Tag Archives: targets

Is Your Obsession with Schedule Killing Your Quality?

Time to LearnA couple weeks ago, I went to the W. Edwards Deming Institute pre-conference facilitated by David Langford of Langford Learning. During his workshop David talked about how teachers give a test over material on a date. The test date and schedule of learning is set in stone, but the quality of the learning is flexible – flexible meaning that the student’s knowledge of the material is of less importance than the date. The student learning is compromised by the date.

After some reflection, it occurred to meet that this is what happens in programs and projects in organizations. They set a date, put together a project plan and all focus is to hit the date. The quality is questionable when delivered, but the date is hit. This is completely backwards from the thinking that should prevail.

Our projects, plans and programs have come with more rigor around the dates. Project managers are used to carefully schedule and track progress on Gantt charts – this doesn’t solve the glaring systemic issues in management, design, culture and quality.  In fact, in many organizations if you try to suggest improvements during the course of a project you are informed that this would compromise the delivery date and probably some incentive for hitting the date. Good quality work be damned!

If education and other organizations want to deliver quality students, products or services, then the focus needs to be on the method and not the date. Otherwise, waste and mediocrity will continue to prevail in our systems.

Take a look at your organization as your customers see it – our 4-day workshop has been called “an awakening experience.” You will understand the customer view of your organization and take inventory of the assumptions, beliefs and perspectives that drive performance. Tripp Babbitt is a service design architect and organizational futurist. His company helps service organizations understand future trends, culture and customer. The 95 Method designs organizations to improve the comprehensive customer experience while improving culture and management effectiveness. Read his column at Quality Digest and his articles for PEX and CallCenterIQ. Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

Share This:
Facebooktwitterlinkedin

Management’s Predictable Response to Trouble

Management with a conventional perspective in their approach attack problems predictably .  .  . predictably wrong. If revenue is the problem, set a target for more revenue.  Expenses to high set a target for to lower costs.

The real question that eludes such approaches is ” by what method?”

Subordinates are left with new targets and no method.  This is not good management.  Can we even call this management?

Conventional methods for increased revenue call “pushing” sales to customers.  Some so dysfunctional in one telecomm that customers are pushed products for mobile phones that don’t even fit.  However, revenue gets recognized and the cost problem created (returns)  is for another month or another group that is responsible for costs.

Reducing expenses?  Cut back on travel, office supplies, maintenance, outsourcing and if things are bad – heads must roll.  All short-term thinking and lead to increased costs later.

They above examples are the scarcity mentality we live with today.  No real growth or understanding of where costs manifest themselves.  Innovative methods to address revenue and cost issues are lacking.  Yet, the more service organizations that I study I find literally hundreds of opportunities.  However, most organizations don’t know how or where to look.

Work design, flow and an understanding of customer demand are where the hidden gems lie.  Six Sigma and Lean have  tools to get to these gems, just they are usually the wrong tools for the job.  Knowing how and where to find the gems allows you to go find them and quite simply  . . . pick them up.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

Share This:
Facebooktwitterlinkedin

EA Sports – Worst Company in America?

What makes a company the worst in America?  The Consumerist website has determined EA Sports is this years winner of the Golden Poo award – for the second year in a row.  EA Sports soundly defeated perennial powerhouse Bank of America.

I like to read the Consumerist as you get some really good info on what problems organizations have in delivering product and/or service.  I see many of these problems with organization obsessed with revenue and costs – where they should be focused on the customer and let revenue and costs take care of themselves.  Unfortunately, too many executives only get targets for revenue and expenses that lead to bonuses.  This leads to a short-term focus and an internal view.  Consumers feel the pain.

There are few companies (and I haven’t found one) that deliver really good service and mostly for the reasons I have noted above.  All organizations in the US are struggling with an environment that has been shrinking.  The shrinking has to do with our collective approach to management and a scarcity mentality.  Budgets are part of this thinking.  Growth and innovation takes a back seat to budgets and shrinkage.  Businesses fight over market share rather than ways to grow.

This is a disease that began here in America.  EA Sports in the eyes of consumers that frequent the Consumerist have spoken.  However, so are your customers – are you listening?  Do you know how?

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter atwww.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.Enhanced by Zemanta
Share This:
Facebooktwitterlinkedin

Plan, Budget and Performance Measures

David Walker of the Comeback America Initiative that he founded is often on CNBC explaining what it will take to get America on track.  It is the same story . . . build a plan, budget the plan and institute performance measures.  To paraphrase Mr. Walker, the former US Comptroller, “this is what big, successful companies do.”

This thinking is what led us to the US decline in the first place.

Mass-production and industrialized thinking that didn’t succeed after WWII has led to retrenchment.  In this case a better word would be – retreat. Down-sizing our budget and workforce requires a plan.  Winners and losers baked in and the losers are Americans.

This does not mean that we should continue down the course of large deficits or that budgets don’t matter, it just means you are managing a retreat.  Large scale ideology leads to massive expenditures as more expense is derived from managing the downsizing.  This is not the way forward for the public or private sectors.

Finance has overwhelmed logic as the numbers are misleading.  Context is needed and so is the evidence.  However, big thinkers don’t have time for the detail and this leads to deficits.  Managing scale, flow is missed and naturally so are the causes of cost.

Political candidates are touting their road maps, plans and other non-sense without knowledge.  Voters starved for detail can get only sound bites, sappy commercials and personal attacks.  It is pathetic.

With budgets, the mantra is to cut costs.  Performance measures help keep the budget numbers on track.  In a system full of waste, just cutting costs misses addressing the waste.  A bad system with no money still leaves a bad system.  Performance measures derived from budgets and plans (without knowledge) almost always lock in the waste.

So, this political season be skeptical and demand more than just pplans, budgets and performance measures – how do we grow?

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the The 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Share This:
Facebooktwitterlinkedin

Increasing Sales is About Changing Thinking

Whether you live in the US or not, the thinking about how to increase sales seems universal.  Hiring sales type personalities that can overcome objections and hit targets.  This thinking has been repeated so often that organizations have come to believe it . . . if it were only true.

The service that most organizations achieve for their customers is horrendous and poor service leads organizations filled with revenue targets to “hit the number.”  Incentives and training to overcome objections is the recourse.  No one addresses the main thing that prevents sales, namely, bad service.

This bad service can be measured in organizations by understanding what percentage of customer demands are in the form of failure demand (the failure to do something or do something right for a customer).  The percentage in most organizations is between 25 and 75% of all customer demands.  It is difficult to sell to someone with this much failure.

High failure demand means we have to compensate for our bad service by selling.  After all, it takes a lot of extra sugar coating to sell to someone that gets horrible service.

Service can only be improved by changing the system and the system requires new thinking about the design and management of work.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the The 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Share This:
Facebooktwitterlinkedin

The Psychology of Selling

Being from the United States, one becomes use to the constant “push” for sales.  Car dealers are notorious for the dreaded “push” sale.  Lots of tricks to get you to buy a car.  They “hold” your keys for appraisal and don’t let you leave – I had that happen to me at a Tom Wood Volkswagen dealership in Indianapolis.  I not only left mad, but I told many other people about how ridiculous it was I had to be put through this as a customer.

Years ago, I had training from the Sandler Sales Institute that made a lot of sense.  I remember first understanding that customers don’t trust salespeople (because they lie) during the sales training.  The Sandler system was set up to not make you look like a salesperson.  The aim was to build trust.

Since, I have learned the 95 Method.  The Method helps eliminate failure demand (demand caused by a failure to do something or do something right for a customer).  Bad service in the form of failure demand helps undermine trust in the eyes of a customer.  Try selling to a customer that has an outstanding issue can only make them mad.  Overselling to a customer creates failure demand when they discover that they don’t need to overpay for a service that is too much for their needs or budget.  This is all “push.”  “Push” too often leads to failure demand.  Sales organizations with revenue shortfalls often rely on more “push” to hit revenue targets which in turn creates more waste in failure demand.

There are many reasons for failure demand in service organizations, standardization and “push” selling are only two.  The only way to learn what causes failure demand is to study your organization as a system.  The 95 Method does this (we offer a free download at www.newsystemsthinking.com or even on this blog).  No matter what the cause of failure demand, it is a barrier to greater sales.

The elimination of failure demand removes the barrier and gives customers the opportunity to “pull” for products and services.  All customers like to buy, very few like to be coerced through “push” methods.  Service organizations can build trust with their customers and that is the real winning psychology of selling.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Share This:
Facebooktwitterlinkedin

American Toast: The Revenue – Expense Debate

A classic quote from Dr. Deming was “let’s make toast the American way . . . you burn, I’ll scrape.”  This quote has so many references that you can see in manufacturing, but the same applies to management.  I see more burning and scraping in service organizations with management than I care to mention.

The most obvious is when we take the income statement and functionally separate it into revenue and expense by having sales be responsible for revenue and operations responsible for expense.  CEOs claim that we must grow the top-line and reduce the burden of expense – nothing wrong with that, except asking the question “by what method?”

Getting the sales dogs to hunt and the operations to cut is the formula most management embrace for organizations.  The problem is that revenue and costs are the two sides of the same coin.  The two are inextricably tied together.  The optimization of each as independents leads to sub-optimization and waste.    The burning of toast and scraping becomes a way of “doing business.”

We have functionally separated organizations and rely on specialists to optimize the functions.  This erases the real aim of business . . . profit!  The reward and incentive systems lock in the waste.  Too many times have I seen management make their functional targets and rewards while the organization goes down the tubes.

Profit comes from the combination of revenue and expenses together.  The next step is to manage that way.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Share This:
Facebooktwitterlinkedin

Revisiting MBO (Management by Objectives)

The Honorable Jennifer Granholm, Governor of t...

Image via Wikipedia

I am reading two books right now.  One by Governor Daniels of Indiana and another by former Governor Jennifer Granholm of Michigan.  Governor Granholm talks quite a bit about the loss of jobs in manufacturing in her State to outsourcing.  In fact, her last election against Dick DeVos – the former Amway CEO – she let him have it during her campaign for outsourcing jobs to China.  Certainly, the subject for a future blog post.

However, something else caught my eye . . . Governor Granholm’s love for MBO.

“As a big believer in management by objectives, I loved using  the State of the State speech as a blueprint for the year.”

– from A Governor’s Story – Governor Granholm

There is a correlation between the loss of jobs to outsourcing and MBO, but I won’t make it in this post.  They are both wrong behaviors and outsourcing you can find plenty of posts why it isn’t typically saving money.

Organizations and governments are still using MBO – shocking?  Not really.  I still see it in many organizations, once a bad idea . . . always a bad idea.

Peter Drucker invented this thinking in 1954, W. Edwards Deming rocked the world when he spoke about MBO as one of the evils of management (as practiced).  Closely related to MBO is SMART (Specific, Measurable, Agreed, Realistic and Time-related) and a Balanced Scorecard.  Targets come along with these thinking methods.

First of all, Dr. Deming understood that when you provide objectives and targets by function you get sub-optimization.  Meaning if you optimize each functional piece you miss the inter-dependencies and create a system works against itself.  This creates waste.  For example, you often see departments vying for resources focused on what they can get in resources for themselves. Artificial competition is produced and the loss to the system is great because we do what is right for the department, but not right for the system.

Information technology seems to get much of the money in organizations.  Yet IT cannot create value, it can only add value to the relationship between customer demands and work.  Unfortunately, too many organizations don’t get that IT, HR, Finance and other supporting areas aren’t meant to create a profit for their department – they are there to enable the value creating relationships.

With MBO, we get management and worker focused on the wrong things.  Hitting the target laid out in the objective (remember SMART).  The flow is interrupted by the functional separation of work as each piece tries to optimize itself.

“(MBO) nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics.”

– W. Edwards Deming (from Out of the Crisis)

“Management by Fear” was the Deming phrase that replaced MBO.

Governor Granholm is a Harvard graduate.  Peter Drucker taught there.  Harvard, with all its money has become the poster child for bad theory.  Smart people, wrong method.

As voters, we need to ask candidate, “By what method?”  As managers, we need better thinking about the design and management of work – devoid of MBO and targets.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Enhanced by Zemanta
Share This:
Facebooktwitterlinkedin

Innovation – It Starts with Challenging Old Assumptions

Probably better to say curiosity starts us down a different path and innovation follows, but assumptions block the path to curiosity.  Grabbing or copying the first best practice or tool to make improvements ends any chance at innovation.  We want to check a problem off the to-do list not have to think about what options we have to solve a problem.

I was reading Alfie Kohn’s website and remembered my Deming days.  He was the first person I had met that challenged my thinking on competition and reward systems.  He reinforced and furthered Dr. Deming’s argument that cooperation and not competition was that better way to go.

Deming and Kohn also made me rethink reward systems and how they drive the wrong behavior.  Rewards and targets become the defacto purpose of an organization – meaning that management and worker pursuits of targets and rewards take our eyes off creating value for customers.  Further, the system we work in and how well it is designed is by far the biggest influence on organizational performance.

The best way to ask people to begin is to set aside the old assumption that we have learned in childhood, experience, schools and what others have told us are true.  This is why going to the work is so important rather than relying on IT-generated reports or the biggest mouth in a meeting.  You can learn new truths when you do and banish myths at the same time.

This brings new and better thinking to problems.  This is called innovation.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Share This:
Facebooktwitterlinkedin

Targets and Quotas – Wrong for Police and Business

The New York Daily News has reported the cheating going on by NYPD narcotics detectives.  Police feared their being demoted or being paid attention to by superiors by not achieving quotas set by the department.  Targets, quotas or arbitrary numerical goals as W. Edwards Deming called them will always lead to bad behavior.

This is no different in business.

In a survey conducted in the article 96% of readers believe arrest quotas drive the wrong behavior. Yet quotas and targets are prevalent in many organizations both public and private.  Targets and quotas become the defacto purpose driving behavior in any system.

I am not attempting to excuse the detectives, but we shouldn’t excuse the system that made them cheat either.  Fix the system and you fix much of the behavior.  Fear and rewards better known as carrot and sticks has long become an outdated way to manage.

Building systems that work for customers and not focus attention on an individual’s performance is a good place to start.  You get clarity when you focus on the customer and their needs . . . and you get manipulation when you targets, quotas, incentives and rewards.  Managing with targets and quotas is lazy, building a better system to build value and profit is much harder work.

If 96% of us believe that quotas are the wrong thing for police, shouldn’t we be looking at the damage they are causing in business?

I think so.

The evidence is out there, but you have to look for it.  Making up evidence does no one any good.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

Share This:
Facebooktwitterlinkedin