is established. If the demand is significantly different on certain days or at certain times this must be observed and shown separately. The team should establish whether these differences are predictable or unpredictable.

Continue to gather data, refine the type classification and take frequency counts. In all three case studies, following the work of the assessment teams, the service agents joined in and developed their own methods for continuing the data collection about the frequency of each type. DO NOT interpret this as ‘giving the agents a tick-sheet’, a common mistake which results in unreliable data. Agents can be relied upon to take the measurement methods forward when they have been fully involved in the earlier steps – thus they understand the purpose, how the method(s) were developed and hence will feel confident in adjusting the method(s) as necessary.

Why not give service agents tick sheets? If you draw up tick sheets without involving the people who do the work you may find that they have a different perception of your meaning. There may be too many ‘what ifs’, making the task arduous and people will not ‘do it properly’. People frequently do not really understand why they are asked to do this; it is seen as extra work and is therefore not valued. It is not ‘engaging’ the people - to be properly engaged the service agents need to be completely familiar with what the assessment team has been doing. As a consequence, the service agents may develop some tick sheets, but they will have been involved in the decision, they will have discussed and understood the categories and most importantly, will have ownership of the data and be committed to collecting it accurately.


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Example - Finance Co. If service agents had been asked to use this tick sheet, perceptions of meaning could have been misleading. For example, ‘wrong charges’ - does it mean they tick it when: ♦ the charges actually were wrong ♦ whenever they have a query or ♦ when they make a refund even if

the charges were right but as a gesture of goodwill.

Remember: The purpose of the work at this time is to get to a reliable understanding of type and frequency of demand. You know you have finished this stage of the work successfully when you are able to predict the type and frequency of calls that will come in – i.e. what will happen tomorrow, next week and so on (provided nothing changes). Case Study - Phone Co.

Major Types

Change of address

New Personal account

Wrong charges

What has happenedabout my mortgage

etc.

Tick each timeyou get one of these


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This illustration shows the type and frequency of calls that one service agent recorded over three days. (There were many other ‘types’ where the frequency over the three days was 2 or less.).

TYPES OF DEMANDS IN CUSTOMER TERMS FREQUENCY

I’m on the wrong tariff� 79 My ‘phone hasn’t been connected� 58 I don’t understand my bill� 28 Could I have an upgrade�? 25 Can I pay my bill by credit card�? 18 My phone has been barred, can you tell me why�? 16 How do I activate my messaging�? 15 I’ve been overcharged� 13 My ‘phone doesn’t work� 10 Could I have roaming activated�? 10 I didn’t ask for itemised billing� 8 Can I use my phone abroad�? 6


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Case study: Break Fix Co. Type and frequency of demand

TYPES OF DEMANDS IN CUSTOMER TERMS

FREQUENCY % OF

TOTAL

Can I have an engineer to fix my problem�? 78 25

I want an update on my call(s)� 61 20

Give me a part number� 48 15

Can you help me problem-solve�? 27 9

Give me some technical advice� 22 7

Can you solve my problem over the ‘phone�? 19 6

I want to re-log a call� 14 4.5

Can you just send me a part�? 12 4

I want some technical expertise� 12 4

Could I make arrangements for the collection of� t �?

8 3

I want to log several calls� 6 2

I want to pay for a service� 4 1

In Break Fix Co. this count was collected by five people over 6 days. The team collated their data by type and frequency, they then calculated the percentage for each call type. They found this helpful when validating the data. Many of the service agents involved in validating the data found it easier to talk in terms of the percentages of calls they received rather than raw numbers.


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Is the demand predictable ? To get a clear picture of predictability of demand, measures of frequency over time must be taken – each hour, day or week. The choice of time period will depend entirely on what seems sensible to the team. Generally, the more variable the types of demand, the longer the time period required.

Example: Here are two examples of measures over time: Which is more predictable, A or B?

0

20

40

60

80

100

A

05

101520253035

B

Clearly B shows greater predictability.

Figure 15: plotting data over time to establish predictability

When establishing reliability, you will want to know whether the next set of observations could have been predicted – is it typical of this pattern of demand? To answer that question it will help if you put the data into a control chart1 . A control chart will tell you how predictable any particular type of demand is, it will tell you what you can reasonably expect to happen (if nothing changes).

1 For help with making control charts see Further Resources - page 197


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Here is an example of a control chart from Finance Co:

Figure 16: plotting data over time - all calls

The chart suggests one could expect as many as 88,700 calls per week or as few as 79,500 calls per week. The limits of the control chart – called upper and lower control limits – are calculated statistically from the variation inherent in the series of measures. One wouldn’t expect a high number of observations at the upper or lower control limit, but occasional extremes could be expected given the variation in the series of measures. Provided nothing changes, demand can be expected within these limits. Ignorance of the theory of variation is the fundamental weakness in current Call Centre planning tools.


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The extent to which demand can be predicted is dependent on the amount and nature of variation. Here is a chart of a particular type of call into Finance Co, which shows this type of call to be predictable.

Figure 17: plotting data over time for one type of call

Common causes and special causes

There are essentially two types of variation - Common Cause and Special Cause1 . A control chart can be thought of as ‘sending signals’, helping managers react appropriately to events. If the chart shows random variation always within the control limits, one can expect performance to remain the same in the future, unless something changes. This is known as ‘common cause’ variation. Managers (and service agents) should seek to understand the causes of variation - removing them will improve performance and improve predictability. Special causes, on the other hand, are special circumstances. Something unusual has happened, for good or bad. Maybe a large order was sold, perhaps a new piece of software caused service to take longer.

1 For more on the theory of variation see ‘The Vanguard Guide to Creating and Using Control Charts’ and ‘The Vanguard Guide to Using Measures for Performance Improvement’ in Further Resources, page 197.


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In the following case, Christmas was a special cause (fewer calls) and the first week in January was a special cause (more calls):

Figure 18: plotting data over time with ‘special causes’

If Christmas or first-week-in-January data are taken separately and plotted in a control chart (i.e. taking all Christmases over time), these measures may in themselves be found to be predictable. Generally, you should avoid reacting to special causes by taking immediate action. To do so would be to treat ‘one-offs’ as though they were predictable (common causes). Many problems can be caused by treating special causes as common causes; for example, adding unnecessary controls, procedures, resources or overtime. Such actions often lead to unnecessary complexity, bureaucracy and cost. Only by looking at measures over time can you establish predictability. To get a clear picture of the predictability of demand the team needs to: ♦ Plot the call volume data in control charts and study the variation. If the team want to look at the extent of variation or predictability of each call type they will need to: ♦ Turn the raw frequency numbers into percentages as described on page 91.

♦ Extrapolate the percentages against the total incoming demand data.

♦ Plot the extrapolated data in a single measurement control chart. ( In order to create a control chart you should use at least 20 data points.)


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Classifying demand in terms of ‘Value’ and ‘Failure’ Before moving on to the next step, ‘Understanding value created’, the assessment team need to separate the two broad types of demand - ‘value’ demand and ‘failure’ demand.

Value demand - What the Call Centre exists to do for customers.

Failure demand - Demand caused by a failure within the Centre, or its host organisation to get something right

for the customer. This can also be termed demand we want and demand we don’t want.

CUSTOMER DEMANDSTYPE + FREQUENCY VALUE DEMANDS

(DEMANDS WE WANT)

FAILURE DEMANDS(DEMANDS WE DON'T WANT)

Figure 19: Value demand versus Failure demand.

The team needs to establish the type and frequency of value demand as a prerequisite to understanding and improving the organisation’s capability to respond, and to establish the type and frequency of failure demand in order to track the causes and - ultimately - do something about them. Failure demand is waste and can represent large amounts of unnecessary cost.


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Examples of value demand and failure demand from the case studies: Finance Co.:

Value demand (demands we want)

Failure demand (demands we don’t want)

♦ Please send me information on your

mortgage services. ♦ I’d like to open a new account. ♦ Can I set up a Direct Debit? ♦ I have changed my address.

♦ My cheque book has not arrived. ♦ Why have I got these charges? ♦ What is happening with my

mortgage? ♦ You did not call me back about my

loan application.

Phone Co.:



♦ Can I have an upgrade on my phone? ♦ Can I buy an additional ‘phone? ♦ Can I buy insurance for my ‘phone? ♦ Could I have an itemised bill?

♦ I’m on the wrong tariff. ♦ My ‘phone hasn’t been connected. ♦ I don’t understand my bill. ♦ I didn’t ask for itemised billing.

Break Fix Co.:



♦ Can I have an engineer to fix my

problem? ♦ Can you help me solve a problem? ♦ Give me some technical advice.

♦ I want an update on my call(s). ♦ Give me a part number. ♦ I want to re-log a call. ♦ Could you collect the parts your

engineer left?


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Illustrations of the extent of failure demand from the case studies: Case Study - Finance Co.

TYPES OF DEMANDS IN CUSTOMER TERMS FREQUENCY % OF TOTAL

Can I have my balance�? 45 14 Have I had anything paid in�? 39 12 I don’t agree with these charges� 35 11 I’ve paid some money in, can you not bounce my cheque�?

30 9

What has happened to my overdraft application�?

22 7

Can I speak to�? 21 6 I’ve just gone overdrawn� 19 6 What has gone out of my account this week�? 18 5 Has my cheque cleared�? 15 4 I want to cancel/amend/set-up a direct debit/standing order�

14 4

I have a cash-flow problem� 12 4 Can I open an account�? 10 3 I’ve lost my cards� 8 2 You have not returned my call� 8 2 Where’s my chequebook�? 8 2 Can I have a loan�? 5 1.5 You have not called me back about my loan application�

5 1.5

I’ve had my cards stolen� 4 1 I’d like to pay some bills� 4 1

Total Calls = 330

Value Demand = 70%

Failure Demand = 30%


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Case Study - Phone Co. TYPES OF DEMANDS IN CUSTOMER TERMS FREQUENCY % OF

TOTAL I’m on the wrong tariff� 79 28 My ‘phone hasn’t been connected� 58 20 I don’t understand my bill� 28 10 Could I have an upgrade�? 25 9

Can I pay my bill by credit card�? 18 6

My phone has been barred, can you tell me why�? 16 6

How do I activate my messaging�? 15 5 I’ve been overcharged� 13 4 My ‘phone doesn’t work� 10 3

Could I have roaming activated�? 10 3

I didn’t ask for itemised billing� 8 3 Can I use my phone abroad�? 6 2

Total Calls = 286

Value Demand = 30%



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Case Study - Break Fix Co.

TYPES OF DEMANDS IN CUSTOMER TERMS

FREQUENCY % OF TOTAL

Can I have an engineer to fix my problem�? 78 25

I want an update on my call(s)� 61 20 Give me a part number� 48 15 Can you help me problem-solve�? 27 9

Give me some technical advice� 22 7

Can you solve my problem over the ‘phone�? 19 6

I want to re-log a call� 14 4.5 Can you just send me a part�? 12 4

I want some technical expertise� 12 4

Could I make arrangements for the collection of parts, left by your engineer�?

8 3

I want to log several calls� 6 2

I want to pay for a service� 4 1

Total Calls = 311

Value Demand = 57%


‘Failure’ demand consumes resources, adding to costs as well as reflecting poor quality service. Understanding and ultimately removing ‘failure’ demand is the fastest way to improve organisation performance - it improves service and efficiency at the same time.


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Summary of Step 1: Understanding the nature of demand from the customers’ point of view The team should now have a reliable picture of the type and frequency of demand, how predictable it is and how much is value demand versus failure demand. They will have: ♦ listened to calls, noting what customers asked for in customer terms

♦ compared and discussed their findings with other team members

♦ validated the data with the service agents

♦ continued to collect data by ‘type’ until they were confident the classification was reliable

♦ validated the type classification once again with the service agents

♦ counted the number of each type received, adding to and refining the type classification as necessary

♦ discussed the type and frequency data with service agents - ensuring validity and reliability

♦ established a clear picture of the predictability of calls

♦ classified the demand in terms of value and failure.

Once the team have completed this step, it is time to move on to Step 2: Understanding how much value is being created for the customers in response to their demand(s).


102

Notes


103

Performance assessment Step 2 - Understanding the value created for customers by

type of demand

points of

transaction

customer

demands

systemconditions

managerialthinking


for demand

IVR

3

5

4

2

1

Figure 20: Value created at the point of transaction

If it is the customer who sets the ‘nominal value’ (see page 39), the purpose of the ‘front end’ of the Call Centre operation is to respond to that demand in a way that delivers value for the customer. Having established the type and frequency of customer demand, data should be collected to establish how predictably the organisation responds to demand, by type.

In order to understand the value created for customers, this step will show you how to: ♦ examine the current response to each type of demand ♦ rate the response in terms of value created for the customer at

the point of transaction


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Value created for customers This step of the assessment requires the team to understand value created for the customer at the points of transaction. Value must be defined in customer terms. To ensure that the team is looking at this from the same point of view, we recommend the use of the following rating scale:

5 = high value created - ‘WOW’ 4 = better than expected 3 = as expected 2 = worse than expected 1 = negative value created

5

1

2

3

4

Customer demands

+

-

AsExpected

* WOW!

Why did I call -that was a

waste of time!*

Point oftransaction

Figure 21: The customers’ experience

When customers ring the Call Centre it is at the first point of contact that value is created for them (or not). It is at this point that the Call Centre has the opportunity to leave the customers feeling WOW! - that extraordinarily high value was created for them - or it can leave them feeling that the call was a waste of time - negative value being created.


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Illustrations for the range in value created for the customer : High value (4 - 5) is created for:

Customers whose expectations are not only met but exceeded in some way that adds extraordinary value. For example: ♦ Customers who find the Call Centre can do something (of value) that they were

not expecting.

♦ Customers who find the service agent knows more about something than the customer was expecting.

Expected value (3) is created for:

Those customers whose demands are met, as expected, with no further involvement needed by the customer. Worse than expected or negative value (2-1) is created for: Customers whose expectations are not met, or whose experience is negative. For example: ♦ Customers who call for service and are subjected to what they feel to be

unnecessary questions before the agent provides service.

♦ Customers who experience the service agent asking advice from other people because they have limited knowledge of the particular problem or do not have the information required.

♦ Customers who are told something is not available and/or there will be a delay in getting it. This may be further compounded if the service agent is not able to make a commitment as to when it would be completed / ready /available

♦ Customers who are asked to call again because they do not have the necessary details to hand.

♦ Customers who have no confidence that the service agent will take action as committed.

♦ Customers who experience being transferred to someone else who is unavailable.

♦ Customers who have queued only to find that they are directed elsewhere to get the service or information they require (‘You need to ring another number’).


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Understanding the value created by type of demand Method The facilitator should start by having a brief discussion within the assessment team on ‘how we think the customer wants to be treated’. This discussion should draw on what has been heard on the ‘phones.

Some prompts: Do the customers want us to: ♦ make them feel like they are treated as an individual? ♦ meet their demand or need? ♦ give service rather than ‘process’ them? ♦ treat them as a customer not an ‘incident’? ♦ know their history? ♦ deal with their need in a timely way?

Discuss the rating scale - what 5, 4, 3, 2, and 1 might look like - using examples from the Call Centre. When the team feels that they have a common understanding of this, move on to establishing the current value created for customers with each type of demand.

♦ Consider: - the nature of the demand, what mattered to the customer? - how was the demand responded to and then make a judgement about value created for the customer.

The team will base their judgements on the types of call and the responses to them that they noted during the demand analysis. As you have done with all of the steps so far, the team should then take their ratings of ‘value created’ by type of call and validate them with the service agents.

N.B. This should be done for both ‘value’ demand and ‘failure’ demand. Remember the object of understanding value demand is to (ultimately) optimise the flow of work; the object of understanding failure demand is to turn it off.


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Here are some examples from the case studies:

Finance Co.

The customer experiences better service than expected (4- 5)

♦ A customer called for the balance on her account. The service agent gave the balance, then asked if she would like to know what credits had not yet cleared, and what debits would go out that day. The customer was surprised, as she did not realise that Finance Co. could provide this information over the ‘phone and rang off pleased that she now had a complete picture of her account.

♦ A customer called to request a temporary overdraft as she had to pay a large bill and her salary was not due to go in until the following week. The customer expected that she would have to speak to her local branch office manager but the service agent dealt with her request without passing her on to anyone else.

The customer experiences the service expected (3)

♦ A customer called to ask for his credit card to be directed to another branch office for collection. The service agent confirmed that the request would be actioned.

♦ A customer asked for the balance on her account and requested the service agent to transfer funds into another account. The service agent completed a security check, gave the balance and confirmed that the funds would be transferred and could be drawn on the next day.

♦ A customer called to check if her salary had been paid into her account. The service agent confirmed that it had gone in the previous day.

The customer experiences service worse than expected (2) ♦ A customer called saying he had a letter from Finance Co. informing him that he

can invest up to another £1200 in his new TESSA account. He said he would like to do this now and wanted to transfer the funds from his current account. The service agent told him that this has to be done through the branch office and was unable to transfer his call.

♦ A customer called to ask if his salary had been paid in. When asking the

customer some security questions the service agent found the customer had forgotten a security code, so transferred him to a ‘security’ group. The customer spent fifteen minutes being taken through security questions; only then was he informed that his salary had been paid in but had not yet cleared.


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♦ A customer called to ask for a temporary overdraft. When the service agent checked the system the customer was already at his limit, therefore it was necessary to get authorisation from the branch. The service agent tried to connect to the branch but all lines were busy. The service agent suggested the customer went into the branch himself.

Negative value created for the customer (1) ♦ A customer called to transfer some money from one account to another. As

accounts were held in different branches, the service agent could not do this. The service agent informed him that he would have to go into the branch in person.

♦ A customer called to ask if Finance Co. could provide a certain type of foreign

currency. The service agent informed the customer that as this was an unusual currency is would be unlikely to be held and the best thing the customer could do would be to go to a local branch office.

♦ A customer called to say that a credit of £45 (cash payment) was not showing in

her account. She asked if the service agent could trace the payment and confirm that it had gone through. The service agent could not see a payment so tried to pass the call to her branch. However, the line was busy, so the agent informed the customer that an enquiry had been sent to the branch.

Phone Co. The Phone Co assessment team took a different approach. They found that service agents could make quite different responses to the same customer demand, largly because of the inadequacy of service agent training. Here are some examples: Customer demand – I have a call listed on my bill that I did not make……… Responses – 1. How do you know you didn’t make it? 2. Our records show that you did make the call so I cannot reimburse you. 3. I’m sorry, there will be a credit on your next bill. 4. I’m sorry about that, I’ll amend your details so you will have extra call time

immediately. 5. I’m sorry about that, I’ll amend your details so you will have extra call time

immediately and I will investigate why it happened and ensure it doesn’t happen again.


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Customer demand – I want to upgrade my ‘phone to digital … Responses –

1. I will send you forms to complete so that we can run a credit check, you will

have to agree to a new contract and you will have to pay the full retail price of the new ‘phone.

2. I’ll fax you a new contract to sign but you will have to pay the full retail price on the new ‘phone.

3. Which ‘phone would you like and how would you like to pay? 4. We can upgrade you free of charge and add the (discounted) cost of the new

‘phone onto your existing air time agreement. 5. As you have been with us for a long time I’ll send out a ‘phone today free of

charge. Customer demand – I’ve lost my ‘phone, what do I do? Responses –

1. Do you have an insurance policy with us? If you don’t I will bar your ‘phone and

then it’s up to you! 2. Do you have an insurance policy with us? (No) I’ll bar your ‘phone and pass you

on to sales. 3. I’ve barred your ‘phone, would you like to buy a new one? 4. No problem, your ‘phone is barred. Would you like a loan phone while you decide

what to do about replacing your lost ‘phone? 5. Your ‘phone is barred, a loan phone will be dispatched to you today. As you do

not have an insurance agreement would you like a new or reconditioned replacement?


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Break Fix Co. The assessment team in Break Fix Co. decided to use the following rating scale to rate value created for their customers:

4-5 = High Value Created 2-3 = Some value Created 1 = No value Created

Compared to Finance Co., the customer demands on Break Fix Co. fell into broad types and hence the team chose to rate value created for these broad types. Here are just some of their examples of value created for the types of customer demand: A) Can I have an engineer to fix…? High value (4 - 5) is created: ♦ These were calls logged by help-desk personnel who made a high number of calls.

Moreover, these customer help-desks had become accustomed to the procedures used in Break Fix Co. and had all the necessary details to hand. The process was, therefore, reasonably quick and efficient.

Some value (2 - 3) is created: ♦ These were calls logged by help-desks that also placed a high number of calls, but

the customers were often insufficiently prepared from the point of view of Break Fix Co.’s requirements. The customers were known for saying that they felt Break Fix Co should know more about them and their needs and be less interrogative when responding to their calls.

♦ Calls made by technically inexperienced customers. The standard script that service agents used to diagnose assumed a certain level of competence in the user.

No value (1) is created: ♦ For customers who did not have all the necessary details to hand - they were sent

away to get them.

♦ For customers wanting an engineer to be on-site only to find that after they had gone through the ‘validation’ and ‘part number’ steps, their problem and contract were such that they ‘could not’ have an engineer on-site, but had to return the faulty unit to be repaired.


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B) Help me problem solve… Some value (2 - 3) is created: ♦ Customers who called for problem-solving help and were subjected to what they

felt to be unnecessary questions validating the call before the service agent helped them.

♦ Calls where service agents needed to seek advice from others in their group because of limited knowledge of the particular problem that the customer reported.

♦ Calls where technically sophisticated customers were subjected to ‘patronising’ questions, because of the standard script that service agents used.

No value (1) is created for: ♦ Customers who had insufficient technical knowledge to enable the service agent

to talk them through a complex problem to resolution.

♦ Customers who had to work hard to find the information needed for them to be helped. For example, contract number, equipment model numbers and serial numbers.

C) Help me solve it over the phone… High value (4 - 5) is created for: ♦ Those customers who had relatively straightforward problems and because the

resolution to the problem was very quick the agent didn’t bother logging the call and just helped the customer solve it over the ‘phone. From the customers’ point of view the problem was solved very quickly and a high level of value was created.

Some value (2 - 3) is created for: ♦ Customers who came through requesting help on products, which were not

supported. All the agent was able to do was suggest a line of action which may or may not solve the customers’ problem.


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D) Send me a part… High value (4 - 5) is created for: ♦ Those customers that had all the necessary details for the agent to be able to

specify the required part number and were accustomed to and ready for the validation process.

Some value (2 - 3) is created for: Less value was created for customers who requested a part which was not available, and there were no alternatives - there being a delay in getting the part. This was further compounded as the agent was not able to make a commitment as to when the part would be shipped, irrespective of whether the part was available or not. Commitments could only be made by Dispatch.


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Summary of Step 2 - Understanding the value created for customers by type of demand The team have now taken each type of demand, examined the response to the customer and rated the value created. The ability to create value at the point of transaction is dependent on many different factors: ♦ Job design

♦ Procedures

♦ Agent knowledge and skill

♦ Different groups upstream and down stream

♦ Availability of information

♦ IT support systems

♦ Management behaviour

♦ Work measures

and so on�

All of these factors and more help or hinder the service delivery process or ‘flow’,

In order to understand HOW and WHY it is essential to understand flow. The team should now move on to Step 3 - understanding flow: How customer demand is dealt with by the organisation.


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Performance assessment Step 3 - Understanding flow: how customer demand is dealt

with by the organisation.


customer

demands

systemconditions

managerialthinking


for demand

IVR

3

5

4

2

1

Figure 22: Understanding the flow through the system

The assessment team have thus far built a reliable picture of demand on the Call Centre and value created. This picture will illustrate: ♦ the type of demand - from the customers’ perspective

♦ frequency and predictability of the major types of demand

♦ ‘value’ demand as distinct from ‘failure’ demand

♦ the value created for the customer at the point of transaction


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This picture provides the reference point for how the organisation deals with the demand it receives, which is the next focus for the fieldwork.

Step 3 shows you what to do in order to understand how well the current processes handle the current demand; or to put it another way - How well does demand flow through the system? ♦ What is the organisation’s response to customer demand and

how predictable is it? ♦ What is currently happening in the processes and why? ♦ Where is the ‘value’ work and ‘non-value’ work taking place? ♦ What and where is the waste and inefficiency ? ♦ What is the impact of the flow of work on the customer?


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Getting started The team should list the processes to be mapped, based on the major types of demand and decide who will be responsible for mapping which of the processes. Each member should choose no more than two and a meeting to share experiences and progress should be scheduled to take place quite quickly. In our experience, the team needs most help in the early stages of process mapping. Firstly, organise the team’s demand analysis into the following types of demand: ♦ One Stop:

Demand that is dealt with at the first point of contact; the customer is not passed on to anyone else.

♦ One stop for customer but work passed on:

Demand that is dealt with in one stop from the customer’s point of view, but in order to complete the transaction some work is passed on to another part of the Call Centre or host organisation.

♦ Passed back to the customer:

Demand that cannot be dealt with at the Call Centre and is passed back to the customer for them to take some action elsewhere in the organisation.

♦ Passed over:

Demand that cannot be dealt with at the first point of contact and is passed to another person or group in the Call Centre or passed elsewhere in the organisation.

The latter three are processes and the flow will need to be mapped. The reader may not think ‘passed back to the customer’ to be a flow, but think of it this way: The customer called into the Call Centre with a demand that needed to be serviced elsewhere. If the flow is understood, it may be transferable within the Call Centre. The purpose of mapping the flow and understanding what is happening to the demand is to provide an analysis of why the work works the way it does. This fieldwork is well served by continually asking ‘Why?’ ‘Why is it the way it is?’ ‘Why does it happen the way that it does?’ ‘Why is that measured: or why is that not measured?’ ‘Why do people do that: or why do they not do that?’ These questions will surface the way current measures, rules, procedures, work design and so on help or hinder the work flow.


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What does a map of flow look like? A map of flow is a picture or diagram showing the high level end-to-end flow of work activities involved in responding to a customer demand. Processes should be designed to allow the demand to flow through the system in the most efficient way. Mapping and understanding the flow exposes current waste and the causes of waste in the system. A well mapped flow1 provides data on: ♦ how well purpose is understood ♦ how well the process achieves its purpose ♦ the steps and activities in the process ♦ the value and non-value (waste) work ♦ and the ‘why’ of each of the above.

Waste(in process)

Capability(of process)

Purpose(of process)

Flow(of process)

Customerdemand

Figure 23: An effective process map highlights purpose, capability, flow and waste.

In a Call Centre operation that has a ‘traditional’ functional design, where work is done in a series of specialisations or functions, the flow will cross functional boundaries. It is often here that much of the waste or non-value work occurs, e.g. time spent preparing and batching work to send it to others. It is vital that the process flow is mapped end to end; a common mistake is to treat a ‘function’ or an ‘activity’ as a process. This will be avoided if the team always map the flows end to end from receipt of demand to fulfilment.

1 For more help with mapping flow see ‘The Vanguard Guide to Process Mapping and Analysis in Further Resources, page 197.


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Understanding purpose:

CustomerPurpose

Process flow

Figure 24: What is the purpose? The task of mapping each process must start with a clear understanding of purpose. The statement of purpose (intentionally) provides the controlling focus for understanding work activities throughout the process, end to end. Effectiveness is first dependent upon the clarity of understanding of those who work in and manage the process. The purpose of the process should always be considered from two points of view: ♦ What matters to customers (service or value created) ♦ What is important to the organisation (efficiency and/or revenue). Each process should have its purpose defined by the assessment team in operational, measurable terms relating to the above two criteria. When purpose lacks clarity or is poorly understood, people form their own views as to ‘what they are there to do’ and purpose easily becomes fragmented and internally oriented. Equally, when the ‘measures in use’ are unrelated to purpose they have the effect of creating what we call a ‘de facto’ purpose ( for example: ‘meet work standards’). The team’s analysis should seek to establish how the people who work in the process understand their purpose and how that understanding is driving their behaviour and, hence, affecting performance. Tactics ♦ Ask the people who work in the processes what they believe their purpose to be. How would they describe it? Then ask:

♦ Is it what it should be? How does it relate to any ‘official’ statement of purpose? Is it aligned to the overall purpose of the organisation? Does it reflect matters of service, efficiency, revenue? Is it customer focused or internally focused? What impact is it having on people’s behaviour?


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Case study Phone Co. Purpose: The purpose of the Phone Co. Call Centre was to create value for customers by providing them with an efficient ‘one stop’ service centre. However the measures in use were : ♦ Call volumes

♦ Calls per person per day

♦ Average talk time

♦ Service levels, time to answer, abandoned calls

The ‘de facto’ purpose for the service agents was to make their numbers. Their behaviour to customers was driven by the measures: ♦ Calls were rushed, agents did not spend time ensuring that customers

understood things, causing call-backs

♦ Calls were transferred to other departments if it seemed like they would take too long to deal with in the Call Centre

There were no measures of service or capability For example: ♦ value created for the customer

♦ how much of the demand was met ‘one stop’

♦ how much of the demand was dealt with ‘right first time’


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Establishing measures of how well the process achieves its purpose

Demand

CapabilityWhat happens here affects the capability

Figure 25: How well does the process achieve its purpose? What is its capability?

It is important to understand the nature of incoming demand being placed on the process and its current performance or capability to satisfy that demand. This gives a measure of achievement of purpose. Capability is an end of process measure. It answers the question - How good are we, currently? For example:

♦ What percentage of demand is resolved at first point of contact?

♦ What percentage of products or service are accurate, on time, complete, as per commitment etc?

♦ How long does it predictably take the process to handle the demand from customer call to completion?

♦ How well does a sales process generate sales (revenue)? Method: The assessment team should establish measures of performance that relate to purpose. These data are gathered in much the same way as the ‘frequency of demand’ data in step one:

♦ Look at existing sources of information

♦ Involve the people who do the work in taking measures

Walking the process to get some of these numbers may involve crossing organisational boundaries. Often the team discover the data needed are not available and thus need to establish measures.


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Putting the data in control charts It is essential before mapping the process to look at how the process is predictably responding to demand. If no changes are made to the process or the system in which it operates, the level of performance will continue to remain as it is. Plotting the numbers in control charts will reveal the extent of predictability in performance. This is done in exactly the same way as with the demand data. The control limits will show how much variation can be expected from the process; they define what can be predicted about future performance if no action is taken to change the way the process and/or the system works.


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Case study Phone Co. Purpose: The purpose of the Phone Co. Call Centre way was to create value for customers by providing them with an efficient ‘one stop’ service centre. How well was the process achieving purpose - what was its current capability? The assessment team in Phone Co. had the data which told them the type and frequency of demand and how much of it was value or failure demand.

They already had one capability measure (from Step 2):

♦ Value created for the customer (for each type of demand)

They then went on to discover: ♦ The percentage of demand resolved at first point of contact ♦ The percentage of calls that were transferred and dealt with accurately and

as per commitment (by type) ♦ How long it predictably took the processes to handle demand from customer

call to completion, when demand started a flow across the organisation For example: ♦ x % of demand was dealt with one stop ♦ x % of calls were transferred to ‘Faults’

of the calls transferred to ‘Faults’: ♦ x% could have been dealt with by the service agent ♦ x% were solved to customer satisfaction ♦ x% customers had to send their ‘phone in for repair

of those sent for repair: ♦ X% were repaired and returned as per commitment

The team ran these data in control charts; this enabled them to understand the predictability of response to customer demand. They now knew how well the process was currently responding to demand but not WHY. They moved on to look at what was happening in the flow that was affecting the capability.


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Flow - the sequential steps in the process

InputOutput

In creating a flow map it is essential to identify the flow of work as it actually happens, not as it might have been intended to happen or should happen according to ‘the book’.

Note: the assessment team should ignore written procedures. The facilitator must avoid the assessment exercise becoming an exercise of ‘reinforcing procedures’ - something that would shift the assessment back into a mass production perspective.

The task of mapping it ‘as it is’ is best done by actually walking the process, from the point where it was received from the customer to its completion. A helpful framework for capturing the data is:

Figure 26: Understanding the work process or flow

The sequence of activities or steps through which the work flows, from the point of transaction with the customer through to its completion or resolution, can be recorded in the first column. Everything that happens in terms of the doing of the work should be noted down, especially across the functional interfaces.


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Tactics: ♦ Always ‘walk’ end to end (start and finish with the customer).

♦ Keep it ‘high level’ - avoid getting into minute details.

Type and frequency (what and how often) questions should be asked to understand what happens at each and every step along the flow. It is often helpful to view the process or flow as having inputs, throughputs and outputs:

Input: - the demand from the customer.

Throughput: - what happens within the process.

Output: - response delivered to the customer demand.


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To understand the process and to analyse the value and non-value work, the following questions will be useful:

INPUTS The demand from

customers

THROUGHPUTS What happens to the

demand in the process

OUTPUT Response to the

customer demand

What are the different types of demand?

How much of each type (frequency)?

Is it predictable /consistent?

What needs to be done with it - what is the ‘value’ work?

Is it ‘right’ at each point of the flow, can we work on it without any prior rework?

Where does it go next?

How is the work flow designed - what are the steps?

How many steps in the flow?

Where are the handovers?

What interferes with a smooth transition at handovers?

Is information missing?

How much re-work is involved at any point?

What is the value work at each step?

What non-value work occurs and why?

Are the means to do the work available?

Would it improve the efficiency of the flow if it were to be redesigned?

How long does it take?

What is the ‘actual’ work time versus ‘elapsed’ time?

How often is the end service or product right, as promised?

How often is it on time?

How often is it complete?

Where, or to whom does it go?

How often does it lose any element of quality in transit?

How long does it take? Does the output cause further customer demand(s)?


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Questions like these will help establish how well the flow is working. They will identify the factors which are hindering smooth, efficient flow and consistently limit the organisation’s capability to deliver improving levels of service and efficiency. Waste: In every organisation there is waste of resources, materials and time. People can see that if things were done right the first time they could spend less of their time correcting mistakes, doing rework, progress chasing or checking and hence could spend their time more productively. There is also misdirected activity - doing things which are currently required but add no value as far as the customer is concerned.

The assessment team should consider the following distinction: Value work The steps or work in the process that actually contribute to the creation of value for the customer. Non-value work : All the other things that happen, as the process is currently designed and operated, to enable the ‘value’ steps to happen; e.g. sorting, form filling, checking. These create no value for the customer, but are things that the Call Centre or the wider organisation does because of the way the work is currently designed or managed. All non-value work is waste. Some will be type 1 - waste that could be removed immediately (e.g. duplication); some will be type 2 - waste that can only be removed by more fundamental re-design of the work.

Figure 27: examining the waste In the waste column, identify where waste exists and describe what it is. Note the type and frequency (how much) of waste that occurs at each point.


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Waste = spending time doing things again which have not been done right

the first time Waste = duplication of effort Waste = doing things which have absolutely no value to the

customer or the organisation Some examples of waste: ♦ Completing unnecessary forms/paperwork/reports

♦ Handling progress chasing requests

♦ Working from unreliable or inaccurate information

♦ Dealing with misrouted phone calls or post

♦ Checking / batching / logging

♦ Doing things that you find others are doing/have done

♦ Checking that things have been done by other departments or groups

♦ Dealing with problems caused by other departments or groups not doing their job correctly first time

♦ Fire-fighting - dealing with symptoms rather than causes

♦ Obtaining authorisation.

Why is ‘checking work’ wasteful? In a wide range of jobs, both in service and manufacturing, it is commonplace for someone’s work to be checked by another person (or several other people), often supervisors. The assumption that checking reduces the number of errors is entirely misplaced. The more checking, the more errors; and therefore waste increases. If work is being checked, people doing the work are less careful about the quality of their work (sometimes consciously and sometimes unconsciously). It is left to the supervisor to spot mistakes. In most work processes supervisors cannot be expected to spot all errors, or even check every piece of work. Sometimes the work is given only a cursory check; it is often assumed that the person who did it knew what they were doing. Hence mistakes are passed on to the next step in the process, escalating the amount of resource required to repair the mistakes as they go through the process. Sometimes the mistake is passed on to the customer.


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Alternatively, the work may be checked in some detail by the supervisor and changes made. This approach reinforces the belief in the person doing the work that it is not worth putting too much effort into producing ‘quality’ as it will be checked and changed anyway. It is far better to ensure people are trained for their work, know how and when to seek assistance and are given the responsibility for the quality of their own work. They are then more likely to take pride in it. But don’t take our word for it. When the team analyses the process(es), establish the relationship between checking and errors. Handovers Much the same can be said for ‘handovers’. The more handovers designed into the work flow, the more opportunities there are for errors. Things get lost, put to the bottom of the pile, wait in ‘in’ and ‘out’ trays, be transferred incomplete or lacking necessary information and so on. It has been estimated that people working in manufacturing organisations spend about 20% of their time dealing with waste, e.g. re-doing things, returning things that are wrong, chasing things, querying incomplete instructions, doing other people’s jobs because it is quicker, etc. The corresponding figure for service organisations is about 40% because there are more people and fewer machines doing the work. The identification and elimination of waste can, therefore, result in significant cost savings and can often make the difference between profit and loss. Some of the costs of waste are identifiable and measurable (re-work, scrap, duplication, creating unnecessary work) others are less easy to quantify (customer loyalty, negative word of mouth).


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Impact on the customer:

Figure 28: look at the impact on the customer In the ‘impact’ column the team should note: ♦ what happens to the customer throughout the flow - the impact the flow has on

customers in terms of service - what is the customers’ experience of doing business with the organisation?

Remember, the focus of the assessment team’s work at this stage is to establish the relationship between WHAT - the performance of the flow - and WHY - the way the flow works. Validating the flow maps. While the data gathering is in progress it is vital to check the accuracy of the recorded flow with the people who do the work. Some useful questions: ♦ Does the map record what actually happens, is it correct? ♦ Has all the waste been identified? ♦ Is the ‘value’ work and ‘non-value’ work correctly identified. ♦ Are the noted ‘measures in use’ accurate? ♦ Has the impact on the customer been accurately captured?

Note: We would encourage the assessment team to use flip-charts

throughout their work. Flip-charts keep the work visible and make it easy, for example, to validate the work with others. We discourage the use of software process mapping tools - they encourage the wrong thinking.


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Case studies - mapping process flows Phone Co. The Phone Co. team recognised from the work they had conducted in the previous steps that the majority of customer demand was ‘failure’ demand. It fell into four main categories: ♦ Faults - Customers calling in because they had a fault on their ‘phone.

♦ Invoicing - Customers calling in because they had a problem with an invoice.

♦ Point of Sale - Customers calling in as a consequence of sales problems.

♦ Shops calling in - To resolve issues on behalf of customers.

The following example is a high level flow map of the ‘Faults’ process The demand in customer terms could be summed up as “There is something wrong with my ‘phone”. The team mapped the flow from the initial call into the Call Centre and followed it every step of the way through the organisation starting and ending with the customer. They asked questions of the people in the processes to understand how typical the problems were and what impact they had. For example ♦ “How often does this happen?” ♦ “How long does it take?” ♦ “How many of these do you get?” ♦ “Does this cause other problems?” They put the typical times or percentages on their process map as they followed the flow.


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Case Study - Phone Co - Faults Process (high level)

Process

Waste

Impact on customer

Call Centre3800 calls per day

"There is somethingwrong with my phone"

700 calls

Initial Diagnosis

430 calls areprogress chasing- repair- collection- delivery= 61%

Problem solvedone stop

80 calls = 12%

Transferred toTech Help

290 calls = 41%

Cannot resolve.Customer advised

to send in forrepair

150 calls = 21%

Problem resolved40 calls = 6%

Checks warranty& insurance advises

of chargesx% out of warranty

x% not insured

% Abandoned

Progress chasing - indicates a failure of process design Initial instructions not clear - customer not advised on use when buying the ‘phone

Line busy

Duplication - customer is asked the same questions

Lost revenue

Cannot get through -

has to wait a long time or try later

Commitments not honoured

Wasted time - customer could have had ‘phone working

☺ Problem solved

More waiting - in a queue again

Repeating information

No ‘phone

☺ Problem solved

Discovers this will be costly


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Process Waste

Impact on customer

Offers loan

'phone

Advises of timescales forrepair

Arrange collectionof 'phone

20% fail

Log information andforward to 'repairs'

Customer 'phone arrivedin repairs - logged

Initial diagnosis

Sent to manufacturer60%

In-house40%

Returned from manufacturers4-5 weeks

Despatched to customerx% on time as per

commitment

Chase return of loan'phone

Inadequate levels of stock for demand

Loss of revenue

Incorrect information given on timescales. Repeat collections Information received in ‘repairs’ incomplete

Batching work

Time taken when technicians have the ability to do it in-house

No one is chasing the return of loan ‘phones after completed repairs have been returned

No loan ‘phone

available - customer left without a ‘phone

Will progress-chase later

☺ Collected as promised

Not collected - ring in to re-arrange

Time - no information - ring in to progress chase

Phone not arrived as per commitment - ring to progress chase

☺ Phone received, repair completed as per commitment

Figure 18: Phone Co - Faults process


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Having mapped the ‘faults’ flow the team understood the type of customer demand, the current capability of the process to respond to that demand and predictably what was happening in the process. They understood the value and non-value work that was happening and the impact of the whole flow on the customer. With this information they were in a position to take action and predict the impact on performance of any changes that they made.


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Case Study - Finance Co. The team mapped the major types of demand in the way we have just seen with Phone Co. - following the sequence of activities, identifying the waste and identifying the impact on customers. They then chose to take a high level view of the flow from the customers’ perspective, they reviewed the types of demand and classified them under five broad headings : ♦ Can I speak to? ♦ Can I have a service? ♦ Can I check something? ♦ Help me solve a problem. ♦ You have caused me a problem.

Note: In this guide we present only two of these flows

They tracked the types of demand and the flow noting how much of each type was dealt with in the following way:

♦ One stop ♦ One stop for customer but work is set up and passed on ♦ Passed back to the customer ♦ Passed over, transferred elsewhere in the organisation.

Note: The assessment team used the terminology:

Live This was where the service agent could not deal with the call and it was transferred ‘live’ to another person in another department (rather than electronically). Clean / Broken The demand was either passed on/handed over /set up ‘clean’ - i.e. all the relevant information was relayed, all the correct data had been entered. Or the demand was passed on incomplete / incorrect - i.e. it became ‘broken’. The figures A and B on the following pages summarise schematically some of the data the team captured in this part of their fieldwork (the Guide includes schema for two flows: ‘Can I speak to?…’ and ‘Help me solve my problem…’). Before each of the figures a narrative explains what was observed and what conclusions the team drew about the current level of sub-optimisation.


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Notes


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Figure A. ‘Can I speak to?…’ - flow The schematic shows that for this type of demand only 5% of the calls could be dealt with ‘one stop’ and, of these, only one third were dealt with completely by the first point of contact. One third were dealt with after checking with the branch office. One third were passed back to the customer and the customer was advised to go to the branch office. The schematic also shows that 95% of this demand was dealt with through transfer. Of this, 70% were transferred live to the branch office. Of those transferred to the branch office 83% were transferred ‘clean’ maintaining the ‘value stream’ for the customers. The remaining 17% were ‘broken’, which meant a fragmented ‘value stream’ from the customers’ point of view. Some 30% of calls could not be passed live and were transferred electronically. Of these 30% were transferred ‘clean’; 30% were transferred ‘broken’; and 10% were transferred with a commitment made to the customer. For the remaining 30% the team were not able to capture whether the electronic transfer was ‘clean’ or ‘broken’. In summary: 21% of customers who asked to speak to someone within Finance Co experienced a fragmented ‘value stream’.


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Figure 29: ‘Can I speak to….’ - flow

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Figure B. ‘Help me solve my problem…’ - flow The schematic shows that for this type of demand 20% was dealt with ‘one stop’ and of this 100% was completed by the first point of contact. The schematic also shows that 80% of this demand involved a transfer of which 50% was transferred live. Of these live transfers, 50% were transferred ‘clean’ to the branch office. The team were not able to capture whether the transfer was ‘clean’ or ‘broken’ for the other 50%. They found no live internal transfers. The remaining 50% of this type of demand was transferred electronically. Of these electronic transfers 100% were ‘broken’. In summary: when customers were looking for help to solve their problem they were likely to experience a fragmented value stream 40% of the time.


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Figure 30: ‘Help me solve my problem….’ - flow

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140

Break Fix Co. The Break Fix Co. assessment team mapped their work-flow of response to customer demand as shown on the opposite page. They recognised that their ‘flow’ had to be understood in the context of ‘value’ to the customer. They concluded that for Break Fix Co. the ‘value flow’ consists of two parts: ♦ Agreeing the problem (from the customers’ point of view) ♦ Resolving the problem

Before they mapped the flow, the team had to spend considerable time measuring how long it took to resolve problems i.e. achieve their purpose of ‘fixing broken computers’. The organisation had measures of activity, service standards, costs and so on but no measures of performance against purpose. (i.e. the time taken from initial customer contact through to a repaired machine). When put in a control chart, the time to resolve problems was 6 days (average); 12 days (upper limit); 0 days (lower limit). In other words, the team could now predict that the next ‘break’ would be ‘fixed’ in 0 to 12 days. Armed with this knowledge of the WHAT, they began to map the flow to find out the WHY. As the team mapped the total flow, they looked for the points at which people were dealing with ‘value’ work (from the customers’ point of view) and the points at which people were, by default, doing ‘non-value’ work. These points are discussed in more detail after the schematic of the flow.


141

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142

Within the typical Break Fix Co. work-flow, the team identified common problems that occurred at Points A through to G (highlighted with blue text). The common problems caused fragmenting of the flow, which led to sub-optimal performance. The team found the fragmentation to be predictable at each of the points - they were features of the ‘system’. They concluded that as the problems had been ‘designed-in’ they could be ‘designed-out’. The details of fragmentation / failure were described as follows: Point A ♦ Criteria for validation: A valid service contract.

♦ Means of establishing validity: Contract number; postcode; customer name; machine type; serial number.

When customers had insufficient information to be ‘validated’, they were either asked to go and get the required information (primarily the smaller customers) or Diagnosticians spent time performing ‘off-line’ validation. This frequently involved going to the Contract Administration department to check the hardcopy contract when no record existed on the IT systems. The course of action taken by the Diagnostician, whose purpose was to ‘diagnose the fault’, was governed by a number of factors: ♦ How busy the Call Centre was.

If little time was available, due to the high volume of calls, Diagnosticians were less likely to validate problematic customers off-line. Large customers (Banks, Utility companies and the like) were less likely to be sent away or investigated as it was likely they would be genuine customers anyway.

♦ The emotional state of the caller.

If the caller was showing signs of frustration and was adamant they had a contract, the call was progressed without validation.

Go through the process

of validating the customer.


143

♦ Customers calling about a faulty ‘Server’.

Validation was an important pre-requisite to progressing the call because of the time spent working with the customer to diagnose the problem. Server problems tended to be inherently more complex.

Point B Very often customers did not have the model numbers and/or serial numbers of their faulty equipment. If the faulty equipment was nearby customers could be directed on how to locate the serial number. Even when the equipment was close at hand it was often located under a desk or in some other hard to reach place. If the faulty equipment was not to hand or ‘hidden away’, the call could not be progressed and the customer was asked to call back when they had gathered the required information. Even with monitors (always visible) obtaining the model and serial number was not straightforward. The model number and/or serial number of the base unit, in addition to that of the monitor, were required as PCs were sold as ‘complete systems’. In cases where the information required to identify the failing part, for whatever reason, was unobtainable the call was ‘logged’ (turned into an electronic call for distribution to different parts of the organisation) and an engineer dispatched. Once on site it was up to the engineer to order a replacement part. This meant the engineer could not achieve his/her purpose and caused the customer the inconvenience of another visit once the part had arrived. In other cases the fault could lie with one of five different parts. In this scenario the diagnostician either ‘had a guess’ or sent an engineer to investigate.

Ask the customer sufficient questions to allow us to specify the

part number.


144

Point C

Once diagnosed and logged the fault call was passed (electronically) to a Resource Controller whose purpose was to schedule and dispatch an engineer. The team found that Resource Controllers ‘re-worked’ 40% of the calls they received from Diagnosis. As Resource Controllers worked with a particular ‘geography’ and, therefore, had better knowledge of the customers than the Diagnosticians they frequently corrected missing or erroneous information, e.g. Postcodes, phone numbers etc.

Some customers had ‘special’ part numbers for particular types of equipment, some even kept their own stock of these parts. The Resource Controllers, because of their familiarity with the customers in their area, ‘translated’ the part number specified by the Diagnostician into one that would actually fix the customers’ equipment.

Point D The Resource Controllers, sometimes referred to as ‘Dispatchers’, were very focused on meeting contractual response time (e.g. Fixed within 4 hours). If two jobs arrived in their ‘patch’ and one had already missed the ‘response’ the Dispatcher frequently prioritised the newest call, i.e. the call they still stood a chance of reaching within the allotted time. The philosophy was ‘a miss may as well be by a mile’. For the same reason Dispatchers ‘pushed’ preventative maintenance calls out to another day when the area would be less busy; these calls did not have a response time therefore it could not be missed!

The Resource Controller then checks the call details on the job

and amends as necessary (primarily address and coverage codes but also part numbers).

The Resource Controller then looks at the availability

of engineers within the required geography.


145

Point E Diagnosis did not have access to all the different Logistics part numbering systems, as a consequence, over 20% of calls had to be reworked in Logistics in order for them to ship the correct replacement part. If Logistics received a call requiring a part and the part was out of stock, the call should have been passed back to Resource Control for them to specify an alternative. In practice, Logistics decided on an alternative themselves. In many cases the alternative part specified by Logistics, while it seemed the same to them, turned out to be incompatible with the customer’s system. The engineers only discovered this incompatibility when they attempted to fit the part in the customer’s machine.

Point F When the Resource Controller rang to inform the customer of the engineer’s arrival time, the time allocated was often inconvenient. Again the call had to be re-worked or, if it suited the Resource Controller, the customer was ‘encouraged’ to accept the ETA.

Meanwhile logistics will look for the part. More often than

not, logistics will have to convert part no’s

The Resource Controller then calls the customer with an estimated time of arrival

for the engineer.


146

Point G It was a regular occurrence (i.e. a feature of the system) for engineers not to arrive on-site at the committed time! Naturally, customers would ‘phone Break Fix Co. to ‘progress chase’. As progress chasing was such a regular occurrence the organisation created a new role (‘Progress chasers’) to deal with this type of (failure) demand. In order for the Progress Chaser to give the customer a new ETA they first had to talk to the Resource Controller, who in turn, had to contact the assigned engineer who would give their view on their arrival time at the customer’s site. Engineers often arrived at their spare parts pick up point or, in cases where the part was to be delivered direct to the customer, at the customer’s office, to find that no part had been delivered. On such occasions the engineer had to call their Resource Controller and agree the appropriate course of action. One typical course of action (again a feature of the system) was for the engineer to keep the original planned visit to the customer. Clearly without a spare part the engineer had no chance of repairing the customers faulty equipment. However, by arriving at site the engineer met the contractual obligation, to ‘respond’, to the customer, i.e. the ‘response time’ was met. On other occasions, the Resource Controller would contact the Progress Chaser who, in turn, would call the customer to give them a revised ETA, i.e. they made a pre-emptive strike, in order to avoid a customer chase call. Engineers often turned up at customer’s site only to find the end user was unavailable. Where the fault could be resolved without further information from the end user the engineer could fix the problem. Unfortunately, it was common for the engineer, as we saw earlier, to be dispatched to site in order to get further information regarding the fault. All the engineer was able to do in those situations was to leave a message for the end user informing them that a Resource Controller would call to arrange a second visit.

The engineer turns up at the committed time and

carries out the repair.


147

Other problems that engineers encountered were: ♦ The wrong parts had been sent (right diagnosis)

♦ The wrong parts had been sent (wrong diagnosis)

♦ The wrong parts were in the box (right part number on the outside of the box)

♦ The part was DOA (dead on arrival)

♦ The replacement part did not resolve the problem

When any of these situations arose, the engineer informed the customer that the problem had not been resolved and that a Resource Controller would ‘phone to arrange another visit. Having completed the workflow analysis, the assessment team concluded that the activities described in Figure 31 were all things that had to happen in order to fulfil the customers’ service requirements. However, because the workflow had been designed in functional components it had become compartmentalised and protracted. The workflow went across four different departmental boundaries: Diagnosis, Resource Control, Logistics and Service Delivery (engineers). The operational focus of these departments was very different and not complementary. The potential and even the desire to improve the current flow was hampered by the requirement to satisfy the respective functional ‘goals’, which would be achieved at the expense of the overall system.


148

Summary of Step 3 - Understanding flow: how customer demand is dealt with by the organisation.

The team should now have a clear understanding of what happens to the demand, that is: How well demand flows through the system They should know and have measures of: ♦ The response to customer demand and how predictable it is These measures will have been defined by referring to the purpose of the work. They should have process maps identifying: ♦ What is currently happening in the processes (the activity) ♦ Where the ‘value’ work and ‘non-value’ work is taking place ♦ Where there is waste and inefficiency ♦ The impact of this on the customer They should have measures of what is happening in the processes.

Having completed Steps 1-3 the team now have a clear picture of HOW the work works; how customer demand is dealt with by the organisation. The next question is WHY; what is happening that causes the processes to work the way they do way? What are the system conditions governing performance? These are examined next in Step 4.


149

Performance assessment Step 4 - Understanding system conditions and how they

affect performance.

points of

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customer

demands

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for demand

IVR

3

5

4

2

1

Figure 32: How do system conditions effect call centre performance?

System conditions cause processes to work the way they do; they must by definition have a positive or negative influence on the effectiveness of the organisation. They are the main cause of variation in process performance/efficiency and produce the ultimate knock-on effect to customer satisfaction and costs. Work design, structure, roles, measures, information, physical facilities, IT, policies and so on, all effect the way a process works. When the ‘what’ and ‘why’ of current performance is understood, changes can be undertaken with confidence and outcomes predicted and measured. The team have analysed the nature of demand, the process capability i.e. the response to that demand, what it predictably achieves and the value and flow of the process that delivers that response. During this work they will have gained some understanding of ‘why’ it is working the way it is.

In Step 4 the team need to clearly identify the system conditions- the ‘whys’ and understand the impact they are having on Call Centre performance.


150

Every Call Centre will be different. Yet of all the various system conditions affecting performance in the Call Centres we have worked in we find structure, roles and measures to be the three which most often adversly influence performance and require change. Structure: the Call Centre is not a separate function Every Call Centre we have worked with could be thought of as the ‘eyes and ears’ of the business. As you have seen, ‘failure’ demand is caused by a failure (usually) of the wider organisation. The work of a Call Centre is often the beginning of a flow and should be treated as such. Measures: must aid learning Traditionally, measures have been an instrument of management control. Measures are often turned into targets or standards that people are expected to meet, without reference to the capability of the process in which they are working. When measures are used in this way sub-optimisation is always the result. When the measure is beyond current capability, people can only ‘cheat’ to achieve it - not bad people, just a bad system. If the measure is well within capability, it encourages people to under achieve - it is sometimes dangerous to appear to be ‘working too hard’. Measurement is central to performance improvement. However, systems thinking teaches us to take different measures in order to understand and improve performance. These are measures which relate to the purpose of the organisation and its processes. For the people who do the work to value and take action on the measures in use, the measures must clearly be measuring achievement of purpose. In this sense, measurement is an essential pre-requisite of improvement and innovation. Without (the right) measures people act in a vacuum. With (the right) measures people know how well purpose is currently being achieved, are secure in experimenting with how the work flows and learning how to improve it. The logic is:

Purpose

Measures

Methods

Figure 33: The relationship between purpose, methods and measures


151

Roles: should add value, not ‘control’ When an organisation is viewed as a system, the purpose of which is to create value for its customers, it makes sense to think differently about roles. Instead of roles being defined in relation to function and hierarchy, it makes more sense to think about roles in terms of purpose. Viewing organisations as systems there are essentially two types of role:

♦ roles that create value for customers - viz. roles in core processes.

♦ roles that add value to the core processes - viz. roles in support functions.

The roles that create value for customers are those which exist in the organisation’s core processes - those processes that touch the customer. These roles can be things like sales, customer service, product design, product support. Core processes must be judged in terms of their capability - what they predictably achieve and how this relates to what matters to customers. Measures of this kind in the hands of people working in the core processes are pre-requisites to continuous improvement. Roles which ‘add value’ must be judged from their impact on the core processes. This means evaluating work like management, finance, IT and HR from the point of view of value created in support of the core processes to achieve purpose. A challenge to some. In every Call Centre we have worked in, it has been necessary to establish new measures and new roles.

Old Measures New Measures Budget, standards,

activity Capability vs purpose,

variation

Old roles New roles Manage numbers and people Act on system

Figure 34: Changing thinking about measures and roles

Part 3 - A Better Way of Thinking - discussed the essential differences between the two points of view and we return to this discussion in Re-design of measurement system (page 185).


152

Identifying system conditions and how they affect performance Having mapped the processes and understood HOW the work works the team will already have much information about WHY it works that way. This step pulls that knowledge together and ensures that the team have captured all the data they need to understand what is influencing performance. There may be some questions raised that require them to go back into the processes to check out their information or to ask more questions. Tactics: Take the process maps and review the demand, value, capability and flow. Identify those things that are helping or hindering the flow of work and your ability to create value for the customer in the Call Centre. For example Study the work flow and: ♦ Identify any structural influences on process performance. ♦ Ask: how and why is structure helping or hindering? ♦ Identify where and how the value work gets done in each function. ♦ Identify any sub-optimisation caused by functional design. Review the current use of measures ♦ Do measures relate to purpose? ♦ How is behaviour being influenced by measures? ♦ Identify where and how functional measures impede the flow of work. ♦ Identify what measures would be more useful. What measures would help you

track improvement The team should identify all those things that are causing the processes to work the way they do (e.g. work design, structure, measures, roles, information, policies, IT and so on). They should capture data and examples of the impact these ‘system conditions’ are having on the flow of work in the Call Centre (both helping and hindering). System conditions in Phone Co The assessment team in Phone Co summarised their work on system conditions by describing the dynamics occurring in four departments.


153

Customer Service

WHAT MANAGEMENT ARE

FOCUSED ON WHAT FRONT LINE ARE

DOING CUSTOMER’S TYPICAL

EXPERIENCE ♦ Paying attention to

calls waiting ♦ Pay attention to

the number of calls coming in by group (Business, Dealers & Individuals)

♦ Ensuring customers

only receive service they are entitled to

♦ Checking calls to

ensure that the correct procedures are adhered to

♦ Ensuring service

levels are met ♦ Paying attention to

performance against standards

♦ Paying attention to

front line activity measures

♦ Completing internal

forms ♦ ‘Bounce’ callers

between groups ♦ Providing the

minimum help/advice ♦ Following scripted

response ♦ Minimising time (talk

time) spent on the call

♦ Only committing to

issues within their control

♦ Manipulating call

stats ♦ Not completing all

the ‘off line’ work ♦ Passing messages

rather than solving customer problems

♦ Delay on the IVR ♦ Explaining their

problem many times ♦ Being left to

‘manage’ the problem resolution

♦ Inability to get the

response they require

♦ Inappropriate

solution to their problem

♦ Customer has to

chase ♦ Delays in response ♦ Not having a

commitment made and kept, causing call-backs


154

Marketing

WHAT MANAGEMENT ARE



EXPERIENCE ♦ Marketing initiatives ♦ Incentives ♦ What the

competition are doing

♦ Price

♦ ‘One size fits all’

campaigns ♦ For customers �

‘Points make prizes’ ♦ For sales � reward

programmes ♦ Spending time

writing reports for management

♦ Negotiating deals

with service providers

♦ Creating ‘deals’

♦ Inappropriate

correspondence ♦ Having to make calls

to the organisation ♦ Inappropriately sold

service ♦ All service providers

being the same ♦ High number

(Constantly changing) and confusing service/product offers


155

Sales

WHAT MANAGEMENT ARE



EXPERIENCE ♦ Sales volume

♦ ‘Saving’ customers

♦ Selling on price alone

♦ Selling the ‘easiest’

deal

♦ Following the procedure (this week’s deal)

♦ Spending time attempting to persuade Marketing that ‘the deal’ is not right

♦ Paying higher call

charges than need be

♦ Being connected to the wrong network (poor coverage)

♦ Being treated unfairly

♦ Not having their problem resolved

♦ A ‘sell’ as opposed to a service

Finance

WHAT MANAGEMENT ARE



EXPERIENCE ♦ Bad debt

♦ ‘Exposure’ to debt

♦ Chasing non-

payment

♦ Placing ‘Bars’ on phones

♦ Setting credit limits

♦ Administering contracts

♦ Forcing service

through non-payment

♦ Their phone suddenly not working

♦ Not being able to use services they thought they had (Int’l roaming)

♦ Having to complete and send/fax forms


156

System conditions in Finance Co. Similarly, the assessment team in Finance Co. created a high level summary of how the system conditions - measurement, roles, structure, management behaviour - created a dynamic activity ‘down the hierarchy’. It is interesting to note how the Director’s focus on cost was ultimately dysfunctional. Far removed from the work, he believed there to be a relationship between average handling time (AHT) and cost. It is a ‘production’ assumption. If this assumption results in ‘commands’ - which is not unusual in the Call Centre environment - it can cause costs rather than reduce them.


157

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158

System conditions in Break Fix Co. Break Fix Co was the most complex of the three case studies. In Break Fix Co, the assessment team became focused on the way in which the flow fragmented value. For the customer the value stream consists of two simple steps - the problem and its solution. Organising and managing this work into a series of functional parts (IVR, Diagnostician, Progress Chaser, Resource Controller, Dispatcher, Engineer, Logistics) makes it difficult for anyone dealing with the customer to make and meet commitments. The following observations were made: Roles and waste Aside from the roles of Diagnostician and Engineer, all other roles in the system are concerned with managing or progress-chasing customer calls. None works very well. Diagnosticians, the first role in the process, are able to progress only 51% of the calls they receive; the other 49% encounter problems which prevent the call being progressed. Progress chasers and Dispatchers manage the customer and internal resources adding nothing to the ‘value stream’, rather patching over its failure. Such roles are not uncommon in organisations. In the ideally designed and operating work flow they would not be necessary. It is precisely because the current design and operation is not ideal that such ‘patches’ are applied. People who work in ‘patch’ roles usually have to work very hard (almost by definition) and naturally feel it odd that their contribution is labelled ‘waste’. But if the value steps worked better their role would be redundant - it is waste. In Break Fix only 30% of problems are closed on the first call - a consequence of changes over time to procedures which fragmented the value stream, followed by attempts to stem the ‘cracks’ with ‘patches’. Unfortunately, managers of the various functions were paying attention to functional measures (understandably), not least measures of their people’s activity. Achievement of purpose, as experienced by the customer, became but the backdrop to frenetic activity.


159

Measures in use This part of the analysis addressed two questions: 1. What measures are taken? 2. How are the measures used? Measures inDiagnosis: The figure below details all the measures, that were taken at an individual level within Diagnosis and are followed by the assessment team’s observations:

Service Level Not ready time Numbers of calls taken Occupancy Time waiting for calls Diagnosis accuracy (random

sample) Availability Closure rate

Average handling time First visit fix Total time on-line Parts consumption

Figure 35: Measures in diagnosis for all individuals

Observations ♦ Service level, seen as the most important overall measure, was calculated from

data provided by the ACD system. It is essentially a measure of ‘pick up’ time. The service level target was 90% of calls picked up in less than 1 min.

♦ Service level data were used to calculate resource and compare performance

between different groups. ♦ The Server group was treated differently from all other groups - they were

allowed longer times - as there was a common (but erroneous) belief that the nature of calls they serviced was more complex.


160

♦ Occupancy data were calculated - Average handling time x Number of calls Wait time ♦ Occupancy data were treated as a measure of how busy people were. ♦ Data from the ACD statistics were used to identify training or coaching needs.

However, Team Leaders found it difficult to release Diagnosticians for training as this meant less people available to take calls and, therefore, a reduction in service level.

All the types of data collected on individual diagnosticians were collated at a group level. Also collated at a group level were - ♦ Chase calls

♦ Re-routed calls

♦ Abandoned calls greater than 12 sec.

Measures in Dispatch/Progress Chasing By individual Dispatcher / Progress Chaser:

♦ Number of call updates

♦ Engineer utilisation

♦ Volume of open calls

♦ Behavioural measures:

◊ Stress tolerance/controlled response

◊ Commitment/adaptability

◊ Initiative

Dispatch / Progress Chasers - by group:


161

All the types of data collected for individuals were also measured at a group level. Also collated at a group level were the following - ♦ Customer satisfaction

♦ Overnight materials usage

♦ Missed response time

♦ Customer updates

♦ Average speed to answer

♦ Number of agents by time of day

♦ Blown response

♦ Materials returned.

Measurement up the hierarchy At cost centre level the following were collated - ♦ Day to day measures:

◊ Overall service level ◊ Time on-line ◊ Occupancy ◊ Call volume ◊ Diagnosis efficiency.

♦ Budget measures:

◊ Head count ◊ Spend ◊ Cost per call.

♦ Other Key ‘Productivity’ Indicators:

◊ First visit fix rate ◊ Average handling time ◊ Closure rate ◊ Calls per Diagnostician per day.


162

Observations It was striking how different the atmosphere was in Dispatch and Progress Chasers compared with Diagnosis. Diagnosis was quiet and relaxed; Dispatch and Progress Chasing were frenetic. When viewed in the context of ‘value and flow’ this only served to illustrate how badly broken the value flow was. Fire-fighting was consuming enormous costs. The behavioural measures (‘coping with stress’) were a response to symptoms. Managers would have been better to focus their attention on identifying and eradicating the causes of the problems. The operational perspective of data collection was productivity and cost. The data were aggregated up the management structure for the purpose of comparison between individuals, teams, cost centres and, ultimately, territories. This carried the associated risks: ♦ Performance comparisons between individuals damaged morale as the major

sources of variation were in the system. To illustrate:

There were a number of sources of variation between calls. Call complexity, Diagnostician’s expertise, customer’s expertise, customers having the right information - all of these things and more will affect call length and quality of call handling. To compound the problem, Diagnosticians were driven by the number of calls they took each day. This influenced the amount of time they spent trying to diagnose a problem. The resultant data - number of calls handled, average call length - were both distorted and misleading. Only by plotting data over time would a manager know how much variation was attributable to the system and how much was attributable to differences between Diagnosticians.


163

♦ Similarly, management decisions about changes would often result in poorer

performance because decisions were based on activity and cost data.

During the period of this analysis Break Fix Co. re-structured its work, out-sourcing service delivery for some products and customers. The team learned that the decision to outsource service delivery to 3rd party maintenance companies was taken as a result of comparing the current service delivery cost model against the organisational corporate strategy. The purpose was to focus on ‘what we do well’ and to out-source ‘what others can deliver better’. According to the managers interviewed, the main considerations were financial. Their concern, however was that while 3rd parties might indeed deliver a ‘fix’ at a lower cost, this may be at the expense of overall service received by the customer. These observations were borne out by the experience of one major customer. After a period of one month the customer had become so disenchanted with the service received that they threatened to terminate the contract. The result was that their work was brought back in-house.

The issue here was how change was managed. Decisions based on costs made performance worse. Knowing the causes of costs - the nature of demand, current capability and flow - would have lead to better decisions about what to change and how. Measurement - what was missing? There was no evidence of measures of: ♦ ‘What mattered’ to customers

♦ End to end process performance - capability and efficiency

♦ Waste


164

Break Fix Co. had abundant data but little that was useful for improving performance. Both the nature of data collected and the way it was used resulted in sub-optimisation of performance - worse service, less efficiency, lower morale. The table following is the team’s summary of: ♦ The measures in use in Diagnosis (Column1). ♦ How these data were then used by the team leaders in Diagnosis (Column 2). ♦ How they were aggregated and used by the departmental managers (Column 3). ♦ The final column shows how these data were used at the territory level.

Measures of individuals

Usage by Team Leader

Cost centre management

Territory management

♦ Service Level ♦ Average handling

time ♦ Calls taken ♦ Not ready time ♦ Occupancy ♦ Accuracy ♦ Call logged ♦ Closure rate ♦ 1st visit fix ♦ Availability

♦ Resource

planning/balancing ♦ Training needs ♦ Comparison

between individuals ♦ Comparison

between groups

♦ Resource

planning/balancing ♦ Budget planning Head count Volume Cost per call ♦ Calls/technician/ day

♦ Budget Vs

forecast ♦ KPI Vs

forecast ♦ Skills

availability Vs requirement

Information Flow


165

The measurement ‘logic’ Production measures were designed at the top of the hierarchy and passed down to the front-line. The following table is the team’s summary of how this worked: ♦ The territory level focus was comparative cost performance across cost centres

and between territories versus corporate financial goals. These comparisons would drive the definition of the performance levels required and the allocation of budgets.

♦ At the level of the cost centre this translated into a review of the operational requirements, allocating budgets.

♦ Team leaders then had to capture data to demonstrate current performance against the required levels of performance and make decisions about what and where to change things to meet the required performance levels.

♦ The consequential impact on people in the front-line was they ‘had to’ ensure they were dealing with valid calls and ‘had to’ work to minimise the time they spent on the calls.

Impact on front line

Team Leader Cost centre Territory

♦ Call validation

♦ Minimise time per call

♦ Design data

capture methodology

♦ Review current performance Vs goals

♦ Move resource

between groups

♦ Re-train technicians

♦ Review

operational requirements

♦ Review budget allocation

♦ Implement measure of cost per call and service level

♦ Focus on cost

data e.g. cost per call between cost centres Vs corporate financial goals

♦ Issue Operational Manual defining level of performance required e.g. Answer call in 3 rings and procedures for call handling

♦ Allocate budgets

Measurement design process


166

The logic of the current system The assessment team summarised the relationship between the system conditions and performance. The summary describes the relationship between what the customer experiences, front-line behaviour and what management is focused on.


168

WHAT MANAGEMENT

WERE FOCUSED ON WHAT FRONT LINE WERE DOING CUSTOMERS’ TYPICAL

EXPERIENCE ♦ Calls waiting ♦ The number of calls

coming in by group ♦ Service was only

delivered to validated customers

♦ Procedures are adhered to

♦ Correct call routing and the ‘right’ amount of time was spent on the call

♦ Ensuring that response time goals were met

♦ Customer updates and response time

♦ Front line activity ♦ First visit fix ♦ Calls/man/day ♦ Shipping costs ♦ Minimising costs -

therefore one part per call

♦ Tick-sheets ♦ Escalation of and fire-

fighting specific issues

♦ Spending lots of time validating ♦ Re-routing overflow calls in order to

achieve accurate call volume statistics ♦ Interrogating customers for proof that

they were valid ♦ Subjecting customers to the standard

procedure i.e. ‘have you switched it on?’ ♦ Passing ownership to Resource Control -

they were responsible for engineers ♦ Focusing on response time as THE

priority ♦ Diagnosis calling Resource Control to

get an update or pass a customer through

♦ Getting part and engineer availability - and having to re-work through the system

♦ Engineers diagnosing calls in order to get the right part because they had no faith in Diagnosis

♦ Not spending sufficient time to diagnose therefore engineer sent to investigate and order parts from site

♦ Dispatch chasing Logistics for part ETA♦ Minimising parts distribution i.e. one

part per call ♦ Fire-fight to recover situation ♦ Fire-fighting to resolve situation ♦ Rescheduling engineer and part

♦ Delay and confusion on the IVR

♦ Being re-routed ♦ Mis-trust ♦ Difficulties over the

problem description ♦ No commitments given ♦ Unpredictable time

delays ♦ Having to make chase

calls ♦ Missed ETAs for the

engineer and/or part ♦ Having engineers make

contact in an attempt to manage the call

♦ Engineers arriving on site to diagnose

♦ Engineers arriving on site to find the part has not arrived

♦ Attempted fixes by engineers on-site

♦ Parts DOA, wrong part shipped, incorrect diagnosis

♦ Equipment taken away for repair

♦ Return visits

The performance logic in Break Fix Co.


169

The assessment teams’ observations of the flow: ♦ Customer demand - approximately 1180 calls logged per day plus approximately

290 progress chase calls. The weekly telephone report requested from Dispatch showed that an additional 600 calls per day were received from customers chasing the previous day’s/week’s work.

♦ On a scale of 1-5, the value created at the first point of contact is equal to or less

than 3 for 95% of all demand. ♦ Levels of rework - approximately 270 calls per day have to be reworked in

Dispatch because of incorrect call details (name, address and telephone no., wrong or no part numbers).

♦ Over 50% of calls passed to Logistics each day (Approx. 460) have to be

reworked because of wrong part number, or no parts identified. ♦ System success or failure- approximately 60% success; 40% failure, taken from

work-shadowing and conducting a retrospective dairy assessment with field engineers, asking “How many calls are you able to resolve first time?”

♦ Achieving purpose - Assuming the purpose is to ‘fix calls’ this can be achieved in

one of two places, on the phone or in the field. In response to the question - “What proportion of the time can we do this ‘cleanly’ (with no rework)?” the data shows a maximum of 19% on the ‘phone and a maximum of 30% in the field.

♦ Achieving purpose - calls were taking 0 - 12 days to fix, with average being 6 days

(these numbers were presented in a control chart).


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The assessment team in Break Fix Co also created a picture of the major flows in the Call Centre:.

AllCalls

1180Calls passed to

ResourceControl

Wrong DetailsWrong P.No.UK P.No

Pass toLogistics

Update

Requirerework

Customer Progresschasing

Eng.

Pass to Eng.

Fail to fix-Wrong details-Non H/W-Parts not available-Incorrect diagnosis

Fixed by Eng on1st visit

910 270

50

460

290290

730

180parts only

440

60 Resource Control(customers progress

chasing)

200 Send Eng. (D)400 Send Eng. (C)180 Send Part220 Phone Fix 40 Repeat 50 Update 90 Other

DOA 20Wrong part 20

Customer not available 20

Purpose = Fix calls19%

30%

Value Createdfor 95%< =3

Figure 36: Major flows in Break Fix Co.


171

Summary Step 4 - Understanding system conditions and how they affect performance. The team will have identified all of the system conditions that cause the processes to work the way they do by : ♦ Reviewing the process maps and identifying those things that are helping or

hindering the flow of work and thus the ability to create value for customers ♦ Capturing data on the relationship between system conditions and

performance.

The performance assessment is now almost complete, the ‘what’ and ‘why’ of current performance should be understood. Step 5 helps the team to summarise the logic of the current system by understanding the underlying reason for the quality of current performance - management thinking.


172

Notes


173

Performance assessment

Part 5 - Understanding how managerial thinking has led to the creation of the current system.


customer

demands

systemconditions

managerialthinking


for demand

IVR

3

5

4

2

1

Figure 37: Managerial Thinking maintains the status quo.

How managers think and therefore what they pay attention to, creates the organisation’s norms. It is here, in management thinking that the reasons for the quality of current performance can be found and, more importantly, the major opportunities for improvement can be identified. Organisations have been designed in traditional, mass production ways because managers have been educated to believe that this is the normal way to design and manage work. We are now back to where we began; to make changes to the Call Centre operation you need to be prepared to think of and run the organisation as a system. The change in management thinking is to move from traditional or mass production thinking to systems thinking. Steps 1-4 of the performance assessment will have exposed how and how much mass production thinking is sub- optimising performance.


174

This step encourages you to reflect on what the performance assessment has shown you and consider: ♦ what it tells you about the way managers think in your organisation ♦ how does managerial thinking need to change?

Tactics:

The team should review all the evidence collected so far:

♦ the type and frequency of customer demand

♦ how much value is created for the customer at the point of transaction

♦ the predictability of the response to demand

♦ how well the demand flows through the system

♦ what is happening and why in the processes

♦ how the various system conditions are maintaining the status quo. And then address these questions:

♦ What does all of this tell us about the way managers think?

♦ How does management thinking need to change?

To help the team answer these questions it may be helpful to reproduce Figure 38 (next page).


175

MASS PRODUCTION THINKING

SYSTEMS THINKING

top-down perspective outside-in

functional specialisation

design demand, value and flow

separated from work decision-making integrated with work

budget output, activity, standards,

productivity

measures related to purpose, capability, variation

manage budgets,

manage people

management ethic act on the system

extrinsic motivation intrinsic

contractual attitude to customers

what matters?

Figure 38: Mass production thinking vs systems thinking

Some questions to ask: ♦ Can the team articulate this distinction in concrete, operational terms? ♦ How does mass production thinking result in sub-optimal design of work? ♦ How would the work work if a systems approach were adopted?


176

Summary Part 5 - Understanding how Managerial Thinking has led to the creation of the current system.

Thinking

System

Performance Current performance is governed by the way managers think Changing management thinking is the key to improving performance The team have identified: ♦ How the current management thinking affects performance

♦ How this thinking needs to change to improve performance


177

Summary of performance assessment The team have now completed the five core steps of the performance assessment. 1. Demand

Understanding the nature of demand, in customer terms (type and frequency). 2. Value

Establishing the current value created for customers for each of the different types of demand.

3. Capability and Flow

How the system responds (predictably). The customer demand may be dealt with at the first point of contact or it may ‘flow’ elsewhere. This step focuses on understanding how and how well the value work flows through the system.

4. System conditions

Understanding the ‘why’ of current operating performance - the system conditions that govern performance.

5. Management thinking

Identifying current management thinking and how and where it needs to change, in order to improve performance.

When you know the ‘what and why’ of current performance, you can see what is possible and you can determine what needs to change to optimise Call Centre performance .


178

Notes


179

Presentation of assessment findings & proposed actions to sponsor





& management


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180

Presentation to sponsor The next step is for the assessment team to present their findings to the sponsor (top leader). If the leader has been in touch with the team through the course of their work, there will be few surprises but this will be the first time that the leader sees the whole picture, warts and all. It is worth noting that it is normal at this time for there to be stirrings in the organisation. Service agents typically behave optimistically but have some doubts about whether top management will act on what has been learned; managers of all levels may be demonstrating disquiet. The managers typically feel both 'left out' of the process and disturbed about some of the things they have noticed going on. We have found no alternative method that will alleviate these problems - it is as well that you should expect them. We have often been asked to brief the managers prior to and during the assessment team's work. This is never a successful intervention. The problem is that managers hear what is being said from their current point of view - the very thing that needs to change. The consequence is greater resistance to change amongst managers, who can easily subvert the change process. Consider for a moment what has happened to the team. They have learned to take an entirely different (and better) point of view through doing things - analysing demand, value and flow. It has, for them, been what we would describe as a normative process, the very things they have been doing have inculcated a different point of view. The managers will also need to go through such an experience (see Management Re-education, page 193); this cannot be accomplished by communications or training. The team's presentation should be in two parts: The ‘what’ and ‘why’ of current performance and proposals for re-designing how the work works.


181

The ‘what’ and ‘why’ of current performance This is the complete system picture, showing current demand by type at the various points of transaction; value created; capability - the predictability of the organisation's response; flow, waste, value work and non-value work and system conditions, showing the relationship between the system conditions and performance. The top leader will be familiar with the more usual budgetary measures and typically what happens is the leader begins to appreciate the value of the team's work as working on 'the causes of costs'. Moreover, it becomes apparent that the traditional measures are themselves impeding improvement. Having completed their presentation, the team should summarise the value they attach to taking a systems approach to managing the Call Centre. In general a systems approach results in better service, greater efficiency, more revenue and improved morale; the team should illustrate how a systems approach will impact performance with specific examples. It is sometimes helpful for the team to contrast the principles involved in taking a systems approach with the principles currently employed in the design and management of the Call Centre. Proposals for re-design Throughout the assessment, the team will have been developing ideas for a better way of working; in fact it is often hard to keep the team focused on their task - understanding the ‘what’ and ‘why’ of current performance - when 'obvious' opportunities for improvement present themselves. Now is the time for the team to present their view of the better way of working. The proposal should, naturally, be based on the assessment work and the team should predict the improvements they expect from working in the proposed way. The team's proposal for re-design should include measures they propose to use to track improvement.


182

Sponsor's responsibilities The sponsor should decide: Whether there is value in progressing with the systems approach to managing the Call Centre Whether the team's proposals for re-design should go forward to experimentation. Whether the team should conduct a staff survey. If the assessment team’s work has been limited to part of the organisation and has shown that more needs to be understood about flows beyond, the top leader may need to negotiate the opportunity for more data collection (for example in other divisions). Sometimes it may be desirable to extend the mapping of processes and identification of system conditions which affect performance into a supplier and/or customer organisation.

Whenever a decision is made to collect further data it should be in response to the guiding principle that reliable data about the ‘what’ and ‘why’ of current performance are the prerequisite of effective change.


183

Organisation survey





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184

Organisation survey At this stage in the change process, we recommend a survey of front-line staff. The purpose of the survey is twofold: ♦ Validation of the team’s assessment

♦ An intervention to inculcate/reinforce better thinking.

The items in the survey are built from the assessment team’s work. They typically ask for people’s ratings of:

♦ quality of service

♦ process performance

♦ waste

♦ system conditions.

and the items should reflect the practical nature of the assessment team’s work, using specifics as found. While the resulting data validate the assessment team’s work, the more important function of the survey is to inculcate and reinforce a better way of thinking about work amongst service agents. The survey continues the dialogue that was established in the fieldwork; it becomes normal to distinguish between types of demand, talk about purpose, distinguish waste from value work and so on.


185

Redesign of measurement system





& management


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186

Redesign of measurement system The following principles will guide the redesign of the measurement system: ♦ Measures have to relate to purpose

♦ Measures have to enable those who do the work to control and improve what they are doing.

In every case we have worked on this means: Measures of demand, quantitative and qualitative ♦ Quantitative: used in the normal way for resource planning but

used in control charts to avoid the problems associated with ignoring variation

♦ Qualitative: the assessment will have revealed the type and

frequency of demand. Action taken will dictate the need to return to qualitative analysis (have things changed?)

♦ Measures of variation: In demand (see above)

In response - through establishing capability measures that relate to purpose

There can also be value in measuring variation between service agents - although we usually advise Call Centre managers this has value only has a temporary measure (when it becomes apparent that differences between individuals may be greater than variation attributable to the system). Measures of overall performance Call Centre managers need to establish the relationship between capability and budget measures. As capability improves, service, efficiency and revenue improve. Call Centre managers need to be able to demonstrate confidence in acting on ‘the causes of costs’ - optimising service and flow rather than managing costs - ‘activity’ and ‘productivity’.


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Direct action





& management


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188

Direct action The next step is for the team to pilot the new process against the agreed new measures. This step typically requires significant support from the sponsor and from the facilitator(s). The current culture must be ‘held off’ until such time as the management community has been re-educated. However, the pilot should not be hidden from the rest of the organisation. On the contrary, it should be treated like a ‘show house’ where people are encouraged to go and find out what is going on. We usually describe the direct action pilot as a ‘fishbowl’ - it has a boundary but other are free to look in to see what is being done. Generally the team will work to some or all of the following principles in their pilot: ♦ The customer sets the nominal value ♦ Quality at the front end ♦ The customer makes one call ♦ Single piece flow ♦ Pass on 100% clean The chosen principles should be made visible for others to see what is happening. Operationalising these principles, the team creates ‘clean flow’, that is to say, all work moves on only when it is ‘clean’ - completely ready for the next ‘value step’ to deal with. The operational focus is - make the value steps work; cut out the waste. Improvement to service, satisfaction and efficiency were traced through the ongoing plots of the agreed measures of capability. For example, in Break Fix Co., the team chose to learn ‘what it takes to make one right’ - taking one call at a time and working on it until they could predict it would flow ‘clean’ and fix the customer. Within days the team had established clean flow and were progressively cutting time by working on the causes of variation1. The average ‘time to fix’ fell from 6 days to less than 1 day.

1 This work is described in a conference presentation available from Vanguard Education ‘Transformation in Action’ audio tape - see Further Resources, page 197.


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190

Constancy of purpose The sponsor (top leader) has already decided to pursue a systems approach to the design and management of the Call Centre. The assessment team has just begun - or is about to begin - its pilot work. Now is the time for the top team to make decisions. The sponsor and his/her management team must now make decisions about two things: 1. The principles they will adopt to govern: the customers’ experience, the design of

roles and the use of measures for continuous improvement 2. How they will lead the change. These are leadership choices. The leaders’ commitment and understanding will determine the success of the change from here forward. The team took the senior managers through: what they had learnt, what the measures showed, what customers were saying about the new process, what they were trying, what hadn’t worked, what did work and why and so on…. This step in the process is very important. It is probably the first opportunity for the Sponsor’s management team to ‘touch and feel’ the new process. They are now in a position to agree the purpose and principles for their redesigned organisation. The Constancy of Purpose meeting takes about two days and is typically structured as follows:

♦ mass production versus systems thinking - the general evidence of a better way ♦ mass production versus systems thinking - relevance to Call Centre operations ♦ the Call Centre as a system - the ‘what’ and ‘why’ of current performance

(using the assessment teamwork and the staff survey) ♦ the primary cause of sub-optimisation - management thinking ♦ better principles for a better way ♦ principles in action - the assessment team’s pilot ♦ decisions about customers, roles and measures.

This meeting brings together work the facilitator and team have already done.


191

Decisions about customers, roles and measures These, in our experience, are the most important decisions for moving forward. The leaders of the organisation should be clear about the principles that will govern how the organisation will look and feel to its customers, and the principles that will guide the design of roles and measures to ensure the organisation will learn and improve.

customers - the management team should now appreciate that good service is cheaper - they should want to concentrate the design of the organisation on creating value for customers

roles - the essential shift is away from function and hierarchy and to

value/contribution

measures - should aid learning and improvement and thus result in greater control than has been the case with mass production measures

Finally, the leadership of such a change can only be ‘hands-on’. The assessment team will have created very fertile ground amongst service agents. If the leaders attempt to manage this change through the hierarchy, it will fail. The more time the leaders spend in a ‘hands-on’ mode the more they will learn and the more confident they will become about what they are doing. The leaders should make a conscious decision to lead the change.


192

Notes


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OrganisationSurvey



194

Management re-education We use the term re-education deliberately. The purpose of the experience is to help managers see what is wrong with their current thinking. Then and only then should better thinking be introduced and illustrated. This is important. The nature of the change requires that managers do not see the systems approach as something ‘additional’ to what they currently do, for it is a diametrically opposite way of thinking and working. The basic framework of the re-education programme is similar to the Constancy of Purpose meeting. However, while the sponsor and his/her management team used the data to decide purpose and principles, the management community use the same data to take decisions about what to ‘give up’ and what to replace it with in order to achieve improvements in performance - clarification and understanding of the current state, informed choice about what can be achieved, relevant and practical inputs on how to go about it. The basic design of management re-education includes: ♦ systems thinking vs mass production thinking (non Call Centre examples to

establish principles)

♦ concrete exercises on systems thinking using data from this organisation

♦ the relationship between system conditions and performance

♦ identifying the ‘errors’ of current management thinking

♦ practical exercises in better methods

♦ principles established in Constancy of Purpose.

The context makes full use of the work of the assessment team and the results of the staff survey.


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196

Continuous improvement We have learned that continuous improvement is a consequence of work design - the design and management of the system. Continuous improvement is rarely achieved through projects or ‘additional’ work activity. If, as you have gone through the proceeding steps you have:

♦ designed measures that relate to purpose

♦ ensured that measures are in the hands of people who do the work (service agents)

♦ re-designed roles for service agents on the assumption they can and should control their work

♦ re-designed roles for management on the assumption that the management role is to add value

♦ established a way of continually monitoring performance in terms of demand, value and flow

♦ established leadership as being concerned with action on the system

then your organisation will improve continuously.


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FURTHER RESOURCES Book, ‘Freedom From Command & Control: A better way to make the work work’ By John Seddon, ISBN 0 9546183 0 0 published by Vanguard Press.

Book, ‘I Want You to Cheat!: the unreasonable guide to service and quality in organisations’ By John Seddon, ISBN 0 9519731 0X published by Vanguard Press. “This book will free the victims of traditional thinking’ Brian Plowman, Director, Develin and Partners

Book, ‘In Pursuit of Quality: The Case Against ISO 9000’. By John Seddon, ISBN 1 86076-042-2 published by Oak Tree Press. A controversial and challenging examination of the Standard’s contribution.

The Vanguard Audio Tapes:- ‘The Case against ISO 9000’ John Seddon speaks to the Institute of Quality Assurance (Stevenage). Running Time: 1 hours 40 mins.

‘Transforming Call Centre Operations’ The tape includes case studies from three of Vanguard’s clients. They show what can be achieved with The Vanguard Approach. Running Time: 1 hour 15 mins

‘Re-inventing Management’ John Seddon addresses an audience of Public Service managers on a better way of managing. Running time: 45 mins.

The Vanguard Guides

The Vanguard Guide to Understanding Your Organisation As A System This workbook gives you the route to understanding the ‘what and why’ of current performance such that you can manage change with confidence in your actions leading to improvement.


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The Vanguard Guide to Business Excellence The essential guide for anybody using or considering use of The Business Excellence Model. It provides distinctively different advice on method (conducting self-assessment) and content (interpretation). “Don’t do the BEM without it!” - John Seddon The Vanguard Guide to Finding Out What Matters to Customers To drive change and improve performance it is critical to know what matters to your customers. This manual has been developed to support Vanguard’s briefing of internal teams whose purpose is to find out what matters to customers and translate the findings into operational activity. It provides a framework for gathering reliable data and taking action.

Self-managed learning workbooks:-

The Vanguard Guide to Process Mapping and Analysis This workbook gives you practical tools for defining, analysing and improving processes in your organisation. You will be able to define processes from your customers’ perspective, identify and eliminate waste and establish the necessary means for continuous improvement. The Vanguard Guide to Using Measures for Performance Improvement This self-managed learning workbook helps you understand what is wrong with using traditional measures (budgets, targets, standards) for managing performance and helps you identify more useful measures (related to purpose, capability, variation) that will ensure management action leads to improvement. The Vanguard Guide to The Leader As A Model: ‘What To Talk About When Managing by Walking Around (MBWA) Leadership is the engine of change! This self-managed learning workbook provides managers with the tools, skills and tactics they need to lead learning when managing by walking around the workplace. The Vanguard Guide to Creating and Using Capability Charts Using practical examples this self-managed learning workbook helps you through the ‘what and why’ of control charts (SPC). For information on prices please:

♦ visit the Vanguard web site: http://www.lean-service.com

♦ e-mail us at: [email protected] or

♦ call us on (44) 1280 822255.

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transforming call centre operations

Documents