A holiday card to the industry - 2007

12/24/2007

People, process, and technology.

It's a simple formula that describes what makes any business operate. For decades, those who shape business thinking have ranked them as follows:

1. Businesses are collections of processes.
   
   
2. Businesses hire people to perform roles in those processes.
   
   
3. Businesses use technology to automate processes or process steps.

Process is the centerpiece, or it is so long as you ignore all of the logic and accumulating evidence that says it isn't so.

It can't be. No matter how well-designed its processes and how superior its technology, a business with disaffected, unmotivated, apathetic employees ... led poorly by definition ... will fail.

Nothing can overcome the wrong people.

Great employees, in contrast, will get the job done whether there is a process in place or not, let alone whether it's a good process. They will get the job done with substandard technology. They will get it done, even when company management puts barrier after barrier in their path.

Business consultants call these employees "heroes." Succeeding through heroics isn't supposed to be good business.

And it isn't, because relying on heroism is like relying on luck. Eventually, luck runs out. Eventually, too, heroes fail to beat the odds that are stacked against them.

Many in business, when they use the term "hero," do not mean it as a compliment. This makes no sense. Men and women succeed through heroics because they must, not because they choose to: With better processes, technology, leadership and support, extraordinary effort might be less necessary. Until then it's the source of business success.

Great employees succeed no matter what. Bad employees fail no matter what. Most employees create superior results with the right leadership but don't insist on it: Badly led, they become apathetic losers.

With the right leadership most employees succeed. Without it most employees don't. It's true of leaders but not of technology or process.

Then there are customers. It's a rare business that succeeds without them. Supposedly, they no longer feel any loyalty.

So let's look at baseball. Some teams have fanatically loyal fans -- teams like the Boston Red Sox and New York Yankees, who have been known to win from time to time, but also teams like the Chicago Cubs, who, if they fail to win the World Series next year will have achieved a full century without one.

Something these teams have in common: They have never threatened to leave for economically warmer climes or better stadia. They have, instead, maintained a steady, warm bond with their fans, who enthusiastically return the favor.

Some businesses that are not baseball teams also sustain loyal customers. Once upon a time there was, for example, the Green Mill, a "three/two" joint (that is, it served weak beer) on the corner of Grand and Hamline in St. Paul.

The Mill was the center of my social life. It was more than that -- it was the center of a community. Less sanitary than Cheers (but then, isn't any worthwhile bar when you're young?) it was the place everybody knew my name.

Everyone knew Galvin's name as well. I recall an occasion when Galvin cashed a check at the Mill. Bikko, who tended bar at this fine establishment (and was known to buy a round from time to time), asked if the address on the check was correct. Galvin affirmed that this was so.

Bikko took a second look. "Hey, this is our address!" he said. Galvin affirmed that this was so as well.

"Makes sense to me," Bikko remarked as he handed Galvin two tens and a five.

The Green Mill is now a classy, faux-potted-plant-laden chain of gourmet Italian restaurants. It has strong process that creates great product -- Chicago-style deep dish pizza and gourmet beer. But nobody knows my name, nor wants to.

I might go there for a meal once every year or two.

The Green Mill of my youth didn't become a community through process or technology. It didn't do so through product quality either: The beer was thin and the pizza was, so far as we could tell, cardboard covered with cheese.

I was there every night. It was home, because Bikko behind the bar and Schultzy at the tables were our hosts and our friends.

If it matters, research confirms that customer loyalty comes from loyal, committed, enthusiastic employees more than it comes from any other factor, and that business success comes from loyal customers more than it comes from any other single factor.

The research isn't really necessary, of course -- all that's needed is a moment's reflection.

It isn't the technology. It isn't the processes. It isn't even the products.

It is, happily enough, the people.

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Copyright and other stuff -- The great KJR link point

[Yet] Another helpless desk

12/17/2007

In the beginning was Deming.

Deming introduced measurement to industry in the 1950s. A statistician, he relied on sophisticated multivariate techniques. He encouraged those who didn't understand sampling theory, analysis of variance and multiple regression to stay away and let the experts handle the data collection and math.

American industry ignored Deming and his theories -- I can't help but suspect America's enduring cultural distrust of the intellectual -- but Japan did not, turning itself from a defeated military power to a fierce economic superpower in the process.

As a culture we are nothing if not adaptable, and so "metrics" happened in (to?) America. Sadly, we aren't so adaptable that we were willing to actually learn, for example, statistics.

Which might explain why most of the metrics stories I hear are horror stories, not successes.

I'll be the first to admit to flaws in my sample. I'm sure it is non-stationary, biased, suffers from heteroskedasticity and perhaps the heartbreak of psoriasis as well. I'm nonetheless confident in this conclusion: Call centers are the most mis-measured function in business, and IT Service Desks are the most mis-measured type of call center. Which brings us to this week's anonymously provided tale of woe:

At the Help Desk where I currently work, they like to measure First Call Resolve (FCR).

What I am finding out from longtime tech support people is they like to game the metrics. Here's how it works:

First, the system defaults every call to Resolved whether it really is or not.

If a user never calls back to say "That didn't fix it", you get a freebie. If, on the other hand, the user does call back to say, "Yep, that fixed it," and the tech on the line documents the call in the system notes, you just lost an FCR. Why? Because you weren't the LAST person to talk to the user. Yep, the last person to talk to the user on a call gets the FCR. It's as if the relief pitcher who comes in with two outs in the ninth, a five-run lead and the bases empty gets credit for the win.

So potentially someone else could make you look bad, just by creating the last entry in a call log. And after five days, a ticket goes from Resolved to Closed and there's nothing you can do about it.

You always open a ticket on a new call, find out what the issue is, then decide if it's your queue or not. If not, you transfer it. However, the queue you transfer to will never get an FCR on that call even if they solve it immediately. Why? Two people have talked to the user, that's why.

Some tech guys get around that by opening up their own ticket and documenting it for an FCR, leaving your ticket out to hang. And that can ding YOU just as badly since it's been presumed you abandoned it. If you get a call where no one handles it but they actually need to call outside of tech support to, say, Financial Ops, you document it but those calls are not counted as FCR. They are deducted from your score.

Strangely enough, some of us were talking about this the other day -- about how to increase FCR legitimately. Some of them had researched suspicious FCR standings (which are posted for individuals) and found that some of the lumps were posting gratuitous FCR calls (in other words, fake calls). You could tell by the shortness of the ticket and the vague incorrect answers that were in the notes.

The best way to find the lumps? Not the FCR metrics -- they're worthless. Instead, just ask the other techs. Most tech people are fairly honest in appraising their fellow co-workers. It's not that we don't like them. It's idiotic management playing games with our stats.

So, like the plaque says, "Be careful what you measure. You'll get it.

The culprit here is clear: Simplemindedness.

A Help Desk is neither simple nor solitary. It's one part of a system that should: Work on what's most important first; resolve incidents quickly; and prevent recurrences.

Assessing the system's outputs isn't all that challenging. Assessing the engineers and technicians who create the outputs is tougher.

They have to resolve what they can, properly refer what they can't, accurately document their work, and escalate underlying systemic defects. That requires: Intelligence, judgment, technical skill, diligence, and collaboration. It's a multivariate situation.

Just ask Deming.

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Copyright and other stuff -- The great KJR link point

Once in awhile it's done right

12/10/2007

Asked if the study of creation could provide any insights as to the nature of its Creator, the great biologist J. B. S. Haldane replied that clearly the Creator has " ... an inordinate fondness for beetles."

Coleopterans account for about a quarter of all animal species on this earth. Mammals, in contrast, contribute about a quarter of a percent of all species. Don't feel bad. By other measures I'm sure we human beings are more important.

Humans dominate all other species (except, perhaps, for some viruses and bacteria, along with ants, spiders and the aforementioned beetles) because of our ability to think: To make tools, to plan, to transfer skills and knowledge to our progeny.

That's how humans dominate other species. Individual humans dominate other humans through their social skills. These two facts explain most of human history: We win through intelligence. I win through what Daniel Goleman calls "emotional intelligence."

This is why most businesses fail to learn from their successes, as explained in detail in the last several editions of Keep the Joint Running: Learning from success is good for the company but not necessarily for those who run the company.

Emotional intelligence is a vital quality for effective leaders. The problem arises when they decide to value emotional intelligence more than tangible skills, knowledge and logical decision-making in the organizations they lead. It's how organizations start down the sad path to what my business partner calls "mediocracy."

It needn't be so. As evidence I submit this tale from a regular KJR correspondent:

I recently finished a six month job rotation as manager of our Service Desk (formerly "Helpless Desk" according to our users).

The prior manager measured performance on a strict count of tickets handled, weighted by priority. Since we can't reward by dollars (union shop), we use perks like window cubes, preferred schedules, and first choice on vacations as incentives.

The top performer for the 13 quarters prior to my arrival was an individual who I really didn't see doing anything. The quarter ended and he was again the top man. I decided to find his secret to success in an effort to raise everyone else's game. So I started analyzing his tickets.

His method was simple. Every single call he took was labeled Critical. If he took a ticket originally handled by someone else, he upgraded it. If he got repeat calls from the same user with the same problem, each was a new ticket. He closed out every ticket within two hours, regardless of whether the problem was handled or not. We measured volume, so he delivered volume.

However, when he trained someone new, he always preached completion, follow-up, and thorough documentation -- in short, how the job really should be done. He gamed the metric both ways (boost my numbers, lower your numbers). And we rewarded him for it.

I changed the rules and the measures. Those answering the phones started with the question "Is this a problem we have worked on before?" and reopened the old ticket instead of writing a new one. They wrote all tickets and graded their priority. They assigned the tickets and those handling them did not have authority to change the priority. I measured who got things fixed "once and for all" rather than incident volume.

Lo and behold, the top performer fell immediately into the bottom 10%. In the next quarterly survey of our effectiveness, users rated service 20% higher than ever previously. I was offered the position permanently (and declined it).

Our "top" performer left due to "absenteeism problems."

I left my successor a plaque that read "Be careful what you measure. You'll get it." (It's from one of your columns on metrics -- credit where it's due.)

My successor went even further. He rewards the people who identify patterns of problems and solve them, for individual recognition. He did away with the perk system in preference to a team system. His metrics are number of tickets, number of reopens, time from receipt of call to start of work, and customer satisfaction.

He also tracks the number of calls received to prevent gaming the first number by not writing tickets. The desk is way up in satisfaction, and he definitely is on the right track.

Oh, and he still uses the manual written by the former top performer to train people.

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Copyright and other stuff -- The great KJR link point

Learning in the wrong direction

12/3/2007

Can an organization learn?

In response to the last two columns, which talked about the barriers to organizational learning and how to overcome them, a subscriber challenged me on this point. Learning, he said, is something people do, not organizations.

I agree, organizations aren't just people, only bigger. As has been pointed out in KJR more than once, they're a different type of creature than human beings, with different motivations and patterns of behavior (see What corporations and spleens have in common Keep the Joint Running 5/5/2003).

Can organizations learn? As is usually the case, the answer depends on how you define "learn." Since my scientific training is in sociobiology, I define it operationally: To learn is to change behavior in an adaptive way based on experience.

If that's the definition, the answer is an unequivocal "yes" -- organizations do change their behavior based on what they experience. They learn through changes in the behavior of their executives, managers and staff, just as animals learn through changes in the behavior of individual neurons. The difference: Executives, managers and staff can prevent the organization from learning if it isn't in their best interests.

To illustrate the point, here is a case study, sent in by a subscriber who really, really needs to remain anonymous:

The company I worked for had several divisions. I was a member of the smallest and we were led by a rogue Product Manager who thought we should write software the clients loved and could understand intuitively.

So we sat with clients, visited their offices to watch them work, etc. Our software won design awards, gained more than 50% market share in its space, and our engineers got standing ovations at user conferences.

At our annual company meeting the CFO would go over "the numbers" broken out by division which was fine when our division was tiny but as we grew people began to realize that we generated several times as much revenue per person as the other division -- we had 1/10 the total resources generating 1/3 the quarterly revenue.

Then it got childish. The "numbers" were no longer broken out by division. There was grumbling about special people making more money in "that" division when everyone was working "hard." The divisional portion of the yearly bonus was discontinued in favor of an overall company performance bonus.

But lo and behold, the success continued. At the peak a division containing 1/10 of all resources serviced 40% of all clients, and generated more than half the new software sales revenue vs. all other divisions combined. That factor of 10 revenue generation ratio was just too much and we soon found our core members redeployed to other projects, new mandates to use code libraries and architecture based on the other divisions' products, etc.

The moral of the story is that we succeeded for the customer for awhile, as evidenced by our developer-to-customer-support ratio (2 to 1) vs the other divisions (1 to 4) and support-to-customer ratio (1 per 700 vs 1 per 40).

But we failed in the long run because we couldn't bring the rest of the company along. Our success generated jealousy and animosity in the VP level office suites and since we were so small (1/10 the VP's) politically we never stood a chance. Once the high and mighty hit on the excuse above we got squashed like a bug.

The company was sold a few years later to a large software accumulator and is now being milked for its support fees. Which as you notice is great when you have a buggy, hard to use product with proprietary data and you charge high support and maintenance fees. But when customers don't need support because their old version works just fine that model breaks down.

The end result was the mass exodus of the best and brightest and now only a handful of the original group remain. All of us are now seeking to recapture that 5-6 year golden era before we were told to do less well so as not to offend our co-workers.

Truth is definitely weirder than fiction.

If this were fiction -- say, an episode of House -- we'd put these symptoms on a whiteboard and figure out what disease explains them all. My diagnosis: Weak leadership.

A strong CEO would have created an environment that recognized and emulated success, building it into the corporation's structure, compensation, and culture. A strong CEO would have recognized that in business, "fair" doesn't mean equality. It means meritocracy.

This CEO opted for "mediocracy" instead.

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Copyright and other stuff -- The great KJR link point