PRODUCTIVITY : At Your Service? – The productivity conundrum

Your company is on mission to improve work productivity. The problem is – the investment you’ve made to improve work processes doesn’t seem to be making the expected difference.
Every week you receive complaints that questions are never answered, that customers have to ring back because there’s no follow-up and, even then, they are not satisfied. But all your metrics are good. What’s going on?
One day, you ring your own service desk… and discover why focusing on productivity can lead you up the garden path. After wading through number of menu selections, you finally give up and press “0” for an operator. How many of your customers don’t bother going that far?
You are greeted with cheery tone and asked set number of questions for identification. You know that none of these questions, nor the answers you’re giving, are going to help the person answer your question. But the person on the line doesn’t know that yet because they haven’t even asked you what the problem is. They’re busy following script devised to help training assessment and internal reporting: The same internal reporting that shows that every target is being met.
When you do finally get around to asking your question, the service representative asks if you’d mind being put on hold. Curious now, you agree.
Ten minutes pass, during which you realise that your ‘hold music’ is terrible. Then your friendly representative returns with the bad news that you’ll have to call back tomorrow. The person who knows about this is away today.
“Strange,” you think. “This is one of the most common problems we have to solve and there’s only one person who can answer it?”
Later that day, you ask to see the call logs and note that the handling of your call met all performance criteria and the call itself has been marked as resolved. Your representative’s productivity figures are exemplary.
At this point you need to adjust your definition of productivity. That’s because service organisations are productive when they create customer value. And value, for service organisations, is defined by the customer. That’s the starting point.
Put another way, productivity measures based on output per hour worked (labour productivity) are meaningless in service organisations. They simply measure the wrong thing.
This is all the more important in economies like New Zealand’s in which 70 percent of GDP is generated in the service industries. So all the focus on productivity is red herring, it doesn’t actually help you do anything. It is the wrong measure.
Most work done in service organisations is unproductive simply because it creates no value for the customer. In fact, there is an awful lot of work done that no-one wants to pay for. And if you’re on the wrong starting line when the gun goes off, nothing else matters.
The simple reality is that your customers will be asking one of two types of question: those that create value, and those that destroy value. If they are asking questions that your people can answer there and then, you are creating value for your customers. If they are asking follow-up questions, you are destroying customer value.
Creating then increasing productive capacity requires your knowing which types of questions your customers are asking; core to your business is understanding your customer demand.
When customer first contacts you, he or she is looking for the value you can create; how you can improve his or her condition.
If this same customer contacts you again to follow-up on the first query, it means that you haven’t given full answer. These follow-up calls create at least the same amount of work as value-creating call, and there is good chance that they will occupy even more of your customer’s time and your staff’s time than the initial call. But nothing of value is created, for anyone.
It is value-destroying work, created by value-destroying demand resulting from poorly performing process somewhere in your organisation.
Anecdotal evidence suggests that some 40-60 percent of your staff’s time is spent on follow-up tasks, regardless of whether they are triggered internally or externally. This means that 40-60 percent of your capacity is being used non-productively; it is destroying value.
Service organisations are productive when they create customer value. And value is defined by the customer. It really is that simple.

Six easy steps to increase productive capacity

1. Identify the type of demand placed on your organisation. Collect and analyse the calls through your switchboard, your call centre, direct calls to employees, email enquiries and so forth. month’s worth is all you need. You will finish this exercise with list of demand categories.
2. Analyse the frequency of each category. As you collect the information about each type of demand, count how many times each type occurs. Now you have type and frequency.
3. Divide the types of demands into value-creating and value-destroying. You’ll need to exercise some judgement here, but the rule of thumb is that if the call is from customer who is seeking your help, it is value-creating. If the call is follow-up call asking when something will happen, or why it hasn’t, it is destroying value.
4. Identify the questions that make up 80 percent of value-creating demand. Ensure that all people who receive calls or emails can answer these questions on the spot, ie, they don’t need to refer to anyone else.
5. Identify the questions that make up 80 percent of the value-destroying demand or waste. Take each of these and conduct root cause analysis. Find out why they occur and take whatever steps are necessary to ensure that they do not happen again. You don’t want to create the most efficient complaints process in the world. You want to eliminate the need for it…
6. Monitor and adjust as necessary.

Stephen Hay offers business consulting through his firm People and Process.

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