What is data?
Throughout our life, when we are awake our minds are constantly bombarded by information from countless sources: family, friends, radio, television and social media. All of this is data and we collect and absorb it, although we remember or focus only on what we consider important.
An old saying in management is “what gets measured, gets done”. This is certainly true with performance management data: why would you want to focus on something that is of no value to you, your family or your customer?
The interesting thing is, as I have discussed with numerous clients over the years, people tend to focus on what they can measure or what they know, rather on what others need to know or what might help them do their job better.
I appreciate this does sound rather obvious and it may surprise you how many managers (or officials) play games with data so they can look good, rather than proving that they are good.
Measuring customer service
A typical example of this is measuring customer service – something I’m sure we can all relate to.
How many times do you contact an organisation that claims to offer “world class” or “outstanding” customer service only to be greeted by the telephony maze that takes an age to navigate in order to speak to a human being?
As customers, we’ll often receive “happy surveys” by text soon after we’ve finished the call, asking how well Jane/John did, as the companies want us to feel happy with our dealings with them. However, more often than not, the last thing the company should want to know is how the employee performed, as the effectiveness and efficiency of employees these days is more about how good the system they are working with is and how relevant their scripts are to complete the task for the customer.
Understanding your system and how it works, whether it’s a personal issue or a work issue, is crucial. With this in mind you have to understand the demand coming at your system, as this tells you what resources you need to deal with it.
All marketers will tell you to get to know your customers and target them so they know about you and your services, rather than sending out generic information in the hope of getting business.
But how many managers understand their business and structure their service so they are in a position to receive this business?
Now, no-one can know everything about everything, although most people can know a fair bit about something, so going back to our customer service example, companies are trying to direct the demand flow into staff they have assembled by pre-determined thoughts about what the customer wants using scripts they think relate to things.
These poor employees are then managed to pick-up, process and close these calls as quickly as they can so they can process as many calls as possible in a day.
Activities v outcomes
What is usually going on here is that the company is focussed too much on the activity and too little on the outcome. As long as calls are handled quickly, the backlog is low and customers are happy with the staff, we’re all good aren’t we?
As I have mentioned, what gets measured gets done and the issue here is that measuring the wrong thing will generate loads of the wrong activity. The key is to recognise the wrong thing.
One of Covey’s points is to “make the main thing, the main thing”, so focussing on the most important thing to your customers would be a good start.
Companies want contact with them that produces revenue or profit or value worth (if a funded service industry, such as health). The problems start when the opportunity is missed to recognise what is of value and what is not.
I would contend that most organisations market themselves on what they can supply, rather than what they can sell or what the customer wants to consume. Consequently, they have yet to grasp that demand and supply are different.
Understanding demand
If a system is designed to meet the needs of the customer, not the organisation, then contacts will always be valuable as you are meeting your demand, so if you create the demand for your services, and your company is set up to receive the diversification of that demand, all should be well.
This variation in demand is an important point because, if you can understand your demand and classify it according to the 80-20 rule, if your front-line staff on first contact with a customer can resolve (completely) 80% of the demand and only refer 20% to managers or specialists, then customer satisfaction and value demand should grow strongly.
As we measure the success or failure of our services or abilities, we need to appreciate the demand for it and how easy or hard it is to secure that product or service. If it’s hard or there are difficulties with accessing or receiving the product or service, then there’s a fair chance a lot of your customer contact will be valueless demand.
Failure demand
Sometime referred to as failure demand, the expression was coined by John Seddon in his book “I Want You to Cheat”, published in 1992; it was initially called “demand we don’t want” and later renamed “failure demand”.
Failure demand is demand caused by a failure to do something or to do something right for the customer. Customers come back, making further demands, unnecessarily consuming the organisation’s resources because the service or product they receive is ineffective or incorrect.
In order to understand demand, we need to understand it in customer terms.
Failure demand stands in contrast to value demand. The latter consists of customer requests that are a normal part of providing a service they have asked for or wanted.
How can we spot the difference? Well value would come from typical requests like “Can I have a quote today for …?” or “I want to place an order for …” or “Can I book a service for my heating system a week next Tuesday when I have a day off?”
Whereas valueless or failure demand could be something like “I don’t understand my bill”, “the part that came isn’t what I ordered” or “the gas engineer called yesterday when I booked the visit for today.”
To find out how much failure demand there is in a system of work, managers need to study it and to understand what demand is from their customers’ perspective. How much of this demand is caused by failure to do something for them and how much is correct or of value to them?
Reducing failure demand
Identifying failure demand is the straightforward task; the management challenge is reducing and removing it. Traditional management thinkers will initially assume that the problem is caused by failures of people and processes, but tinkering about with those won’t achieve much because failure demand is systemic. To remove it, you have to change the whole system of work or a significant part of it and to undertake that needs a shift in management thinking.
System thinkers design a system whose purpose is to achieve each and every customer’s purpose, articulated and measured in customer terms.
Following a redesign such as this, not only will it allow for provision of a better service and have happier customers, you should also be able to notice a reduction in the cost of delivering the service or selling the product.
There are a couple of common mistakes in tackling failure demand that occur when traditional thinking is applied to tackling it.
Firstly, setting targets to reduce it will only lead to cheating, as failure demand is a temporary measure that sends a clear signal of ineffectiveness; rather than tackling it, measuring and reporting failure demand takes management’s attention in the wrong direction.
The only objective ought to be the eradication of failure demand, with some learning measures in place to show that this is the case.
Secondly, focussing on people and processes by allocating blame to functions or processes and working across boundaries to resolve poor processes. Any minor achievements (one could say “quick wins”) in marginal falls in failure demand can hoodwink management into believing they have the right solution. This is to fail to realise that failure demand is systemic and can only be eradicated by a change to the system.
Thinking about your own data needs, what do you yet need to discover about your own business to make it better? Do you understand the demand from your customers and is it all valuable, or are you really measuring failure without recognising?
