Featured Product
This Week in Quality Digest Live
Quality Insider Features
NIST
Don’t underestimate the power of telling your story
Oak Ridge National Laboratory
Hafnium oxide key to novel applications
William A. Levinson
Deciding whether you need CAPA or a bigger boat
Matthew T. Hughes
Two engineers explain how heat waves threaten everything from cars to computers

More Features

Quality Insider News
To be unveiled during PACK EXPO Las Vegas at the Hiperbaric booth, No. N-10857
Educating the next generation of machinists with state-of-the-industry equipment
In a first, researchers have observed how lithium ions flow through a battery interface
Air-extend/spring-retract moves probe out of the way
Precision cutting tools maker gains visibility and process management across product life cycles
Expanded offering includes Smartscope E-series for 3-axis video measurement
Accelerates CAM programming time 80% to make U.S. manufacturers more productive
Pioneers new shape-memory alloys
A Heart for Science initiative brings STEM to young people

More News

Tripp Babbitt

Quality Insider

When Standardization Is the Problem

Customers need service organizations that can absorb a variety of demands

Published: Wednesday, November 14, 2012 - 14:20

American management has a long-established industrialized mindset in service industries. The trend started in post-WWII when the problem being solved in manufacturing was how to quickly provide products to a world that could only turn to the United States. This was because the competition (i.e., the rest of the world) had been devastated by the war. It didn’t matter how good the products were, so long as they satisfied demand.

Three questions made things quite simple for the industrialized mindset:
• How much demand?
• How long does it take to make things?
• How many people do I need?

As manufacturing competition recovered, Europe made the same mistake the United States is making today. It copied the “success” of American companies. One country stood alone: Japan, which looked at the problem of manufacturing differently with the help of several people, including W. Edwards Deming. Many Japanese manufacturers today enjoy success due to these folks.

One manufacturer stood out. Toyota, and the Toyota Production System (TPS), became all the rave as the company put the Big Three (now the Detroit Three) on their heels, culminating in the financial crisis in the 1970s. Taiichi Ohno of TPS fame became the new hero, and Americans have been trying to copy Toyota’s success ever since.

One problem with copying: It always leaves you behind those you try to copy.

Unfortunately, the design of service work has been flawed due to the industrialized mindset borrowed from manufacturing. Service organizations, looking to repeat the success of the TPS, have started to adopt some of Ohno’s thinking. However, two problems remain:
1. The industrialized mindset
2. Copying always leaves you behind

A third problem is that service is different from manufacturing. However, none of these problems has stopped service organizations from using Japanese words, trying to solve the three issues mentioned above as cost problems, or asking displaced manufacturing folks to tell them how to adapt manufacturing-type thinking to service. Service has gotten worse and more costly; Americans have lost the ability to lead and think.

I have had many interactions with “industrialized copiers” who assure me they are making things better. If they only knew. Nothing draws more comment than talk of standardization. Many of the industrialized copiers have claimed that standardization creates consistency and high quality. When challenged, you are given the common-sense speech, but little evidence is ever provided.

So how does one skip the rational conversations and find the truth? As usual, in a quality world, data set us apart. These are not the measures typically used—those that seek compliance to standards—but other measures that matter to customers. In service, a simple way is to measure failure demand, first articulated by John Seddon, which means a failure to do something or do something right for a customer. Fallout from poorly designed service systems causes customers to place failure demand on organizations.

Too often, standardization in service is one of the causes of failure demand. My favorite challenge to readers is, “Measure it in your own organization yourself.” Evidence can be very convincing.

The rational, common-sense conversations don’t do this because the underlying assumption is that standardization creates consistent service. This makes perfect sense, but is a common and misleading assumption. In service, customers need service organizations that can absorb the variety of demands. Standardization prevents the absorption of variety all too often.

One contact center I worked with had the commonly found scripts for the agents to follow to “create consistency for the customer experience.” When I studied their system, the amount of failure demand being driven in was greater than 70 percent. Standardization wasn’t the only issue, but it wasn’t allowing the variety of demand to be absorbed, causing customers to call back and get answers or give up. This organization had locked in the waste by conducting quality checks on these same agents for compliance. No one was asking whether the customers got their problems resolved, just whether the agent complied with the script, were friendly on the phone, and passed other quality checks that did nothing to stem failure demand.

Demand-driven service organizations almost always have this problem. The amount of failure demand typically runs between 40 percent and 70 percent for private service companies and between 60 percent and 90 percent for government entities. Regardless, it doesn’t have to be this way.

So the next time someone tells you that standardization is a “spectrum” or some other foolishness, go look for yourself and see if it is entrapping or enabling your service design. You may be surprised by what you find... if you know how to look.

Discuss

About The Author

Tripp Babbitt’s picture

Tripp Babbitt

Tripp Babbitt the managing partner for The 95 Method - Executive Education and Advisors. The 95 Method is about giving organizations a method to use new theories to grow business.  Babbitt can be reached at tripp@the95method.com. Reach him on LinkedIn at www.linkedin.com/in/trippbabbitt

Tripp also has a podcast and YouTube channel called, The Effective Executive.

Comments

Form-alization

Thank you, Tripp, just a few words, from my stand-point. When a consulted company asks for forms only, but not to understand what's behind the forms, nor to be aware of their substance or their following use, well, that is a standardization problem. All too often we meet process and product failures, the root cause of which is diminished workers' attention due to standardized, repeated handwork. Women seem to be more resistant than men, to boring working. To reduce boredom negative effects, some 30 years ago, Volvo introduced their "island" assembling process, where the workers assembled cars from scratch, kind of kids' Lego game. But Ford's approach won the match, and we see millions people doing the same thing from eight a.m. to five p.m. - but surely not with the same effectiveness. 

Variety, variation, and standardization

I enjoyed reading your article.  I agree that many manufacturers have missed what variety means to their business.  The three questions you postulate for manufacturers “how much demand…How fast to make...how many resources (people)…” certainly applies to a manufacturer that has the mentality of producing without understand the customers’ wants.  Certainly, in the post-WWII era, customers were far less discriminating and more apt to accept what they could get instead of what they want.

I would contend that standardization is a solution to eliminate variation and create a foundation to deliver variety that a customer needs to be satisfied.

I believe the differentiation between “variety” and “variation” is missing from service organizations (and many manufacturing organizations!) and that “standardization” is a scapegoat for not recognizing the variety a customer wants.  I believe that standardization is critical for success and it reduces variation (undesirable process changes) and creates the platform for variety (different customer needs).  I believe many manufacturing individuals not well versed in the “language of service” exacerbate this phenomenon.  For example, when a manufacturing individual discusses “change over” and uses examples of the latest WhizDing machining center or the DooHickey press set-up, a service person is lost.  When the manufacturing person understands the language of the service process and can discuss “change-over” in terms of completing documentation, follow-up, etc between calls or between functions (taking calls, writing reports, answering emails, etc.) then the service person can begin to relate and understand the concepts.  When a manufacturing person develops “work instructions” and copies (very sinful!) the same structure to a call script thinking it will be better; misses the point of the interaction a service person has with their customer.  When a manufacturing person understands that each customer is a different “model” or “configuration”, they can begin to communicate the essential items that standardization can provide benefit and provide tools to help manage the variety. 

Standardization done well, builds the basis for the variety needed to allow each service customer as unique while still respecting a companies need for consistency.  Things such as computer systems, phone systems, email platforms, communication between employees, etc.  left non-standard creates huge problems.  Imagine the service center (I’ve been in one!) that has 3 different programs to enter customer information, to find the customers answers, and to follow-up with the customer (if needed). 

I think you hit the crux of the issue with “…poorly designed service systems causes … failure demand…”  You provide an example of scripts for agents to follow to “create consistency...”  I would suggest that a well-designed script does just that and allows for the variety needed.  As you continued with your example, I would contend that the quality checks, not focusing on customer resolution, friendly, etc. are not caused by consistency or standardization, but caused by a lack of company vision to the needs (dare I say voice) of the customer.  Not listening to the customer is certainly a much different issue than standardization.  Unfortunately, the two tend to follow each other.

The fast food industry tends to be very good at distinguishing between variety and variation.  A typical burger at a common franchise can result in over 200 configurations, each individually made and customized for the customer at the point of order.  Each configuration made from extremely standardized components, in standardized systems that even accommodate local, regional, and cultural variations.  More so, the demand can fluctuate by orders of magnitude from day-to-day, even hour-to-hour!  Each experience is highly individualized for variety and highly standardized for consistency and cost.  One experiment I try on an occasional basis is to order a configuration not found in the “regular menu” from some of my local establishments and watch how the store adapts.  I am consistently surprised that even unlisted configurations are delivered in the same amount of time as the “standard” product.