A load of bull?

Chatting to farmers is not something I normally indulge in but today was an exception.

What the farmer told me, if true, shows a shocking waste of resources and an increase in costs which presumably we, the buying public pay.

The story goes something like this…   …cattle are reared in Yorkshire, specifically Aberdeen Angus cattle.  Once they have been fattened up on Yorkshire’s finest greenery, they are taken by lorry to Scotland.  When they arrive in Scotland they are Scottish (apparently).  The cattle are slaughtered and sold in England as Scottish beef.

How crazy is this?  Where’s the benefit?  Will it taste different because it’s been slaughtered in Scotland?    No.  Will it cost more?  Yes.  Will it make more profit?  Probably yes.  Is it good for the environment?

I’ll leave the systems thinkers and the lean specialists to pick the bones out of this one.         

They set targets for Personal Payment Insurance and look what happened.

The impact of mis-selling personal payments insurance rolls on, now with concerns about the activities of claims management companies. 

It started with financial services companies providing loans.  There’s nothing particularly wrong there, providing the lending is prudent and appropriate.  Let’s assume it is.

These companies wanted to increase their profit margins, as they were targeted for revenue.  Increasing the interest rate charged on the loans was difficult as this is transparent and consumers can easily compare rates between different lenders.  Adding PPI was easier.  Selling PPI where the customer was not eligible was easy too.

All this was driven by a pressure to hit targets for the financial services companies.  Targets which were not linked to their customers’ needs; just those of the finance companies.  Had the measures been put in place related to the customer the outcome would have been very different.  For example an objective to sell PPI to 80% of eligible customers may have been better.

The problem with targets is that they make people cheat.  Management pressure people to hit targets.  Sometimes factors external to the situation make it difficult or impossible to hit the target.  As more pressure is applied staff find ‘alternative ways’ of meeting them, in this case by selling PPI to people who were ineligible.

Now the Legal Ombudsman is having to intervene as claims management companies driven by targets unrelated to their customer’s purpose.  The failures of mis-selling have created an industry to sort out PPI and now that being scrutinised for its own failings.

We need to get to grips with understanding our customer’s purpose and then measuring our success against it.  This will help us build stronger and more ethical businesses.  Fulfilling true customer purpose is the key to success.

Getting a drink is simple – Well it is, isn’t it?

Recently I was invited to a breakfast briefing at a major hotel. I arrive the obligatory 15 or so minutes before the published start time to mingle with my fellow guests. Courteously I’m invited to help myself to a drink – tea or coffee.

All the necessary items – sugar, sweeteners, stirring sticks, mugs, followed by flasks – are laid out on a table on the edge of the small mingling area. It’s quite a busy event and the area is a little congested.

Now I’m into process, in fact I’m very enthusiastic about process, you know doing the right thing right.

I must be careful here. I don’t want to spill anything do I?

First things first, I need a mug. Yes mugs are great, you get more in them and you don’t need to balance them on a saucer. That’s good.

Now for some coffee. I don’t like tea, so it must be coffee. What? The flasks aren’t labelled? Which is which? Ah, the chap at the side of me tells me which is coffee. Umm, good job he was there otherwise….. So where’s the milk then? Umm, that’s not particularly obvious either, but with team work we achieve our objective.

So far I’ve been working from left to right along the table. But now I need some sugar, oh and a stirrer. Where are they? What? At the extreme left hand side? Surely not. Oh, yes. I can see them but by now there’s someone on my left who’s guessing which liquid he’s pouring into his mug. Sorry mate, I should have told you about that. Really sorry, honest. Excuse me, I’ve not told you which was tea, but even so would you mind letting me through to the sugar… …err please.

I reach for the sugar and the stirrer, disrupting the flow, trying not to cause me or my fellow guest to spill our drinks.

Success. Coffee in mug. Milk in mug. Sugar in mug.

Stirrer in…. ….where’s the bin?

Why do they do it? These hospitality professionals, supposedly at the upper end of the market but they can’t even organise a cup of tea in a…. …hotel!

It should be so simple. 60 guests wanting a drink. But it’s not.

It’s all in the process. Don’t blame the guests. They’re following the process laid out by the hotel.

I wonder how good their other processes are? Glad I’m not expecting something more complex. How good are the processes in your business? Do the right thing righter.

What’s going on?

OK, so you’re a manager, a head of, or a director.  You’ve got a team of people working for you providing a service for your customers – internal users, external business customers or a personal customer base.   You’ve grown your team and have some good people.  You’re proud to have developed them over a few years.  You’ve handpicked them for their strengths.  Yes, you’ve got a couple who might be a bit flaky but generally you feel you’ve got a dependable crew.

So what are they doing right now?  Yes one’s gone for a quick smoke but they’re industrious when they’re at their desk so it’s not an issue really.  The others seem to be getting on with it.  Yes, but what are they getting on with?

Do you really know?

Yes, you get the weekly stats reports and they tell you everything’s fine – above target.  The boss will be pleased, just like usual.  Occasionally there’s a dip and you get a bit of a grilling but once in a while that’s OK.  After all you are responsible for all those fluctuations in demand caused by err…    …yes, the weather, the sudden closure of a competitor.   Oh well, you’ll have to learn how to use your crystal ball a bit better.

But that’s not the real picture is it?

How much of their time, (your time actually) is spent on their primary task.  Let’s call their primary task ‘value demand’ .  Yes that’s the stuff that you’ve recruited them for.    Go on, check, spend some time with them, observe for yourself.

I strongly suspect the percentage is a lot less than you’d hoped for or imagined.  So what’s the other stuff they’re doing?  Dealing with items which should have been directed to another team?  Customers chasing progress on problems they told you about 2 weeks ago?    Umm, that’ll be failure demand then.

Just think how much better that weekly stats report would look if you could stop it.

Turning Your Projects into Successes

1. Is it a project? Will this piece of work have a defined beginning and end? Yes – then it’s a project; no – then it’s not!
2. Understand what you want to achieve and why.
Try to express this in three or four short sentences.
What benefits the project will create? List the financial and non-financial benefits.
3. Estimate the costs
List all the items which will be needed. Don’t forget hidden internal costs such as your time. Some costs may occur annually, so categorise costs as once only or recurring.
Compare the estimated costs to the benefits. Calculate how long it will take for the benefits to repay the cost. Is the project really worthwhile? Are there alternative solutions which may be more cost-effective? Consider whether for every £1000 invested in this project the cash could be used more effectively elsewhere – the chances are you’ve got a shopping list of different projects you’d like to run but can only afford a limited number of them.
4. Create a timeline.
Think about what you and others will need to do to achieve success. What will be the sequence of tasks? How long will each take and what effort will be needed? Some tasks may need others to be completed in sequence; others can be completed at any time.
5. What can go wrong? What would be the consequences? All projects have risks. They need recording. Find someone to take responsibility for each one. If something goes wrong what will be done to rectify it? And who will do it? Identifying possibilities and solutions now can save a lot of heart ache later.
6. Does this project interlink with any other projects or activities in your business?
7. Who will be impacted by the project? These are your stakeholders. They may be internal or external to your business – customers, suppliers, staff etc. You need to consider their needs and expectations. Creating a good relationship with each stakeholder enhances likelihood of success. Ignoring a stakeholder’s opinion during the project may have disastrous consequences later. Their thoughts may differ from yours but their perspectives can be a key driver making the difference between success and failure.
8. Once you’ve identified your stakeholders take them on the project journey with you. No one likes surprises, so keep them up to date with your thoughts, progress and plans. Remember communicate, communicate, communicate.

Simple process change for big benefit

We’ve just wasted about 15 minutes trying to book an appointment by phone at the local branch of Santander.  OK it’s frustrating for us, the customer.  And yes, we could easily take our business elsewhere.  But that means more hassle.  And yes, perhaps we should learn to be more patient.

Err hang on a minute!

Customers who book appointments with their branches are usually doing it because they want to arrange something complex and higher value.  Surely telephoning to make an appointment should be a 3 minute job.

Ring, ring

“Hello, how can I help you?”

“I’d like to arrange to see a financial adviser please”

“OK.  When would you like to come in”

“Tuesday at 10:30?”

“I’ll just check the diary.  OK, that’s fine”

“Thank you”

“Good bye”

“Good bye”

It’s reasonable to assume that appointments are made for the more profitable business –  mortgages, loans, insurance.  If customers have to jump through hoops and endure pain to book an appointment they’re likely to take the line of least resistance – either take their business elsewhere or abandon their plans.  Putting a process in place to book appointments simply and quickly doesn’t require a huge amount of resources but the benefits would be huge.

Improving processes and customer service isn’t difficult or expensive and doesn’t necessarily need vast amounts invested in IT–   it just needs the desire to succeed and the returns are massive.

When we reduce budgets and cut costs are we doing it rationally?

I sense that many cuts are being made arbitrarily rather than in a well thought-out and planned manner. Most businesses and public sector areas carry some level of inefficiency. But to cut just for the sake of cutting is folly. No one likes reduced services. Cutting a fixed percentage of all budgets means services have to be reduced even if it’s not appropriate. Yet this is what we expect.
To use a cliché we should see our current economic situation as an opportunity. If we redesign our business operations by looking at the processes now we can reduce our cost base whilst maintaining or even improving our level of service. The added benefit is that when economic growth increases and demand for services rises the savings generated will multiply.

What takes up time in your business?

Creating a picture of your business showing the work to be done, whether ad hoc or routine will help to shape and control it.  One of the keys to managing any business area is to understand which tasks take up the most time, how much they cost and what value they add to the business.

Benefit can be achieved by understanding how the processes relate to each other.  Some may be unnecessary;  others may cause delays or lead to errors occurring.

In what proportion to each other in terms of time, cost and benefit added are management, customer facing activities and production.  How much of the time expended within your business is non-productive?

Some businesses map each of their process to improve quality, and to reduce errors and costs.  Where the processes are effective staff are usually more content than where the feel they are ineffective and wasteful.  This leads to a greater job satisfaction, reduced stress, less sickness and greater productivity.

Do your customers send you gifts?

From time to time, all businesses receive complaints from their customers.  Sometimes the complaints are justified; others are merely customers letting off steam.  But try to see a complaint as a gift.  In other words a complaint should encourage us to look at its causes and seek to make improvements to our business.

The consequences of complaints are three fold:  firstly, the complainant is likely to tell 10 people of their alleged problem; secondly, they may take their business elsewhere, and thirdly, there is the need to respond to the customer and correct the error.  The beauty of a complaint is that it may identify a weakness in your business and that rather than spending time trying to identify these areas the customer does it for you.  The trick is to see the possibilities of using the complaint to drive improvement through the business.

Managing our time

I’m fascinated about how we decide what we do and when.  With the rise of smart phones which can synchronise with our PCs has our control over our working lives improved?  Has this apparent increased level of control added anything positive?

Do we prefer to plan our lives with a pen and paper?  Does using a PC stifle our creativity?  Do we resist fearing we are being controlled by a machine?

It would be great to know your experiences.   Please have a look at this survey  http://www.surveymonkey.com/s/SC8T9PV