The right information - right first time

Whether it be electricity billing, payroll services, or fixing potholes, ensuring the work starts correctly with the right information is often the first issue I discover as I undertake my diagnosis.

• Why aren’t all the electricity bills going out? Because not all the information about the customer has come from sales, and/or not all the meter technical details have been transferred across, and/or other data that was due in still hasn’t arrived….
• Why is the person that has left still being paid?  Because the process for a manager to contact a remote HR/payroll team is too complicated, something else causes a distraction, and the deadline gets missed…
• Why are gangs of workers not able to fix the problem on site?  Because they’ve been given inaccurate, incorrect, or out of date information to undertake the work. They arrive on site and then can’t complete the work…

It’s easy to dismiss these things as simple issues that happen sometimes.  But in all of these examples, they were happening every day, day-after-day, and often for years.  

All of them hit the bottom line directly.

• I’ve seen double digit percentages of unbilled utility accounts, all hitting profit, undoubtedly worth £m’s…  We analysed the system of work, and the majority were resolved over a few months.
• I’ve seen teams of people dealing with over and under payroll payments - all of them unnecessary if they had the information right-first-time - certainly worth many £000’s per year…  Designed out in hours, and fully implemented in weeks.
• I’ve seen organisations where at least one of their twenty gangs (man/men in a van) have been stuck in the depot each day.  They don’t earn if they’re in the depot.  Approximately £1000 a day.  £1/4m per year…?  Re-engineered over a few weeks with all the team on board, and the problem resolved.

It has the potential to happen anywhere, sitting there undiagnosed and often unseen, and yet can be the key to customer service, and improved margin.

Want to know more:

 - about Matt Arnold

 - give me a call on 07775 595 595

 - email on matt595@me.com

Doing a good job? Or not? Or not sure…?

It’s easy to walk into a large contact centre or processing office and see lots of people, head-sets on or working from screens - all looking busy - but are they really being effective…?

But take a closer look, and it doesn’t always look so rosy. Without purpose, you can very quickly find yourself, and your organisation, getting very busy, but unknowingly going around in circles.

Let me give you an example I came across a few years ago, a large government body who was managing ‘grants’ (for want of a better word) to certain vulnerable adults to help them live an independent life.

Prior to meeting their CEO, I took a look through their glossy report and accounts for the year.  In large, bold writing across a number of pages they showed how hard they were working by quoting the volumes of work they were processing: 

• Staff c.280
• Applications of c.9000 (per year)
• Post at over 150,000 items (per year)

Sounds good doesn’t it - nothing to see here.

And trust me, everyone was working hard, was well-intentioned, and committed to doing a good job.

But when you understand purpose, customer, value demand and waste work, you begin to understand where to look and which questions to ask.

So, some simple maths from the example above:

• This is equivalent to giving 1 application, to a cross-sectional team of 8 people, and allowing them a whole day between them to complete the application.  ie, 8 man-days to complete one application.
• And each application appears to involve, on average, 17 pieces of post.

This doesn’t sound very efficient.

And it’s like this everywhere I go:

• I worked in a large service centre where 100 or so agents are working on billing customers.  Each month, a few customers weren’t billed, and those customers weren’t billed the next month either, and so on.  This got to the point where 10% of the customers where unbilled at the end of each month.  Working with the team, we uncovered the complexity of the unbilled accounts, worked them a different way (by working to conclusion, account-by-account), and resolving root cause issues for the whole customer base.  In-month unbilled reduced to 2% within just a few months.

• My first assignment at a Housing Benefits department was taking 59 days end-to-end to complete each claim.  I was able to reduce this to 19 days by doing things right-first-time and removing the waste work.  The last time I was in Housing Benefits, we managed to reduce the work such that half of all claims were undertaken in less that one hour.

The advantages of doing it right in both these examples is enormous.

• Massive improvements in customer satisfaction.  
• A significant cost reduction as work is processed once, and not multiple times. 
• Massive improvements in staff satisfaction.

As I said above - these services are full of great people, doing some great things.  What’s difficult to see in the day-to-day busyness of the office, is that much of the work is just contributing to going round in circles.

This isn’t just changing the processes. It’s changing the whole system, including the management system and the way people think about their work.

Most of these examples were solved by:

• senior management looking at the root cause
• allowing staff to spend as much time as needed to resolve the issues, rather than the usual ‘2.5mins’ allowed in calling handling
• working on ensuring information is gathered right-first-time.

It’s the management team that need to understand there’s a better way of doing things.

I’ve recently been getting involved with some organisations that help vulnerable adults and homelessness - great people, doing some great things, helping those most in need.  The system of work is surprisingly similar to office type work, and I’m worried the same thing is happening there.

These are examples of waste-work that is locked-in the system - hiding in plain sight.  I have no doubt that it is the same in other industries:

• health care - we know there is great work going on in hospitals and surgeries, and yet there is the frustration of multiple visits, poor communication between departments, the feeling of being forgotten, the next appointment in 2 months etc…
• adult social care - where a vulnerable adult is passed from one siloed department to another, each team getting a ‘tick’ for completing their thing, but leaving the customer feeling like they’re going round in circles…
• homelessness - where having poked around this system in recent months, I fear there are many many people, all working hard, but probably in a way that is sustaining the problem, not resolving it…

For a better understanding of where the benefits lay, click on the links below:

• root cause analysis
• waste work
• cost reduction

Want to know more:

 - about Matt Arnold

 - give me a call on 07775 595 595

 - email on matt595@me.com

Changing the system to get very different results.

I’ve posted before about how small changes in the system can deliver dramatic results.  I especially like the ones where the answer isn’t where you’d expect it to be. 

One has to really study the system first:

• what is the purpose of the operation?
• what is the customer journey?
• what other factors are playing out?
• what demands are being placed on the work?

I came across a fascinating one today - one that has already significantly reduced loss of life…

A previous examples - in fact my very first blog - and I frequently re-tell the story of the bins in the fast-food store:

https://595or.blogspot.com/2011/08/design-problem-out.html

If you make the bin holes smaller, the tray can’t be thrown away.

Another previous example - The Lincoln Memorial issue was similar:

https://595or.blogspot.com/2015/03/systems-thinking-and-why-lean-tools.html

A small change in the system, at literally zero cost, drastically altered the outcomes.

The one I heard about today involves a story that we’ve all seen in the news over recent times - mostly in the US, frequently involving race connotations, and it’s pretty much what started The Black Lives Matter movement.

A study of the way US police officers pursue and intercept targets has shown that its the heat of the pursuit that affects decision making, potentially leading to death of the suspect.

From the BBC Inquiry podcast “Can you train people to be less prejudiced” - a change in the system of pursuit that lead to dramatic reduction in fatalities.  By taking the heat out of the situation, adding more time into the equation, and helping the officer re-assess and balance any bias they may have, has dramatically changed outcomes.

The whole podcast is worth a listen, but the key message is described from 17:01, and takes less than 2 minutes:

https://itunes.apple.com/gb/podcast/can-you-train-people-to-be-less-prejudiced/id932499233?i=1000414269329&mt=2

By changing the current ‘hot’ “foot pursuit” policy to one where they hold back, call for help, and surround the situation, the officer-involved shootings have gone down - dramatically.

And of course, there are business opportunities here too:

• Taking the heat out of rapid decision making
• Taking a step back and seeing the whole picture
• Identifying potential bias situations

could lead to improved decision making and outcomes.

Some businesses are 14 times better than others

As many of you may know, I’ve worked in quite a few Local Authority Housing Benefit departments - these teams provide benefits to vulnerable adults to assist with rent and council tax payments if they are on low incomes.  Not only is there usually ample scope for improvement, it also means those that need the money get it sooner.

I continue to do research on the national figures, and they’re interesting reading - the difference in performance is far larger than you might expect:

 - some councils undertake their claims in an average of 4 days,

 - other take as long as 57 days, and

 - over 200 councils take longer than 20 days.

So, some councils are 14 times better than others.

In the past, I helped one council enable them to pay half of their claims in less than one hour - it can be done - it’s better customer service, and considerably cheaper.

Why is this important?

1. It’s much better customer service, the customer makes less contact, and they get their issues resolved more quickly
2. It’s cheaper for the business because everything gets completed sooner, and
3. The staff love it because they get a chance to resolve customer issues properly.

Example: If you had financial difficulties, how often would you chase your payments? - once a week?  In the examples above, one council would be receive no chasing telephone calls, whilst another might be receiving as many as eight chasing calls, ie one business needs a large call centre, the other doesn’t.

Example: again, in the examples above, one council would be drowning in a sea of claims paper work that I estimate at over 1000 claim files, the other would have approximately 20 files as work-in-progress.  So, one council would need a large and expensive document imaging system, the other, possibly a shelf?

But this doesn’t just happen in the public sector - they’re the ones that are brave enough (or instructed to) provide consistent figures so that consultants like me to can undertake some comparative analysis.

It happens in businesses too - I see it regularly.  Whether its on-line gambling, electricity or engineering (all recent assignments) I see situations where:

 - purpose has been forgotten

 - the same predictable issues occur time again

 - there is little attention to understanding root cause

 - the work flow has not been understood from the customers’ perspective, and

 - there’s failure to truly design the process based on what is actually required.

Examples I’ve seen lately:

 - sending engineers to site with incorrect or out-of-date drawings meaning that they can’t complete the work

 - not sending out bills because of blockages upstream in the process, causing problems in customer services and credit control

 - not being able to see the underlying “production line” of work flow, resulting in ineffective controls of highly regulated areas of the business.

This isn’t just about some changes to the tactical plans of the business, it’s fundamental to the strategy of the leadership agenda.  It’s not just a process thing - it’s at the very heart of what a business is there to do.  In all of my recent assignments, the benefits to the customer journey, the staff, and the bottom line have been significant.

Where is the start of the queue?

My last two posts have been about queues - I promise, this will be last one about queues for a while….!

This one goes back a few years, but I see it time and again, in offices, contact centres, post offices, coffee shops…

I was helping a council with their Housing Benefits claims, and spending a lot of time in their contact centre.  A pattern was appearing, there was always a queue after lunch - at it’s worst at about 3pm.

The team had lots of ideas about why that was happening:

• the bus arrives then
• customers always come in at that time
• it’s the weather

If you were in that queue, you might be thinking…

• why am I in a queue?
• they’re always busy after lunch
• they don’t care about me.

So what’s happening?

For a start, the queue didn’t ‘arrive’ at 3pm.  The queue began the moment that demand was greater than the supply of staff to help.  For example, if there were 5 positions open, and 6 people walk through the door as it opens at 9am, then the queue started then.  If the same happens again at 10am (and for ease of maths, assume it takes an hour to deal with each person), then there will be 2 people waiting in a queue.  And so on…

Until lunch, when some staff have their lunch break (seems only fair) and the queue grows further more quickly.  You see what’s happening…

And it’s my belief that … drum roll … queues are entirely ‘man-made’ and can be eliminated if they are approached with a different mind-set.

So, back to the original scenario, although there were 5 people serving at 9am, there were more behind the scenes doing ‘other’ work.  (More about the ‘other’ work later…)  What if we pulled a member of the team into the front desk as soon as we needed to meet demand from the 6th customer.  Queue gone - at 9am.  And when it happens at 10am - the same again.

It’s simple, match the supply of staff to the demand of the customer.

Remember, all the customers get seen in the end anyway - now without a queue - better customer service.

So, what about the ‘other’ work?  Well, when the queue was long, some customers turn on their heals and disappear.  They may phone in, or write in at a later date.  This is the ‘other’ work that has to be dealt with later, but is now more difficult, because it’s harder, or impossible, to interact when not face-to-face.  So this way eliminates waste work.

I’ve helped my clients many times with problems of this type.  And it’s great to see those that have benefitted most still in the top 10 on national league tables.

Where are your queues? - because they’re not always people in reception.  A backlog of emails?  Uncompleted work?  A unusually large level of debt on the aged debt list?

You know where I am if you’d like to know more.

Housing Benefits - Long-term data and improvements in performance.

I’ve helped quite a number of Housing Benefit departments in the last 15 years, including helping Darlington move from 60th in the national league table to the top 10 - where they remain (based on customer end-to-end time).  I also helped Milton Keynes reduce their end-to-end time from 60 days to 20.  Likewise Middlesborough.  And quite a number of others.  And all during a time of cuts.

I’ve been undertaking some Housing Benefit research lately, analysing some of the government data that councils have to lodge - and it’s not been easy!

I trained as a Chartered Accountant, and was soon brought in to the fold of month-ends and year-ends.  Fine, the accountant needs to draw a line in the sand, but back in operations, it’s just another day.  Long term performance in operations requires an understanding of how operations have performed repeatedly over long periods of time.

The Benefits performance data that the government logs are quarterly, and split into geographic region, making it difficult to see performance over time, and difficult to compare similarly sized departments.

I’ve now pulled together all of the long term data into a database to make it easy to compare performance.  This covers:

• 6 years of quarterly data, and
• 379 councils.  

It makes for some interesting analysis - those that do well, and others that seem to struggle - and it enables the real questions to be asked:

• how are some performing well? - what’s special about what they’re doing?
• others are struggling, why is that? - what could they be doing differently?
• why isn’t everyone sharing what they’ve learned to offer great service?

And it’s not because of budget cuts - good performance in systems of the this type is cheaper, because it eliminates the waste work:

http://595or.blogspot.co.uk/2014/06/keeping-things-simple.html

http://595or.blogspot.co.uk/2014/06/cost-exist-to-be-reduced.html

http://595or.blogspot.co.uk/2011/10/does-it-really-take-6-weeks-to-get-my.html

I also have considerable experience of similar improvements in Finance, HR, Payroll, Council Tax, Planning, Housing Repairs, Streetscene and others.  And in the private sector, including IT help desks, billing performance, claims and banking.

Want to know more, drop me a line: matt595@me.com

Matt

Is encouraging Local Authorities to share and/or merge the right thing to do?

For years (centuries?) there have been boundary issues, discussions and disputes between parishes, districts, boroughs and counties.  Where are the lines to be drawn, and who takes responsibility?

Each political area then has its own structure of management – and in most cases consists of:

• unpaid political leaders and members to give the strategic direction as voted for by the population, and
• a paid CEO, directors and managers to lead the staff.  

With over 350 councils in the UK, that’s a lot of management.  At quite a cost.  Central Government continues to struggle to control budgetary pressures, and continues to restrict the funding to local councils.  So how do you do more for less?

In the past, central government has taken control of some of these boundary issues – with varying degrees of success.  Why not merge councils together by changing boundaries?  It’s unlikely they will want to do that directly now - it’s politically sensitive, to say then least! - and a battle they don’t need to fight.  Will councils do it themselves - and vote themselves out of a job…?

Many turn to shared services.  If two or more councils can share a finance department, or IT department, then it only requires one set of managers.  A simple economy of scale - and there are some advantages to this.

The Government are now encouraging closer working by given additional funding to Councils who merge themselves: £15m is being made available for 2014/15 for district councils working together and/or with a county to share Chief Executive’s and SMTs. It’s the sort of thing that Mid Suffolk and Babergh District councils are working on right now.

But what I see so many times, is the failure to recognise that the existing service is almost always highly inefficient with waste work and failure demand in abundance.  So it should always be economies of flow first.

• Understand the customer demand
• Design against purpose
• Reduce/eliminate waste.

This removes all the unnecessary steps leading to improved customer service and reduced cost.  Ask yourself the question: “Do I really understand what the customer experiences when they contact my service?”

Then, there may be possibilities for merging to improve economies of scale.  Do we really need over 350 Council Tax departments across the country, all managing their own, very similar, systems and support hierarchies?

Keeping things simple?

Do you ever think that some of the management books and technical jargon are far more complicated than they really need to be?  A recent podcast by the Freakonomics team reminded me of some simple service “production line” stuff that seems to get forgotten.

Over the years, I have worked in many claims processing systems, and we undertook the usual “work-flow” analysis of all the steps – the usual post-it notes on the wall etc – we’ve all done it.  

There were 300 steps.

When you look at which ones actually add value, there were only three (I’ve worked with many teams - it always boils down to three steps): 

1. meet
2. assess
3. pay

All the other steps were there to patch-up all the other steps that weren’t working properly.

The team realised that they were actually spending time doing part of the work, finding themselves in the position of not being able to complete it, asking for more information, whilst the customer would phone into a separate help-desk in need of assistance.  This would be repeated on a number of occasions over a lengthy period of time.  Stylistically, spending 4 lots of 15 minutes over the period of about a month:

The team I was working with experimented with a “Right-first-time” approach.  The experts in the process (rather than the administrators) spent a little longer with each customer, working out the best and quickest way to complete each transaction. Where the work could not be completed, they examined why this was, and looked for different ways to improve this too.

Within a few weeks, half of all claims were being completed within 1 hour.  And the average time for all claims reduced from 13 days end-to-end 6.5 days.  It looked more like this:

Why does this matter?

1. It’s great customer service.
2. It costs less too.

For half of the customers, we had taken away the need for them to call in chasing their claims – a saving of over £100,000.

A systemic solution, that saved money, and improved customer service – perfect!

Want to know more:
 - about Matt Arnold

 - give me a call on 07775 595 595

 - email on matt595@me.com

One of many of Deming's fantastic quotes:

If you can't describe what you're doing as a process, 

you don't know what you're doing.

A fantastic quote from the man who helped design practical work flow based on customer demand.

He certainly helped Toyota in both:
 - designing cars based on what the customer actually wanted; and a
 - production process that was as efficient as possible.

In a manufacturing environment, this might be distinguished by two clear sets of managers and engineers focussed on:
 - designing the latest car, including engine efficiency, improved comfort, latest colours etc ; and
 - designing the production line, including how the workers assemble the car, where the tools are placed, and how quickly a car can be put together.

So what does that mean in the office environment?  Whether you are processing invoices, clearing insurance claims, or processing benefit claims, who in your office is the expert in:
 - the subject matter; and
 - the production process?

Most don't appreciated the difference, until asked.

Why does this matter? Simple - cost!

Getting the process wrong increases costs through unnecessary re-work and error.  Ensuring work flows in and through the office cleanly, and 'right-first-time', both improves quality from the customer's perspective, improves staff moral, and reduces costs.

It has been shown that efficiency can improve by between 10% and 30%.  Who wouldn't want that on the bottom line?

The Big Society

595or is delighted to be sponsoring VODA Summer of a Lifetime in North Tyneside.  

Summer of a Lifetime is an exciting pilot project delivered by VODA in partnership with the Dame Kelly Holmes Legacy Trust and our national network of voluntary sector, Local Authority and Further Education Colleges, as part Government’s National Citizen Service programme aimed at 16 year olds (or older young people in exceptional circumstances).

It is a prestigious, fun, challenging and adventurous project, which gives young people the opportunity to improve skills such as team work, problem solving, leadership and communication. It also helps improve young people's employment prospects by gaining new experiences, networking with others and enriching CVs.

Summer of a Lifetime is a 6-8 week programme for 16 year olds. The first three weeks are full time (with two weeks away from home), then 30 hours part time. It includes exciting teamwork and outdoor physical challenges away from home and will also involve planning, designing and delivering social action projects within your local community.

Summer of a Lifetime

VODA

The costs are in the gaps

Arguing for an end to back offices and target driven approaches, John Seddon outlines theories that could permanently alter management approaches.

When I was a young man the term ‘back office’ did not exist. Today it is in common parlance; it is considered axiomatic that back offices are a feature of efficiency; Whitehall extols their virtue; they are springing up all around us. Where did the idea come from? What problem was it designed to solve? Does it solve that problem? Answers to these questions will cause concern to those who have jumped on the back office bandwagon.

It began in 1978. Richard Chase, writing in the Harvard Business Review, lamented the failure of service organisations to be as technocratic as manufacturers. His view – and a view still widely shared amongst managers of services – was that the job of management is to optimise the use of resources – get people working all day – and in services that can be difficult because the customer comes in and ‘interrupts’ the workers.

Chase proposed that we design services to have front offices, where customers are seen or spoken to over the phone, which then send the customers’ requirements to back offices where now, because the activity has been ‘de-coupled’ from the customer, efficiency can be pursued, resource can be optimised, labour can be sweated.

Housing benefits was the first back-office design mandated in local authorities. About eight years ago the Department for Work and Pensions (DWP) sent local authorities a three-box set of manuals which promulgated a front-office/back-office design with associated activity targets. The design created backlogs in back offices all over the country and the DWP ‘help team’ recommended that local authorities buy back-log busting services from the private sector. I labelled them the ‘no help’ team, for that didn’t help; it was the wrong answer, adding cost to cost.

As Mark Radford – a housing benefits leader in Swale Borough Council – observed at the time, the problem was not in the back office, it began in the front office. By worrying about seeing people quickly, individual claims became fragmented.

Studying the service also revealed that back-office people took a different view of the claimant than the front-office people; a checklist took over from face-to-face understanding.

Radford was one of the first public-sector managers to learn the error of working to reduce transaction costs, for the true cost of any service is end-to-end: the total number of transactions it takes for someone to receive a service could be as many as ten transactions. In short, he discovered that complying with DWP guidance only served to create failure demand: demand caused by a failure to do something or do something right for the customer.

To compound the error, the Audit Commission then bullied housing benefits managers to share their back offices. A problem shared is, in this case, a problem exacerbated.

To further compound the error, we see back offices being outsourced to the private sector, locking in high costs for the long term. Birmingham City Council has, thankfully, woken up to the truth that they are paying their outsource provider, Capita, millions every year for Capita to service failure demand. That’s the good news. The bad news is they don’t know the causes.

And these are they: the separation of front and back-offices, the standardisation and specialisation of work, the management of activity and, in general, the obsession with sweating the labour. Add to this the fact that back-office services outsourced to the private sector are contracted on the basis of transaction volumes and you can see that we have monumental train crashes in the making. South West One, the outsourced back-office deal between Somerset, Taunton Dean and IBM, which is now too expensive to get out of, according to the leader in Somerset, is merely a harbinger.

If you look at business cases put forward for back offices and sharing or outsourcing the same, you see promises of two types of savings: less-of-a-common-resource (i.e. fewer managers, buildings and so on) and lower costs through cheaper transactions.

The first is true, but marginal, and often happens early in the life of a venture, giving encouragement to the notion that it was a good idea; but the second is the big promise and false. Chase was wrong. It is a foolish manager who thinks it is their job to sweat the labour, who believes that costs are in transactions, who believes it is their job is to manage costs. It is the wise manager who learns to manage value, not cost.

No back office, no targets, no activity management, but instead a thorough understanding of citizen demand and staff with the wherewithal to deal with it.

You can buy John Seddon’s book of case studies - Delivering Public Services That Work Volume 2 - from Triarchy Press.

From Localgov.co.uk

http://m.localgov.co.uk/Article/Default.aspx?id=108344

Does it really take 6 weeks to get my claim sorted?!

So, you post your form off to the post office/tax office/council/insurance company/bank/cable company (* delete applicable). What happens next – from your perspective?

“They” are busy getting on with it – right?

Two weeks go by – so you give them a call?

You spend a while on the phone as they track down your details. Then they tell you they’re dealing with it – right?

A week later, you hear back – and they need more details from you. So, it’s another phone call, or you write a letter.

This happens a couple of times?

Then, after a many weeks – it’s finally completed – hooray!

Six weeks to get the job done. Sound familiar?

But has it really taken them six weeks to get you sorted. No - it hasn’t. Most everyday customer demand just doesn’t take that long to complete – so what is happening?

When you study the work, you find your query passing from one internal team to another, waiting in someone’s in-tray, reviewed by different experts, who then need to get hold of you, even though you’ve spoken to someone else in the organisation a couple of times already.

Frequently, 30 minutes of work ends up taking over a total of two hours, spread out over six weeks, and they’ve had to build a call-centre to handle all the failure demand calls coming in to chase progress, and spent £000’s on IT to “manage” the back-log.

Ask any member of staff in a system like that and they’ll know the problems, and most will know the solution too. With a change in thinking, great things can be achieved.

I’ve just completed working in one such system. It was already working quite well – with claims being processed in 13.5 days, and was about 50th out of 380 similar organisations.

Working with the whole team, we were able to:

• line the processes up to maximise the benefits of a simple flow 
• work on one application at a time 
• see each one through to conclusion where possible. 

Within weeks:

• the end-to-end time had more than halved to 6.5 days 
• almost half of all new claims where dealt with there and then in 30 minutes 
• customers were delighted 
• staff satisfaction improved 
• 4th best in the country 

Some say quality is more expensive – I disagree – its always better value. We’ve cut out the waste work in the process – which was proving to be very expensive.

Real change can happen with a willing and committed management team to have the vision, take the brave pill and see it through.

Interested: send me a mail - matt595@me.com