Content By Tripp Babbitt

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By: Tripp Babbitt

He is nameless in the movie Polar Express and the closing credits only give him the name, “Hero Boy.” The adventures depicted in the movie follow the plight of a young boy who doesn’t believe in Santa Claus. Hero Boy cannot hear the bells of Santa’s sleigh because he doesn’t believe.

For years now, I have railed against poor service and its causes in columns, articles, and of course, my blog. Managers are usually in the cross-hairs because they control the design and management of work. The systems workers toil to make a living in a setup developed by managers, and the result is often a disappointment to customers.

Managers are immersed in managing activity. The industrialized mindset taught by Frederick Winslow Taylor during the industrial revolution still rules management thinking. Can anyone say “stagnant thinking?” For more than a century, managers have been preoccupied by three questions:
1. How much work do I have?
2. How long does it take to do it?
3. How many people do I need?

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By: Tripp Babbitt

Information technology is failing us. Service organizations the world over have been left to sift through the carnage of IT projects that have failed. Undeterred, they seem to quickly embrace the next IT project before the last is given a proper burial.

The research and evidence on failed IT projects is undeniable. A study by the Saïid Business School on 1,500 IT projects worth $245 billion found that the larger the project, the larger the cost overrun—IT projects that turn into money pits are called “black swan” projects. The book, Dangerous Enthusiasms, by Robin Gauld and Shaun Goldfinch (Otago University Press, 2006), notes that 20 to 30 percent of IT projects are abandoned completely, and 30 to 60 percent of them don’t work properly or have cost overruns.

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By: Tripp Babbitt

Improvement in any organization is difficult enough, but if you don’t know about these counterintuitive truths, you stand to make things worse.

I had long searched for a way to be able to improve service organizations the same way that W. Edwards Deming did for manufacturing. No approach was giving the breakthrough performance that Deming had achieved in Japan. There were some successes, but nothing was breakthrough.

Sitting on an airplane to Budapest a few years ago, I read Freedom from Command and Control, by John Seddon (Productivity Press, 2005). I wasn’t very hopeful as I took my seat on the plane. A book written by an occupational psychologist formed visions of “balloon-kicking” and group hugs to improve culture and therefore performance. What I found instead was the Vanguard Method, a technique that would change my view on performance improvement.

My belief is that the work of Deming has been advanced. Some of the following counterintuitive truths you will recognize from his work; others are taking ideas learned through application and learning.

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By: Tripp Babbitt

Charlie Bucket and his adventures in a chocolate factory may be fantasy, but anyone watching realizes that the Oompa-Loompas provide most of the innovation and work at the factory. Yet in today’s service companies, the emphasis is less on the Oompa-Loompas and more on the Willy Wonkas.

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Manufacturing has it easy. Identifying waste could be measured in the amount of rework done and scrap accumulated. We used to call this the “hidden factory.” There are two factories at work—one that produces good products, and the “hidden factory” that produces the waste.

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By: Tripp Babbitt

If a service company has been around long enough, there will be some story about how someone manipulated the system and embezzled money or committed some type of fraud. The story is often anecdotal, and the longer it has been since the actual criminal event, the bigger the tale becomes. A thousand dollars becomes a hundred thousand dollars, and as time passes, a million dollars. Pinocchio would have a hard time with some of these stories of manipulation.

However, an embellished story (or not) misses the point. What’s important is how service organizations react to such events to prevent them. Executives who have been burned commit themselves to a knee-jerk reaction. Fraud, whether it happened to them directly or to another service company they read or heard about, becomes something to prevent. Audits and inspections are implemented with the executive’s hope that “this will never happen under my watch.”

In search of a solution, a predictable outcome from an audit is that too much control is put in the hands of one individual. This control can be over computer systems, processes, people, money, or any combination of these things.

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By: Tripp Babbitt

Caveat emptor or “let the buyer beware” is a long-used phrase familiar to consumers. Your ability to get good service is proportional to your knowledge. Certain industries have poor reputations that make customers wary, but they remain reliant on the vendor to be honest with them. The predictable result is anything from rip-offs to dissatisfaction.

The Internet has begun to change all this, and the advent of social media appears to be speeding the process up. Consumers may not rely on all favorable and unfavorable reviews but will use their social networks to find out the reputation, cost, and other relevant criteria to assess service before buying.

Regularly, I speak to consumers about how they decided to use a particular service provider, and the answer is still referral. However, in today’s networked society, they don’t just rely on their next-door neighbor; they are communicating with people and reading about the reputation of the company on the Internet. These days there are just fewer places to hide poor service quality.

W. Edwards Deming talked about those costs that can’t be seen, the ones he described as “unknown and unknowable.” Things like the cost of poor service, demoralized employees, and the like.

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By: Tripp Babbitt

My first job was in industrial distribution, and with distribution came learning to count inventory. An annual inventory tax was levied, so an accurate count was important. I was given a computer list of items to count. An important lesson I learned was that to get an accurate count, there was a right and wrong method.

Given the computer-printed inventory sheet with item description, bin location, and the inventory count shown in the system, I found myself verifying the sheet rather than counting what was actually on the shelf. This led to a huge disparity in the inventory count.

The reason for the wrong count was that as I read the sheet, I would look for the item on the shelf. If the sheet matched what was on the shelf (e.g., description, quantity), the count was reported as accurate or else adjusted to the appropriate number.

However, items had been misplaced when shipments were received or accidentally moved for a variety of reasons. Items reported missing during the inventory count when counting sheet-to-shelf were actually there in many cases, just not where they were supposed to be.

So the problem for my inventory was counting sheet-to-shelf rather than shelf-to-sheet.

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By: Tripp Babbitt

The real battle for quality doesn’t lie in processes; it lies in thinking. The recent rift in the state of Wisconsin and other places caused in part by increasing government costs leads one to ask: “Who is responsible? Is it management or labor?”

Gov. Scott Walker’s actions in Wisconsin highlight the need for new thinking about the design and management of work. However, the management-labor strife doesn’t end in Wisconsin. It’s present in all businesses and has created an environment in the United States where we struggle to compete. When we need management and labor to work together in a global marketplace with emerging economies like China, there is no time for such silliness.

Although labor unions have often been fingered as the problem, we would not have needed labor unions in the first place had management treated workers better. Sure, unions have been corrupt in their history, but you can’t argue against the fact that management has been just as corrupt. Does anyone remember the recent banking crisis? It wasn’t a teller or a back-office worker who started that mess; it was management besieged with targets and incentives to grow the business.

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By: Tripp Babbitt

The hordes of companies and governments moving to shared services are dizzying. So many have combined back offices, human resources (HR), information technology (IT), finance, and contact centers that most companies assume this is a good thing.

But where is the evidence?

The theory behind most shared services claims that if an organization combines two similar functions, it can achieve economies of scale. It is why many organizations maintain that simplification, standardization, and centralization are all the right things to do. Certainly budget and financial folks salivate at the prospect of combining “like functions.” But this is yesteryear thinking based on mass production and industrialized service design.

Service organizations see the visible cost savings that can be achieved through shared services. What they don’t see are the hidden costs of poor design, and the poor flow that results. The problem is that costs are not in scale, but in flow.

This is the truth given to us by Taiichi Ohno, mastermind of the Toyota Production System. Economies of flow are superior to economies of scale. Whereas scale focuses on reducing transaction costs, an  economy of flow focuses on end-to-end value as defined by the customer.

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By: Tripp Babbitt

Missed opportunities for improvement represent a 20–60 percent chunk carved out of the bottom line. Scores of programs and projects that claim improvement but never materialize in the financials are a travesty. The Wall Street Journal reports that more than 60 percent of improvement efforts fail. But the biggest failure occurs in the minds of executives.

The traditional approach is to get executive sponsors for improvement efforts. They say a few words and “throw their support” behind the effort. Then they return to their offices while the team toils to find some process to improve. The result is usually negligible or nonexistent improvement that is unsustainable—particularly because executives are quick to overturn improvement efforts with wrong thinking.

Because improvement efforts are pushed down to the front line and specific processes, the largest area for improvement—changing management thinking—goes unnoticed. Many areas that require executive self-reflection are completely ignored. They include: