The housing regulator is not happy; the service being provided by local authorities and social landlords is not good! For example in 2009 the Scottish Housing Regulator said that just under half of the landlords they had inspected were poor or only just adequate. I’m also fairly certain these problems are not unique to the Scottish property sector.
In my experience it’s not unusual for a repair to take up to 200 days, voids to lie empty for months, hundreds of names to be on the allocations lists, and rent arrears to be in the millions.
What’s being done to tackle these issues and solve the problems? A number of things actually, but they’re the same things that were done last year and the year before that; you know the old cliché we keep on doing the same things but expect a different result.
What about you, are you ready for a change?
If you are then over the next few weeks I’m going to let you have a series of reports on the problems in housing and how to fix it.
The first in the series has been written by Caroline Rodgers. Caroline has worked with me for the past nine years and knows housing as well as any hotshot guru. You can download the PDF from here.
A few weeks ago I wrote about how the Scottish Government had (in my opinion) got the solution to public sector planning badly wrong. (Local Authority Planning - How the government and the lean gurus got it wrong.) They had thought that the matter was merely about getting cases in clean. Whilst this is an issue (for most organisations) it’s really only the tip of the planning iceberg when it comes to making a change.
You see simply putting in a pre-application process actually means that for some, they are now looking at the application twice and therefore have more (not less) work to do.
The pre-app is important but so is the method by which it’s carried out. I believe the that government’s intent was to simply have a quick meeting or phone call prior to application being sent in, to make sure everything was fit for purpose. But that doesn’t seem to be the way it’s working. I’d be keen to hear from you if you either support or have an alternative view of our findings.
However the pre-app isn’t really the big problem. As I’ve blogged about before, the issue is the performance indicators combined with the volume of work pushed to the planners. As they (the planning officers) are trying their best to do a bit of work on all the cases in their queue, what actually happens is that everything takes longer. Some planners have openly told me that if an application goes over the statutory indicator they leave it, it’s already late so they’re better concentrating on the ones that they can get through in time.
The result of this is that two people suffer: the customer, who may have to wait an inordinate amount of time to get a decision and the planner, who is under a great deal of stress to do a ‘bit of everything’.
The fault lies not with the planners but with the government and management who refuse to see that setting an arbitrary target, pushing work to the planners and focusing on utilising and activity rather than throughput has actually made the system worse.
So what’s the answer? Dougal Mather one of our project experts in Vanguard (Scotland) has written a comprehensive report and made a video that lays out exactly what you need to do to fix the problem.
Also bear in mind that the solution here is not just for planning departments but any environment which has casework as the work method. You can get the video and report here.
If you are in local authority planning, grants distribution, information technology, pharmaceutical, roads resurfacing or any other project environment, stop what you are doing and put the kettle on because the information contained in this blog could be the most important you will ever get your hands on.
At the latter part of last year I was asked to speak to the great and the good in Scottish local authority planning. The purpose was to give my thoughts on how to change planning for the better. The advice was simple and unequivocal ‘get knowledge about how the system works before you make a change.’
I guess I must have been having an off-day because for whatever reason many went off and ignored this advice and missed a big trick in planning. I’ve studied planning departments at the tail end of the lean gurus as well; they also failed to see the answer.
So stay tuned as I’m about to reveal all. And if you are one of the few that will actually go away and do something as a result of reading this blog you will see results very fast.
Here’s what happened in planning. The boffins decided that the problem was a lack of clean information coming into planning departments. This resulted in plans being sent back to the client or agent for rework. Fair enough, if you studied planning as a system you would indeed find that around 20% of applications have missing information.
The result of this revelation was two actions, the first was to create a detailed specification of how the plans should be drawn up with a list of required information and the second was for all proposals to be subject to a pre-application meeting between the client and/or agent and the planner. Both of these rules have now been embedded in the system.
But nothing much seems to have changed. The authorities I’ve seen are still struggling to meet their performance indicators and the planners are drowning in a sea of work, even more so now that they have to have pre-application meetings. So why didn’t the solution work?
The answer was simply incomplete, in-fact it only dealt with one small aspect of the overall problem, akin to trying to lose a ton of weight by replacing your mid morning bacon butties with an apple, sure it will help a little, but you’re not going to see a significant change.
Let me lay out the real problem (actually there are two). The first is that in the planning departments I’ve seen there are simply too many open cases; the planners are flooded with work. This happens as a result of wanting to tell a client that their case has been seen. But it causes a big problem, multi-tasking.
What happens is that in an effort to get more done everything takes longer and the lack of focus causes errors. Think of it like this, imagine you have 10 tasks to do and you try to do a little of everything. The result is that you are constantly picking up and putting down the tasks. Every time you pick something up you have to take a moment just to remember where you were before you can start again. Consequently everything takes longer and is more likely to include mistakes.
The second issue exacerbates the first. Misguided ministers and managers believe that we need service standards to improve our performance. But if they knew how to look they would see that it’s making us worse not better.
In planning there is a 56 day service standard to give a decision on an application. And the clock doesn’t start ticking until the application is error free. Some planners have told me that, because they have so much work to do and there is pressure to hit the arbitrary 56 day standard, applications ping-pong back and forth until they are fit to enter the process.
And when the application is in the process the 56 day service standard causes student syndrome. Cases get opened and then put down again until nearer the deadline, just like a difficult essay. Planners flip-flop between handling easy cases to hit that standard and trying to break the backlog of the more complex ones. Sometimes an application goes over the 56 days and it gets left, the rationale being that service standard is breached anyway so it doesn’t matter if the case takes 56 days or 256 days, either way it’s late.
So what can be done to fix the problems?
Create a list of all planning applications in date order, oldest to earliest.
Create two schedules, the first for pre-applications and the second for determinations.
Schedule the work for the technical clerks and the planners.
Limit the release of work into the flow. Only allow planners and tech clerks to work on only a few cases at a time.
Keep the service standard away from the planner; better still remove it all together.
Create a new rule, work on the case until it’s finished, do it as fast as you can but do it right.
Have a system so that the manager’s job is to help the planner if they get blocked.
If a case is not in the flow then it’s not open. This will give you visibility over the exact size of your backlog (which will soon disappear).
But before I’ve even posted this blog, I can hear the objections.
‘Our customers will be furious that we haven’t looked at their case’- not as angry as when you tell them that you’ve looked at it umpteen times and it’s still not complete.
‘I can handle lots of cases at one time’- not if you’re a human you can’t.
‘Our planners need the service standard to motivate them’- get real!
The problems I’ve discussed here are not restricted to planning. They happen in the distribution of grants, information technology, pharmaceutical, roads resurfacing or any other project environment.
To gauge if you are in a project environment have a look at the touch time of the work, if it is high in relation to the throughput time then it’s likely the above rules will apply to you.
For more information on this subject, check out our free videocast made by Daniel Rodgers and Dougal Mather of Vanguard Scotland.
And finally I think there is a bigger lesson here than just planning, it’s the one I urged the government to take. “Before you make a change get knowledge”. If you do you will see the whole problem and create a complete solution.
Q:In Scotland in the addictions field we are all facing a huge shift in emphasis from a treatment modality (i.e. Methadone prescriptions) to Recovery (i.e. focussing on the holistic person - improving quality of life). This is significant in terms of service redesign and a system overhaul.
I just wondered what kind of support you could offer - we want to change how we deliver services and the biggest problem we have is that our current system is under so much pressure we have no room to make that turning space. How do you create turning space when the front end of your system is under so much pressure - the mid end is at capacity and there is little throughput at the backend. Existing systems are convoluted and confusing for clients to negotiate and we are facing targets from the Scottish Government that have no bearing on whether or not the service we provide is of quality and what people want.
Stuart’s A: The question needs to be answered in two parts. The first is how to create capacity and the second is how do you start to improve the wider system around addiction? Let me try to deal with each separately.
Creating capacity in the current system
Without being glib, to create capacity requires knowledge of how the current system works today. And in your system you have to know two things. The first is the type and frequency of demand into the system, i.e. who wants help, how often and what help do they want. When you get this data you might find that there are some people who would be better served elsewhere, or some who are having to make multiple demands on the system to get what they need, hence destroying capacity.
The second piece of information you need to get is your capability to serve those that need your help. I.e. how often do they get what they want and how easy does the system make it for you to deliver what they need?
Let me give you an example. A few years ago we did some work in cancer care. They had similar problems to the ones you describe. As you can imagine it was tough but very satisfying work. We worked with the medical staff and hospital administrators to teach them how to study their system. They soon found that the nature of demand was predictable in terms of frequency.
But what they also found was that there were a percentage of the clients referred from doctors that should not have been referred and they made plans to work with doctors who needed additional help in the pre-diagnosis stage. Additionally there were some patients that had been given the all the clear many years before and therefore had no higher likely hood of contracting cancer than someone who had no history of cancer. There were obvious opportunities to reduce the demand into the system.
Whilst I can’t and wouldn’t say that the same would be true of your system, gathering data on the type and frequency of demand would be my first port of call, it’s likely to provide useful data if not about how to reduce demand, then to prove the true levels of funding and staff you might need in your system.
Additionally when we studied the flow of a patient through the cancer diagnosis system, it was obvious that the process was cumbersome, slow and filled with red tape. And when systems are slow to respond to what matters to customers, they (the customer) tend to place more demand on the system to find out what’s happening.
Hence it’s likely that you would get some benefit studying what’s involved in your service provision. You may find that there is unnecessary bureaucracy and policies that would be better removed for those afflicted with the addiction and would reduce the cost of running the service.
Having created capacity by doing this I would suggest that it’s incumbent on you to make the wider system better and actually do things to help remove the addiction (yes a statement of the obvious I know). But the question is by what method. I will deal with this in the second part of my answer.
Optimising the larger system and improving care throughout the system
As in my first response the answer to actually improving the whole system lies in understanding the points of failure in the system. It may be that those points give the clues to what happens when a methadone dependant citizen reaches out for help and is let down, thus further exacerbating their addiction.
To provide insight would require, in my opinion, a slightly different approach. Rather than working forward, you work back. Take 20-30 people who are in the system currently and work back though their typical journeys. You may have to involve many different agencies: benefits, housing, the criminal justice system, accident and emergency, the local GP practice, and of course your own system. As you study a typical journey you will no-doubt find predictable points at which help might have been effective and welcomed, or points at which help was wanted but there was no method for its provision.
Though this might prove a difficult task I’m sure it would be a worthy one. My experience in multi-agency work with the criminal justice system and local authorities is that with the right leadership much can be changed.
(A story of cold sausages, a string quartet and climate change protestors)
I was in London last week with some friends. On Friday morning we were sitting in a restaurant having breakfast. Then my blackberry went ballistic; message after message telling me that the link to the free guide on presenting data wasn’t working. And to make matters worse the team in the office didn’t have the PDF of the guide, so they couldn’t help.
Big problem, you see we use a web hosting company in the US and their system was down. So the first thing I did was to drop my fork and knife and ping a note back to everyone to let them know we were trying to resolve the situation.
Eventually I tracked down one of the team (who was on holiday) who had a copy of the guide (for who didn’t manage to pick it up click here) and we got it sent again as an attachment. And I as I chewed my way through my, now freezing cold, bacon and eggs I pondered the messages.
Trust is fleeting. It doesn’t really matter how much good you think you’ve done it can all go pear shaped in a moment.
Reliability is king. I continually hear people moaning that things are tough in the current climate. So you have to make the most of every opportunity. This is the same in the public sector, if you don’t keep your promises you get hit with failure demand, the cost to me was a cold breakfast, what would it be for you? So make sure every process delivers.
Knowledge will save the day. Stuff happens, things go wrong, I get that. But the key is to know the predictable nature of the failure. Is it a one off or is it predictable? The problem is that most managers don’t know, as a result they react to special causes as if they are every day occurrences and make a storm in a team into a hurricane. So you need measures that help you understand and improve performance, do you have that?
I was now firmly in the bad books with everyone. Denise, for spending two hours on my phone (I hope you appreciate what I do for you), Sean for bugging him on his holiday and you for a missing link. But there was light at the end of the tunnel and another message.
We left Covent Garden to the sound of music, not the Julie Andrews musical, but a string quartet. We stood and watched for a while, they were brilliant. Then they upped the ante, they started dancing with their violins! The crowd went wild and started throwing money at them.
And yes there’s a message here, if you want to do well, even during tough times, you need more than just reliability…
Be unique. This can come in the form of a product, a service, or how about a guarantee. Most people can’t offer a guarantee because they are too scared that they will mess up. Though that problem soon disappears when you have knowledge about how the work works.
And if you’re in the public sector and you’re reading this and wondering how it applies? My thoughts are that what would make you unique would be the delivery of consistently high service at low cost, do you agree?
Having seen the quartet I now had a warm feeling, everything was all right with the world. Or was the warm feeling something else. Was it climate change? The protestors in London that day certainly believe it’s the latter. And don’t get me wrong I’m all for a good rant and saving the planet, but…
We wanted to cross the road and the protestors were shouting at everyone as they crossed the line; time for another lesson. In some sectors your message might not be to everyone’s taste, so don’t make it worse by being difficult to deal with (one pedestrian got so infuriated he even burst a protestor’s balloon; that could have gone nasty). Here’s the lesson:
When you want people to comply with your message or process, don’t infuriate them by being difficult.
We ended our weekend by a visit to a Japanese restaurant chain in terminal 5 called Wagamama, it was brilliant. And it had a number of amazing characteristics:
They told us when what was going to happen and when we would get our food. Then they delivered on their promises.
They had a simple method to keep track of who was getting what and who still had to get their meals. They wrote the number of the dish on the menu. That way if a customer didn’t get the right food, the waiter knew before the customer.
They were unique. The food was unusual but very tasty.
It was easy and flawless.
Isn’t it funny how things go full circle?
P.S. This week I have an e-book of some questions I’ve answered over the past few months. The questions range from how to improve support for drug users, how systems thinking works in businesses that need to grow and get new clients, whether Kanban is appropriate to service organisations, and a few more. You can get the short book by clicking here (and yes I’m praying that it works).
The global economy is in a mess, why? Simple, managers were more interested in making money than innovating and solving customer problems; had they done so profits (not losses) would be the obvious outcome. In the public sector cost reduction is the by-product of such actions. Which begs another question, how do you innovate? The answer: by being in the work.
Managers say “We can’t innovate, do you know how much it costs?”
In some cases they may be right but not all innovations cost money. So let’s start by defining innovation. When you think of innovation typically what comes to mind? The iPod, The Sinclair C5, The Segway, or maybe the new airbus. And associated with these projects is typically a massive spend for all too frequently - a poor return on investment.
But what about the other type of innovation the type that starts by with identifying a clear customer or staff member with a problem and fixes it.
In my work I never cease to be amazed at the how many ideas are just waiting to be released into the consciousness of an organisation. What is also interesting is that the ideas are always born out of getting closer to the work, not further away, i.e. you won’t get flashes of inspiration by spending a few days in a hotel or visiting another organisation to see how they do things.
And some of these ideas are truly remarkable. Our country really needs remarkable right now. I experienced remarkable last week at the DVLA, and if they can do it…
On Tuesday I had to renew my road tax. I usually spend an hour trying to find all the forms and then stand in the queue at the post office. This time I decided to have a go at doing it on line. I say have a go because I expected it to be rubbish. But it was brilliant. I loved it. I told about twenty people, and now I’m telling another one thousand.
What if some of the people I told renew their tax on line, because it was so easy, also buy a private registration? The DVLA have saved, and generated money at the same time. They’ve freed activity that was using mundane brain power that could now be used in further innovation. What if the DVLA did motor insurance, or sold cars on-line. Why not?
The real secret to what the cool people at the DVLA did was they started from the customer and worked back, not the other way round, I hope the person that did this got promoted, if you know them let me know?
Over the years we’ve been proud to have nudged our clients to innovate. I say nudged because what we did was to show them how to find the ideas, as opposed to a cook book of recipies. But what’s really important is that they now have the knowledge about how to innovate and can replicate their actions over and over again. And once infected by the bug they tend to just keep doing it. I saw a great sign on a van yesterday, it said:
“Knowledge combined with passion is an unbeatable force”
How true!
Here’s a few notable nudges:
Edinburgh City Council - First time fix on potholes
Lothian and Borders Police (lost and found) - Lost items in clear plastic bags so quicker and easier to find
West Lothian Criminal Justice system - Give police access to fiscal reporting to reports easier to submit
Haldane UK - Numbering boxes containing handrails so that fitters know which ones to open first
VELUX - Training staff to deal with 80% of all demand and having experts on hand so that other 20% could be handled whilst customer on the phone
Haldane UK - Changing the staples on the boxes so that clients didn’t cut their hands
Dundee City Council - One assessment for elderly in need of care
Edinburgh Council advice services - Benefit checks over the phone
West Lothian Council Housing voids - inspector meets new tenant to discuss what needs done to the house.
Next question is how do you innovate? Here’s the best five ways that I know how:
1. Study demand (listen, look, read e-mails, read letters). Look for customer requests to which you currently say no. Find out what it would take to say yes.
a. VELUX did this and now sell windows direct.
2. Watch people doing their work:
a. When I got a puncture repaired last week I wondered why no-one asked to give me a quote for my car insurance when I was in the depot. Instead they called 3 days later during dinner.
3. Be a demand, follow it through to the end look for friction:
a. In planning departments the main problem is that the planners have to constantly multi-task so everything takes longer. If management followed the flow they would see.
4. Be a customer:
a. The food at David Lloyd health club is terrible, maybe if Mr Lloyd ate his own spaghetti bolognese he would change the food.
5. Be a front line person for a day, week, month:
a. If the senior management of the HBOS spent a day being a corporate mortgage adviser they would see how stupid it is not to give them a direct phone number so that clients can call them direct rather than going through the call centre.
So you’re an innovator the next question is how do you become remarkable? I will answer that next week. And if you want the above list in a handy check-list that you can pin on your wall you can get it free here.
Regards
Stuart
PS If you haven’t downloaded the first 4 steps of my presentations system click here now
PPS. If you think a friend or colleague may like this blog please pass it on.
As many of you know, I’ve just been on holiday. And like most people I bought some books at the Airport. The first book was by James Patterson, the second by Jeffrey Deaver and the third by a new author.
What I loved about the first two books was that they had a really clear premise, someone got murdered and someone else had to find the killer, and second there was a clear structure to the book and the characters. There were easy to read.
But the third book was different. I just couldn’t figure out what the book was about. I had to keep reading the back page to try and pick up the thread of the story. Also there was no clear structure, the book kept changing locations and characters. After sixty five painful pages I just gave up and left the book in the villa for someone else to read, after-all I suppose there’s a chance it was just me (it wasn’t).
I realise you may think I’m a bit sad but I just couldn’t help making the connection between books with no premise and no structure and presentations with the same problem.
I have sat through so many presentations, made by external and internal consultants, managers and leaders where there was a clear remit to present the findings of an analysis, explain why the problem occurred and then point to the direction of the solution, but they failed to engage the leader. This happened because there was no clear definition of the problem, premise, or coherent structured points for how to improve the business. In short the leader got lost, bored, and like me on holiday, lost interest in the story.
What’s worse is that in most of the cases, the analysis and the solution were good. But the communication was poor. Ultimately the consultant never got a second chance to get in front of the leader again. In worst the worst case, the presenter’s career stalled and in the end they left the business, all because they didn’t know how to structure a presentation.
Now think of a subject that you love to talk about, and write about; planning and making presentations is mine. In addition to teaching this subject for 10 years of my life I have probably spent more money, time and effort in learning about presentation design and delivery than on any other business activity.
If you have the need to build a presentation fast, and want to improve your skills in the area of delivering presentations that by their very nature contain data, and analysis, I have written a 19 page report that you can download for free.
It includes
A structure for building starting your presentation that will immediately engage your audience
How to build the outline of any presentation within 15 minutes
How to check that the points really answer the question
The report entitled “How to create change from your presentations Steps 1-4″ is free and offers real value as a stand alone product.
The report also contains additional links to additional resources to help you design and deliver change management presentations. You can download the report at http://www.presentationsthatmakechangehappen.com/vs
If you like it feel free to pass this email on to a friend or colleague.
As usual I’m keen to know if you found it useful, and if you have any questions on this subject please drop me a note or post a comment on the site.
Regards
Stuart
PPS. If you think a friend or colleague may like this blog please pass it on.
Dear Mr Brown, would you spend a day with me to see what I see?
If you did you would see housing associations failing because they are scared to challenge the regulator. They use service standards that cause repairs to take longer than they should. They use public money to take residents to court because they haven’t paid their rent, even though much of the failing is because of the housing benefits system.
If you did you would see local authority leaders who spend no time at the front line of failing services like adult elderly care, and child services. As a result they have little information on what to do to improve the service, but are quick to blame hard working front line staff when something goes wrong.
If you did you would see ministers who cite special causes when there is a failure of public services, rather than getting to the root cause of the problem and asking if it is predictable.
If you did you would surely stop the waste of spending millions on pointless CRM systems in the public sector.
If you did spend a day with me in the work, you would see private sector employees beleaguered by incentive schemes, targets and outsourcing; come to think of it you’d see the same in the public sector.
If you did spend some time in the work you would see that our lack of competitiveness is not because the workers don’t care but because the leaders don’t know how.
If you did you would see a criminal justice system that doesn’t work because of functionalised work design, a lack of cross functional measures, and no common purpose.
If you did you would see that our call centres don’t work because managers are obsessed with measuring number of calls per operator, time to answer, wrap up time and cost per call. You’d notice that these same managers think that service can be improved by outsourcing to India without realising that often fifty percent of their calls are failure demand.
If you did you would see that our manufacturing organisations don’t offer reliable delivery times or great product quality because they still care too much about batch size and efficiency rather than fulfilling customer demand.
If you did you would see managers wasting their time doing 1:1s, quarterly reviews, and annual appraisals.
If you did you would see why chartermark and investors in people don’t work.
If you did you would see that our banking sector will continue to make the same mistakes because the leaders haven’t realised that their failing is in not understanding the dysfunctional consequences of bonuses and incentives.
And most importantly if you did, and asked your ministers to do the same, you would have your eyes opened about how to fix the whole thing. You see I don’t doubt for one minute your intent only your methods.
Have you gone above and beyond for customer lately?
Have you ever spent time helping a member of staff way beyond going home time?
Have you made your boss look good even though you did all the work?
Have you ever made a member of your team look good, even though you did all the work?
Have you ever challenged a leader at least three levels above you because you knew their policy was wrong?
Have you ever congratulated a subordinate for failing, because they tried?
Have you ever corrected a member of staff because what they did was good but not remarkable?
Have you ever spent a whole week just being a front line member of staff and seeing what it feels like?
Have you ever sent a thank you card to a member of your staff for no reason other than you think that they are fantastic?
Have you ever taken the credit for someone else’s failure?
Have you ever sacked your least profitable clients and started again?
Have you ever done something at work that really terrified you?
Have you ever written a paper on the future of your industry, posted it and looked for comments?
Have you ever spoken up at a meeting and discussed the undiscussable?
Have you ever asked the questions “By what method did you set that target? How will you evaluate that policy? What measures will you use to test your method?”
Have you ever said no to a piece of business, when you really needed the money because you knew it was the wrong thing to do?
A client told me last week that his group chief executive turned up and questioned his measures in the contact centre. The client knew that what mattered to his customer was to have calls handled one stop, so that is what he measured. He still captured data on time to answer, abandon rate, and time per call but this was kept away from front line staff and used for resource planning purposes. The group chief exec said it was silly to try to handle calls one stop as better service would cost more money, and anyway customers didn’t care how many people they spoke to, just so long as they got their call answered.
The problem is that because the group chief exec says it, then it must be true, mustn’t it? Probably not. In my experience the more senior the executive the less they really know about what matters to customers, and what’s going on in the work. In other words they make assumptions, assumptions that can be very damaging to the business.
In this case the client had data, he showed the group chief exec the demand analysis and let him listen to some calls. It was clear that customers who got passed around the business either got angry or hung up.
We had also done some analysis on cost. We found that initially learning how to handle more variety took a bit longer, but overall call volume dropped because we stopped people having to call back. And within a short while the time taken to handle the call was no longer than it was in the old system, and though the customer was getting what they wanted more often.
Assumptions without data are dangerous. Here are a list of poor assumptions that we frequently make in both the private and public sector, much to our cost.
Measuring activity is a good thing.
People have control over their behaviour at work.
It’s better to measure unit cost rather than measure end to end
Targets work
Incentives work
Giving people a due date in projects will make them deliver on time
Putting low cost low skilled staff at the front of a system will reduce costs
Off shoring work will mean you make more money
The public sector is different from the private sector
Management should be remote from the work
Government KPIs provide the right information
Most managers don’t challenge their current assumptions because they have little data with which to make informed decisions; it’s not their fault, it’s the system. I promise you that if you take one of the assumptions I have listed above, pertinent to your situation, and go and get some data you will learn something astonishing about your system. It really all depends on whether you are brave enough to challenge your current assumptions. Are you?
As usual let me know
Given that there is a recession going on, I know because the news never lets us forget, the question I’d like to address today is how to continue to prosper during hard times?
A few weeks ago I covered the issue of cutting costs, so there are only three other alternatives, get existing clients to buy more, get existing clients to spend more, or find new clients.
I’m also making the assumption that operationally you are making sure that everyone that asks to buy is allowed to and that you have done the maths and you know which clients are most and least profitable. So what’s next?
The next stage is to enhance and/or design new products and services, but how? The exercise is called ‘finding out’, named so because it’s about finding out what matters to your customers and then designing your products, services and operations such that you can gain a competitive advantage in the market. And also, this is not restricted to the private sector it can be used by the public sector too.
The whole process is shown in figure 1. below.
Figure 1. An overview of the finding out process.
The idea is to study all the point of transactions with you customer and find out what they what that you don’t offer or hate that you do.
Let’s define points of transaction; this refers to any time a customer interacts with any part of your product or service. Let me give you an example. When I go to the gym there are quite a few different transaction points from the time that I enter the car park to the time I leave. On entering the car park the barrier has to raise (1), I have to park (2), I have to go through the doors (3), go through the turnstile at reception (4), open my locker (5), go to the loo (6), get on and use a CV machine (7), use weights (8), return to the dressing room and use the shower (9), buy a coffee (10), and use the internet (11). Note depending on the demand I place on the system, e.g., if I’m playing tennis or taking Matthew, my youngest, to the soft play, the points of transaction change.
To understand all your points of transaction take a value demand and simply list all the different bits of the product and service that a client touches.
The next part in the system is to find out what is important to your customers when transacting with the system. So phone a few clients and go and see them. Simply ask the question when you have to do X, for example enter the car park, open your locker, what is important to you. Asking this question will give you a list of important factors, e.g. when I get to the barrier I want it to open first time, I want the turnstiles to work, I want all the machines in the gym to work.
Now go to the top of the list and ask “on a scale of 1-7, how important is this”, and having done that go back to the top of the list again and ask “on a scale of 1-7, how well are we doing?” See figure 2 below.
Figure 2, sample questionnaire design.
Three things will happen, 1. There will inevitably areas where you fall short, 2. There will be areas into which you are putting lots of effort that no-one cares about 3. You will get some amazing ideas to improve or create new stuff for clients.
But the secret of a well performing organisation is a system that is designed to align performance with what is important to the customer.
If you plot your answers on a graph, it will probably look something like this:
Figure 3. This chart shows the relative importance vs. performance on a range of hypothetical items that might appear on a questionnaire.
Having identified the difference between what matters to customers and your performance the job of the leader is to bridge the gap
I first did this exercise with a client 10 years ago. I have to be honest in that the client’s service was already good so I wasn’t sure what we would find, but this method is also used as part of a wider analysis when designing a company strategy, which I was doing. But the results were astonishing.
The company in was a fireplace manufacturer. Their clients said that what was important to them was quick delivery in small batches, correct invoices, boxes that were easy to open, staples put into the box in certain way so that they weren’t sharp. They commented on how they wanted the designs to look, how and when to discount. In short the told the manufacturer how to re-invent their business, and they did just that. By doing so they turned around the company from a loss making situation into profit within 12 months.
So why don’t you give it a go?
I can guarantee you one thing, if you do it, you will get more business and perceived service improvement, even if it’s just because you are out talking to customers about their favourite subject, them!
As usual let me know your thoughts, and if you want a full case study on how to do strategy let me know and I will write it.
If you are a housing association the regulator is not your customer.
If you are the fiscal you are not the customer of the police.
Local authorities do not exist to serve councillors.
If you are the private arm of a public private partnership the council is not your customer.
You are not the customer of a down or (upstream) department
There are no internal customers, in-fact the concept of internal customers is a stupid one.
Head office is not your customer.
As long as you spend time serving the wrong customer your costs will rise proportionately.
If you are confused about who you are trying to serve ask this question “on the day we started this system who was it designed to benefit?”, answering this question and ensuring that every policy, process and measure is aligned to helping the customer get what they want is the only way to improve service and cut costs.
