Adventures in Customer Service, Looking for "Lean Solutions"

I was a big fan of the book Lean Solutions: How Companies and Customers Can Create Value and Wealth Together, but I'm not sure how much of an impact it's had on the business world. There are still far too many siloed, un-Lean "solutions" out there that do indeed "waste the customer's time" (as Womack and Jones railed against... don't waste the customer's time, they said).

It might just seem like I'm ranting, but stick with me to the end and I think there's a lesson or parallel that can be drawn for hospitals and other types of organizations.

Case 1: I lost my AT&T corporate calling card while overseas last week. I used this as a backup for when my Skype internet calling wasn't working well due to hotel bandwidth issues. So I called AT&T's customer service line and had this exchange with the auto voice "recognition" robot:

AT&T: What can I help you with?

Mark: I lost my card

AT&T: You lost your card. Please enter or say your card number.

Um, I, you know.... lost the card! I'm sorry I didn't have a backup somewhere. If I had the number written down, I could have continued using the card and wouldn't have had to call.

Frustratingly enough, the live human I talked to made me repeat all of that information, which proves the role of the auto voice bot is to screen customers (for AT&T's benefit) rather than providing service (for the customer's benefit). Any time you have to repeat a number you previously typed in, it's probably because the systems don't communicate, rather than being for the excuse of "security purposes."

So, bad marks to AT&T

Case 2: I'm actually quite thrilled with amazon.com right now. My personal credit card # got intercepted or stolen in England somehow, although I didn't lose the physical card. Wo what does Amazon have to do with this? THEY discovered the problem.

I'm sure there is some fraud prevention and cost avoidance on their part, but this also served me, the customer, well. I got an email from Amazon (one that looked a bit like a "phishing" expediton, but seemed legit since it didn't want me to click or enter info anywhere) that said, in part:

We perform routine reviews of orders to protect our customers. During one of these reviews we discovered that an account was opened with a card used by you on another account. For your reference the card in question is a XXXX card which ends XXXXX.

As it appears the card was used without your authorization, we have closed this new account and cancelled any outstanding orders.

Wow. Amazon discovered this BEFORE my credit card company. Nicely done, Amazon. To me, this goes above and beyond sending an email out like this.

Case 3: Time to cancel that credit card number. I looked online and found, of course, a fraudulent charge on that card, about $500 in "Home Depot" type purchases in an English town about 15 miles from where I was staying.

American Express was pretty much a pain to deal with, as I was handed from person to person.

I started off with one phone rep, one who took care of disputing the card. I then had to be transferred to a different department to issue the new card and number. They asked if I wanted the card over nighted out to my home address (I was on my way from from England, so I said yes). Believe it or not, they had to transfer me to the "overnight department" who AGAIN collected my info an initiated the overnight shipping.

This wasted my time. And it was frustrating.

American Express apparently has its call center and customer service organized along narrow, specialized silos. This might make it easier to train people, but it's not easier for the customer. Why not organize along "value streams" or customer needs?

I'm sure there are enough people in my situation where they could have a department of people who could handle the typical needs of a "stolen card or #" customer END-TO-END. I'm sure you process map out the likely customer needs in that scenario, equipping the staff with training required to, imagine this, actually take care of their needs, completely.

General Lessons:

Of course, this reminds me of how hospitals can be structured -- full of silos that hand off patients. One hospital I worked with had patients complaining that, before outpatient surgery, THREE different people called them for different reasons in the same day. When they got voicemails from different people in the same area of the hospital, it was confusing and required multiple calls back. It wasted their time. The "Lean" recommendation was to cross-train staff so that a SINGLE phone call could address patient needs.

So it's not just phone companies and credit cards. Can your hospital or organization make similar improvements, organizing around value streams or patient pathways, rather than by silo or function? What gets in the way of this, other than cost and inertia?

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Seth Godin sounds like Lean Solutions

Seth's Blog: Learning from frustration

Once again, Seth Godin intersects with the concepts of the book Lean Solutions: How Companies and Customers Can Create Value and Wealth Together.

Seth writes about the Lean Solutions principle of not wasting the customer's time. He also has some interesting ideas about treating customers as source of revenue (thinking of creating value) instead of viewing them as a cost. He complains about Verizon (a pretty easy target, as are the other phone companies):

If you view calls from paying customers as expensive, then your goal will be to cut the cost of these interactions. That means fewer hours, more voice recognition and more wasted time by your customers. Once you've gone down that road, everything else seems like a soft-hearted, expensive compromise.

So, I start by flipping this on its head. Verizon spends a fortune on advertising and outbound marketing. How much of that budget would they have to allocate/invest in order to turn their customer service into a discussion-worthy best in the world? Or at least enough to keep people from switching in disgust? Not much, it turns out.

This leads quite easily to the first conceptual breakthrough: waste your time, not mine! Be open 24 hours a day, because, after all, the amount of customer service you need to do doesn't decrease if you work fewer hours. In other words, spread your people around so they can talk when your customers want to talk.

Seth's known as a "marketing guru" but he's also pretty sharp, operationally. Check out his post. He also touched on a favorite pet peeve of mine - repeating information that you just typed into a phone keypad:

It means that you don't ask me to type in my phone number or account number, but if you insist, then at the very least you make sure that the person who eventually gets my call doesn't ask me for my number again! Getting this wrong for three years in a row is not an error. It's arrogance.

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Laughable Customer "Service"

I know this falls squarely into the "must be a nice life if this is what you have to complain about" category, but I'll share this anyway.

As I prepared to go to the UK for work for 17 days, I had a car service lined up so I could avoid (my company could avoid) paying for 17 days of parking -- the car service would be cheaper. At the scheduled time, the car had not arrived, which was troubling since a car service normally shows up 15 minutes early.

I called and got a dispatcher who said the driver (pictured at left, artist rendition) was "10 minutes away." 15 minutes later, no car, so I called back. The dispatcher (in New Jersey) had trouble communicating where the car was and there was no way for me to talk directly to the driver. It finally became clear that the car was still 30 minutes away... so I bailed and drove myself to the airport.

My travel agent followed up after I called to complain -- the car service wouldn't charge me for the trip. Ya think? That's the bare minimum -- they really should be on the hook for the parking charges.

I was willing to let it all go, but I got an "apology" letter in the mail.

It reads, in part:

"I understand that weather conditions, holiday traffic, and massive airport delays made a difficult dispatching schedule and we were extremely delayed in picking you up, which forced you to take a cab."

Holy Schnikes, what a laundry list of excuses! The weather was perfect that day. June 2 isn't exactly a huge holiday in the U.S., and I don't think there were "massive airport delays." And while a cab would have been a cost savings, if I had time to wait for a cab, I would have waited for the car service!!!

So, the final comedy -- as these letters tend to go....

"... we take pride in our high quality, on time service.... I offer no excuses, just an apology."

No excuses except all of them in paragraph one of the letter!!!!

It's amazing that a company like this is still in business. Yes, a driver is bound to be late once in a while, but the poorly thought-out response is even more troubling. I did try contacting the rep, as invited, and haven't gotten a call back. Oh, this is "Operator of the Year" as awarded by some industry magazine, their letterhead points out. Yikes!!

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The USPS Should Error Proof This

Express Mail: USPS Says Guaranteed Overnight Isn't Guaranteed. What?

Saw this post on The Consumerist blog about how the United States Postal Service does NOT guarantee overnight delivery of "guaranteed" overnight documents.... IF you place the package in a drop box instead of handing it to an agent at the counter.

What?

According to the blog report:

Dorothy found out that the USPS's guaranteed overnight delivery doesn't apply if you use their Express Mail boxes, because "Letters get stuck up in the top of the box all the time. Sometimes, it takes days or even a week before we find them." Hey post office, maybe you should try to check the top of the box every day. Problem solved!

Checking the box every day would be a form of inspection -- that's waste.

It would be better if the USPS could design a drop box that prevents letters from getting stuck. It's called "error proofing" (or "poka yoke" if you insist on the Japanese term). It's not really a new concept. How hard is it to design a box that works perfectly?

Again, from the Consumerist:

...nowhere on the website, while purchasing the Express Mail option did it state that items needed to be taken to the window/desk in order for the guarantee to apply.

I asked her, "Where on the box does it say that?" She then told me she had handed my form over to her supervisor.

I was given my full refund without any further discussion, but we did have to wait for half an hour while all this occurred. Although the supervisor did not want to give me the refund. She actually explained, "Letters get stuck up in the top of the box all the time. Sometimes, it takes days or even a week before we find them."

Consider yourself warned. Does FedEx have this problem? Or DHL?

To top it all off, one commenter claims:

This is absolutely true. I worked as a USPS letter carrier and when I had to empty collection boxes at least half the time there would be a letter or two stuck against the side of the box or at the very top of the box. To combat this, the USPS has a company send out test letters to see how long it takes for them to reach their destination. They also do random checks after you leave to make sure you grabbed every single letter. People have been fired over this.

Step 1: Design a box that doesn't meet customer or employee needs
Step 2: Do inspections to see how badly it works
Step 3: Blame and fire people

If you believe that, it's not a very encouraging thought process they are following. Typical bad management, eh?

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United Adds $25 Fee for 2nd Bag

Yahoo News Story

By Mike R. Lopez:

I saw this story about United Airlines charging customers to check a SECOND bag. Not the fifth or sixth bag, but NUMBER TWO!

This reminded me of a training slide that we have in our Lean education program. There are three ways to cut costs. You can cut costs across the board by reducing all budgets a fixed percentage. This is the lazy path. You can cut costs by cutting services. This is the stupid path. Finally, you can cut waste. The smart path.

This extra fee strikes me as part of the stupid path because it cuts a core service and makes customers pay extra for something they get "free" from other airlines. According to the article, United expects it to generate $100 million in revenue and cost savings a year. Does this mean that United's tickets will be consistently cheaper than companies that do not charge a per bag tax? I highly doubt it as the article shares that this is but one small part of a larger plan to charge more for less, a clear violation of the Profit=Price-Cost rule:

Airlines want to charge more for not only checked baggage but assigned seats and other services. Investors have urged airlines to pass on the higher costs of fuel to passengers through ticket-price increases or similar surcharges.

If United is planning to save money by flying fewer people, they might be able to claim savings because I don't think their scheme will end up with them making any more revenue. We're likely to see United lose revenue to the benefit of airlines that are more responsive to real flying customers, not day traders.


********UPDATE 2/26/2008**********

It appears that US Air is going to charge $25 for a second bag.

**********************************

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Amazon & Putting Customers First

Put Buyers First? What a Concept - New York Times

I'm a huge fan of Amazon (AMZN), having first ordered a "required pre-reading" book from them in March 1997, before I went to grad school. I've hardly had anything go wrong with an order or a shipment in that decade, but, if something goes wrong, they take care of it without hassle. In a trivial example, my Simpsons Movie DVD was recently shipped in a flimsy paper envelope (instead of a cardboard shipper) and was damaged, so they overnighted another out no questions (with a pre-paid return mailer for my damaged one).

This recent NY Times story talks about their "customer obsession" principle and an example of customer service that was more "costly" in a traditional, short-term sense: a customer ordered a PlayStation3 for her kid's Christmas gift and, apparently, an apartment neighbor signed for it, leaving it (oops!) in their landing.... well, the box got stolen (Amazon box markings will draw attention, eh?). Even though she had no proof and it wasn't Amazon's problem:

After assuring himself that I had never actually touched or seen the PlayStation, he had a replacement on the way before the day was out. It arrived on Christmas Eve. Amazon didn’t even charge me for the shipping. My son was very happy. So, of course, was I.

Pretty amazing choice on Amazon's part, isn't it? Some might say a stupid choice... Amazon absorbed the cost... but probably built life-long loyalty with this customer (who, it turns out, could write about it in the New York Times... I assume Amazon didn't know that).

The article talks about the trade-off between Amazon's long-term view of building customer loyalty and doing what it takes for the customer versus the Wall Street view that costs need to be managed in the short0-term and giving away PS3's is hardly good short-term business.

The NY Times writer continues:

But I couldn’t help wondering if maybe there wasn’t something else at play here, something Wall Street never seems to take very seriously. Maybe, just maybe, taking care of customers is something worth doing when you are trying to create a lasting company. Maybe, in fact, it’s the best way to build a real business — even if it comes at the expense of short-term results.

Founder and CEO Jeff Bezos is the driver of the customer obsession principle:

It has been the guiding principle behind Amazon since it began. “Jeff has been focused on the customer since Day 1,” said Suresh Kotha, a management professor at the University of Washington business school who has written several case studies about Amazon. Mr. Miller noted that Amazon has really had only one stated goal since it began: to be the most customer-centric company in the world.

Pete Abilla (over at Shumla.com) has written about Bezos as well.

But many on Wall Street don't appreciate that view:

Wall Street, however, has never placed much value in Mr. Bezos’ emphasis on customers. What he has viewed as money well spent — building customer loyalty — many investors saw as giving away money that should have gone to the bottom line. “What makes their core business so compelling is that they are focused on everything the customer wants,” said Scott W. Devitt, who follows Amazon for Stifel Nicolaus & Company. “When you act in that manner many times Wall Street doesn’t appreciate it.” What Wall Street wanted from Amazon is what it always wants: short-term results. That is precisely what Dell tried to give investors when it scrimped on customer service and what eBay did when it heaped new costs on its most dedicated sellers. Eventually, these short-sighted decisions caught up with both companies.

So what are the parallels to Lean or the Toyota Production System?

1) Customer focus -- Lean teaches us to focus on customer needs and to realize that value is defined by the customer

2) Long-term thinking -- principle #1 of The Toyota Way says to base decisions on the long-term, even at the expense of the short-term.

Toyota's stock (TM) was down 24% last year even though they became the #1 sales volume automaker in the world. Toyota apparently isn't trying too hard to manipulate their short-term stock price. At least one analyst praises their long-term thinking:

Long-range planning is one reason Mr. Yoshida of UBS remains upbeat on Toyota. "They aren't looking 10 kilometers down the road, they are looking 100 kilometers down the road," he says.

Then again, Amazon's stock has doubled in the last 12 months, so they aren't being punished too badly by the Street. The WSJ listed Toyota as a good stock buy... but the law of averages kicks in and stocks that underperform one year tend to recover the next...

But I don't obsessive track stock prices. What I do know, as a customer, is that Amazon is consistently offering new, innovative services and is doing their best to take care of customers. I remember, back in 1998, when it was impossible to find a phone customer service rep for Amazon (they wanted you to do it all online). They've evolved and started offering phone service as their customer base grew. I'd bet Toyota and Amazon both have a good decade ahead.

Now that I've written my "love letter" to Amazon, I'm sure some of you have customer service beefs with them... feel free to use the comments feature. In terms of your company, how are you balancing the short-term of customer service "costs" versus long-term customer loyalty? Would you deliver the "free" PS3 or not?

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A Very Non-Lean ER Experience

Thanks to a Lean Blog reader, Matt, for sending this first-hand account. I'm sorry he (and his wife) had to go through this experience. This is posted with his permission. I'll buck convention a bit and put my comments in the quote boxes. Matt's text will appear as the normal font below.

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Saturday night I had to take my wife to one of the local ERs. We got there at 9:40pm. When we got there, I filled out paperwork to register her with all the basic information (name, symptoms, SSN, address, etc…….). Then we had to sit there and wait……..and wait…….and wait. This was especially frustrating since my wife was curled up in the fetal position in extreme agony and no evened seemed to care.

Mark: This is sadly reminiscent of this episode at an LA hospital, but Matt's wife survived the E.R. encounter, in this case thankfully.

The maddening part was there was no privacy (except chest pain). Everyone else in the ER had minor things (sprained ankle, minor headache, etc……..). After we checked in a mother with a baby that could not have been older than 1 came in. The baby was green! It freaked me out. It was the one person I thought should get bumped in front of us, but they didn’t. They waited in the FIFO line too.

After 3+ minutes we got called into the triage room where about half the questions got asked again that were on the sheet I filled out. I found this frustrating since the data from our registration sheet was put into the computer and that is how triage got our name and called us in. Where did the rest of our data go? Why ask again? The triage nurse said this was part of registration.

Mark: This is a very common waste seen in E.R.'s -- definitely the waste of overprocessing, or a defect in the process that you have to repeat yourself. There's a minimal amount of repeating that's necessary to confirm they are looking at the right patient, but I'm sure some of the information just didn't get passed along. That's something many E.R.'s that work with Lean fix, only asking for information once, instead of multiple times. It saves employee time and causes less frustration for the patients. The nurse obviously doesn't feel too empowered to "kaizen" her system... just doing her job.... what can you do about it? That's a sad attitude to see, the culture creates that mood.

Then we went back out into the waiting room and waited for another hour before they called us back. As they were taking us back they stopped me and said that I had to register to go back with my wife. I had to register at the same desk as the first registration an hour and a half earlier. So, my wife is in agony and can barely walk and I have to stay up front and to have my ID scanned and a sticker badge given to me. Then I get let in and I have to search for her room. I finally find her and we wait for a third person to come in and ask the same registration questions again. She is even wearing a badge that says “Registration” on it. My wife asks why this wasn’t done in the waiting room where we have been for that last 1.5 – 2.0 hrs. The lady replies that “this is just the process.” We could’ve had all the registering done in the waiting room up front. This seems to be a little more batch (“batching all the paperwork up front”), but I would argue two points: 1. there isn’t as much batching as one might think because we are getting all the same questions over and over with a couple of new ones, and 2. this would be more customer focused because my wife is in pain and we wouldn’t be separated plus she wouldn’t be getting upset about answering all the same questions over and over again. At this point, my wife looks up an me and says, “This isn’t very lean is it?” I was glad to see her smile through the pain.

Mark: Matt and his wife made the point perfectly, so I won't elaborate much. Matt should have been able to register while they were waiting. Again, there's more of that "well, this is just the way it is" attitude from the staff. That's something you would have to work on during a Lean implementation, convincing people that they actually can work at improving the system, not just accepting it for what it is.

We wait for a long time and finally see a doctor who orders a CT scan, so we wait for the scanner to be setup and then we wait for the results and then we wait for the doctor, etc…………..

During all this waiting I speak with some of the nurses. At this point it is about 1 or 1:30am. The nurse tells me that this is a real slow night. Usually the halls are lined up with patients. I notice that they can’t find their electronic thermometer and go borrow one from another area, the supply area is labeled but is very messy and can’t tell how much is suppose to be there. The nurses can’t find things and quite a few times are just sitting around talking about their lives outside of work. They spent a lot of time doing this. Not because they don’t care but because they are waiting on doctors and information and whatever they need to treat the patients.

Mark: So there are 5S and organization issues... people can't find things, that leads to wasted motion and waiting time. Again, very common. The idea of people just sitting around and talking about their lives.... sure the nurses might have waiting time (waiting on others), but you can also see the opportunities to use that time for kaizen. Or, if you reduce waiting time and improve the flow of work, the nurses are going to lose some of that watercooler time. Then, will they perceive they are "working harder" or will they be happy that they can spend more time on direct patient care (the "Value adding" work)?

The most disheartening thing I heard all night was about a computer. I heard that they had test results back on the baby that was green (and I literally mean green) but nobody has been able to view them for an hour. They were having problems getting the computer to work so they called IT. There was no manual override or way to get results so the baby couldn’t be treated until they got the computer working. WHAT!!!!!!!!!?????????? I couldn’t believe what I was hearing. I don’t know what happened to the baby and the test results but I hope everything turned out alright.

Mark: There definitely should be a backup plan or a manual process for getting that result. Worse case, they should have been able to go to another PC, unless their whole information system was down. Even then, they should have been able to make a phone call to the lab to get those results. I wonder if people didn't know the backup process or if they were too busy to take those extra steps.

At 2:30am, we finally left the ER with pain medicine in hand nearly 5 hrs after walking in the door. I figure only about an hour was value added. This house is being generous too because it includes the walk time to the CT scan and the 20 minutes we had to wait after receiving the pain meds before we could leave.

Like you have said, the doctors and nurses were great people and wanted to help. The systems just sucked!!! I was thinking about lean stuff all night and trying not to blame the people but at times I would even find myself getting upset with the people “just sitting there” and not helping. My emotions would just take over as I watched my wife in pain.

I have always believed that lean is for everyone and every place because it is the mindset. Saturday night was just one of those “hit home” experiences that brought it to light.

-----------------------------

Matt, thanks so much for sharing that experience. That scene is repeated many times over every night. This shows how difficult it can be to NOT blame the individuals working in the system. Sitting around and chatting about home or Dancing with the Stars is just a symptom of systemic problems. It takes leadership to solve situations like that, and Lean can help. The good news is that Lean IS helping, we just need more of it, at hospitals like the one Matt and his wife went to.

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Appointments and Wasting the Customer's Time

No, I'm not complaining about the old "4 hour window" for service appointments. I ran into a new type of waste this morning.

I had a plumber appointment, with a 10 to 12 noon window (which I am OK with). I was on the phone already and missed a call that was coming in. Turns out it was the plumber (through a national brand name) calling to confirm I would be home. So, I called back 10 minutes later and was told the tech was now busy because I didn't take their call. It's now probably going to be another hour before they get someone out here and they'll miss their window of time.

I told the phone rep that this practice of their was irritating, that I was here when I told them and they didn't tell me I'd have to answer the phone before they sent a person out. She said basically, "well it's policy because sometimes customers aren't home when they say they will be."

So, they are wasting my time and punishing me because of what other customers do to them. Nice, huh? Ironically enough, when I missed the plumber's call, I was on the phone with a different contractor, a guy I hired to put up Christmas lights for me (because I'm gone from home too much) and he had broken a front window and he's working to get a repair job lined up. The waste of "defects" leads to other waste for me, the waste of waiting, as a customer.

This reminds me of healthcare, where everything is oriented around not wasting the doctor's time. Here, the plumber is inconveniencing customers in the name of not wasting the plumber's time.

That's wrong. That's not customer focused. I should send them a copy of Lean Solutions: How Companies and Customers Can Create Value and Wealth Together. I guess next time, I'll use a local plumber so I don't have to deal with rude call centers and silly processes.

I do realize, that if this is worst thing I have to complain about today.... my life is very fortunate and cushy. A good thing to remember and to be thankful for over the holidays.

Customer Focus?

by Jamie Flinchbaugh, Lean Learning Center

Here's some not-so-interesting news that I believe indicates not being focused on the customer and the subsequent focus on waste elimination. Harley-Davidson is changing their ticker symbol on Wall Street from HDI to HOG. Read the press release here.

How is this an improvement, really? Were people trying to buy Harley stock, but couldn't guess the ticker symbol? Will the listing on the stock section of the newspaper double as an ad that sells more motorcycles? Will stockholders pay more for their stock, or riders more for their bikes?

Let's look at it from the waste standpoint. Think of all the systems, websites, individual portfolios, news feeds and so on built around the ticker symbol HDI. All of that has to change. Information will be lost. Delays and confusion will occur. People manually must change systems. Waste, waste, waste. Not a value-added tast in there.

I get worried when companies seem to have more time to spend on their ticker symbol and annual reports than they do on the customer and producing great product with the least amonut of waste. This isn't the only example, by any stretch of the imagination. What's your favorite example?

Can You Ignore Your Customers For a Week?

Since I've been moving into "lean healthcare" consulting, I am joining one of the healthcare management societies, analogous to an APICS type organization, I suppose. I'll leave this group un-named.

As I was poking around their website, I clicked on the bookstore, to be greeted wth this:

Please mark your calendar! Due to our annual physical inventory no orders will be shipped January 5 through January 13, 2006. We will resume shipment on January 16, 2006. Thank you for your patience.

Wow, how un-lean. This organization doesn't purport to be lean, but it's hard not noticing the lack of customer focus that's required to shut down for more than a whole week, due to their internal operations needs (a physical inventory). Most of us don't have that luxury, do we???