When you study service organisations you learn that most have a high variety of customer demands. The way to optimise the system – deliver better service at lower costs – is to design it to absorb the variety of demand.
However, in conventional command-and-control service organisations, standardisation, central to the present style of management is thought to be the way to reduce costs. Paradoxically, standardisation drives costs up.
Customers can ‘see’ the waste: they know how many times they need to call to get service, they are irritated by IVR systems (‘press 1 for this…’) that fail to get them to someone who can help them and hence mean they have to repeat themselves, they are infuriated by service workers who follow their scripts or procedures and thus fail to listen to or solve their problem.
These are the signs of a failure to absorb the variety of customer demands. Forcing customers down standardised processes doesn’t work.
By instead understanding the demands from customers, it is possible to train workers against demand. Training workers against demand is the first step in designing to absorb variety. And ensuring they are responsible for what they do is preventative (the better alternative to inspection).
All arbitrary measures (standard times, cost, targets, standards) have to be removed from the system and instead real measures, related to the purpose of the service in customer terms, are used to help managers and workers alike understand and improve the capacity of the system to absorb variety. As that improves, costs fall.