Activity = cost

It would seem obvious: People cost money. They ‘do the work’ so their activity costs money. So if we control their activity, we control costs.

So we see targets for activity: the number of calls call-centre workers take; the number of jobs repair men do, the number of tickets parking wardens hand out and so on.

Workers learn to do what it takes to achieve the activity target. But what happens? Customers need to call back when their call-centre agent hasn’t helped them, they need to wait for a second visit from their repair man or they might argue about a zealous parking warden.

And costs go up.

The first clue is failure demand. Demand caused by a failure to do something or do something right for the customer (Seddon 2003).