Credit card companies that give good service

Thanks to all those readers who took the time to suggest a better credit card service than Barclaycard. In case you are interested the Cooperative Bank came out top. Many also told me of their problems with credit card companies, and many were unhappy Barclaycard customers like me. Regardless of the company concerned the same things both upset and delighted customers.

When using the card in another country, some got the experience I get and were similarly annoyed, some got a call from an agent to find out whether the card was in the right hands. When a spend indicated the risk of fraud, some, like me, found their card disabled, some got a call to find out if the spend was theirs.

Clearly those companies who are providing good service have understood it is people who are best at determining what to do, not computers. The bad guys put their rules into the computer systems and these rules also tell agents what to do when the hapless customers call, while the good guys have rules that pop the account to the agent and the agent decides what to do.

To put this in systems-speak: only people can absorb variety; putting rules into service flows will always fail.

HMRC creating failure demand

A reader alerted me to what he described as ‘vast failure demand’ being created by Her Majesty’s Revenue and Customs (HMRC). Apparently HMRC is sending out penalty notices to people who have done nothing wrong. It is so bad that one accountants’ web site discussion is questioning whether HMRC should pay for the waste (and grief) they are creating.

One is bound to wonder whether this is the result of their (command-and-control) ‘lean’ initiative (newsletters passim). One would expect so, for the initiative is based on standardising work, a sure way to create this kind of waste.

Despite all the ministerial rhetoric about service and choice the fact of the matter is we all have no choice other than to put up with lousy service from HMRC. Worse than that if a mistake is made we have no choice other than to become embroiled in their bureaucratic processes for sorting things out – and always in fear of them, for they have the power to issue penalties regardless of the rights or wrongs of doing so.

It’s like having the choice of which snake you fight and being empowered toprovoke it.

the DWP is next

Sources tell me the man responsible for ‘change’ (what are the other managers doing?) at the Department of Work and Pensions is getting interested in adopting the HMRC ‘lean’ initiative. We already know the DWP’s performance has worsened over the last two years because of their ‘factory’ initiative, as evidenced by the time it is taking to sort job benefits, which has to be done before local authorities can sort housing benefits.

If anyone knows who this man is (it will be a man) please alert him to the down-side of going ‘lean’ the HMRC way.

And who picks up the tab?

We have just started some work with the organisations that provide legal advice services all over the country. The first indications are that if tax and benefits worked properly (yes – HMRC and the DWP) a vast volume of failure demand would be removed from the legal advice centres.

The government’s ill-fated initiative to change legal advice services has been based on the need to cut the growing costs of the service. Clearly ministers are unaware of the costs being created by the way HMRC and the DWP work.

Maybe someone should tell Gordon Brown.

How do I differ from other lean thinkers?

I received the following e-mail from a student in South Africa:

‘Dear Sir, I am an MBA student at Rhodes University in Grahamstown, South Africa. I am fascinated by concept of lean production as applied by Toyota and popularised by Womack and Jones. I subscribe to Lean thinker’s corner and listen to webcasts on lean. I am thinking of doing my MBA thesis on the application of lean production concepts in a service environment. I have downloaded and bought articles from your website. Although I found them interesting they left me confused. They seem to contradict what Womack and Jones call principles of lean, i.e.: Define value from the standpoint of the customer; identify value stream to deliver value to the customer, while eliminating all non value adding steps; make remaining steps flow, based on pull from the customer; in search of

They way I understand the point from Vanguard is that services are different from manufacturing, in that they are intangible, production and consumption happen at the same time, there is far more variety. The central problem is therefore how to absorb variety in services. Your point is also that one has to differentiate between two types of demand which is Value and Failure demand.

Can you help clarify my thoughts as to how you differ from other lean thinkers, especially Womack and Jones?’

I replied:

‘Thank you for your mail. I understand why you are confused and I shall try to help. Womack and Jones wrote a very important book (The Machine that Changed the World) and the success of that book led them to write a second which attempted to ‘codify’ ‘lean’ (in fact they called it ‘lean’ in the first book, it was not called anything by Ohno, for he saw the dangers of having a label).

Ohno insisted we should never codify method (write it as a set of instructions or tools) for it is thinking that is the key. My work began with the thinking problem, which is why I emphasise comparisons between command-and-control and systems thinking and I have also developed methods for helping managers change their thinking (it is a hard thing to do).

As you have understood, service differs in important ways from manufacturing. Identifying value and failure demand is only the start; you have many things to do to design the system against demand.

So, in essence, my work is concerned with how to change the system, Womack and Jones offer no challenge to what I call ‘command-and-control’ management thinking. My view is the use of tools in organisations produces results but these are trivial compared to the results you get when you change the system. Worse, by using tools in the same way as they are used in manufacturing, you can actually make things worse (see ‘Watch out for the tool heads’ in the articles section of the web site).’

It is worth repeating that HMRC’s performance is the result of a ‘command-and-control’ lean tools initiative and the DWP’s recent changes to front- and back-office factories is a classic command-and-control intervention. The former is supported by Jones; speaking on the radio, commenting on the fact that people were so unhappy they are taking industrial action, he said ‘people take time to get used to it’. Very sad. I hope they never get used to it and continue to fight it. I think Ohno must be turning in his grave.

Doomed to succeed

People in a police force we are working with are using this phrase. ‘Doomed to succeed’ means whatever the outcome of a government-inspired initiative, there is no option but for it to be deemed to be a success. ‘Looking good’ means doing as you are told, regardless of the true consequences.

We have seen this all over the public sector. A recent example is ‘choice-based lettings’, something ministers are very keen on as it includes the work ‘choice’ (they think ‘choice’ is a lever for improvement). Government representatives are shelling out large amounts of cash for housing organisations to adopt choice-based lettings. One of our clients has learned (through check and re-design of lettings) that the government scheme is flawed: it creates massive waste and fails to serve those who need housing. So they gave their money back and announced they won’t be following the choice-based lettings route.

The consequence was a visit from government heavies. I call them heavies because the meeting amounted to no more than bullying. There was no attempt to learn how the client’s solution to lettings was better for customers and more efficient, despite being told the solution had saved millions and was better for customers. Instead the heavies were pre-occupied with how to make these people do as they were told. Telling them that choice-based lettings will become mandatory by 2010 did not work; telling them that the Prime Minister’s office took a keen interest in choice-base lettings didn’t do it either.

The client’s position was firmly based in knowledge. Something the heavies lacked. But I expect they’ll be back, for their goal-sheet probably has the requirement to foist this nonsense on everybody regardless. I guess choice-based lettings is doomed to succeed.

Not if I can help it. If you are working in housing and you want to know why choice-based-lettings is the wrong thing to do, please register your interest with Deena Pickard: Maybe we’ll put on an event to help people understand what is wrong with the government initiative and what to do for the better.

Why Kaizen Blitz gets on my…

A Scottish government initiative that needs the brakes putting on is Kaizen Blitz. Fuelled by a Scottish Executive Report extolling the virtues of Kaizen Blitz the Scottish public sector is taking an active interest. We now we see examples of Kaizen Blitz projects winning awards.

I want people in Scotland to re-consider. That Kaizen Blitz can produce improvements is not in doubt, but my position is these improvements pale into insignificance when one knows what can be achieved by taking the Systems Approach.

Both Kaizen Blitz and the Systems Approach claim the Toyota Production System (TPS) as their inspiration. My view is that following the secrets of the TPS requires a change in thinking – it is a change the system thing, not a ‘tools’ thing.

So I am putting on a special event in Scotland, on July 3rd (morning). This unique event will help people in Scotland make up their own mind. The event will feature how both Kaizen Blitz and the Systems Approach were applied to the same service. See the differences in deciding the problem, analysing it, determining what to do and – of greatest importance – the results.

Price: ONLY £95 (plus VAT). Attendance is restricted to public sector people only. Would KB practitioners please refrain from telling me ‘it’s OK if you do it right’.

Seddon in the Antipodes

I shall be presenting a special two-day event in Australia (June 18th and 19th) and New Zealand (June 21st and 22nd).

The Quality Renaissance

On June 29th, I shall be making a key-note presentation for the Chartered Quality Institute in London. My title: The Quality Renaissance: innovation, care and management thinking.

I have no doubt we are in a renaissance. Twenty years ago we (in Vanguard) used to say we are providing what the market needs, not what it wants. Things have changed. In this presentation I shall chart how a psychologist became engaged with the quality movement (in the days of ISO 9000 and quality circles) and found it lacking. I shall explain the importance of Deming’s work in emphasizing that we invented our system of management and it is up to us to change it.

I shall illustrate how those who have changed their system of management have achieved profound improvements, are innovative in ways they would never have considered and have organisations where people are engaged; the people feel cared for and the customers feel cared for.

I shall also show that while the ideas are easy to understand it requires hard work to put them into practice. Significant barriers are found by simply going through the process of changing thinking, but they are insignificant compared to the barriers created by having to deal with others for whom the ideas are foreign and a threat.

If there is someone in your organisation who needs a nudge towards a different way of thinking, this is the event for them.

Watch out for the pretenders

I am dismayed to find more examples of people pretending they can ‘do systems thinking’. I guess it is the natural consequence of creating something that works, it creates a market. It takes us at least a year to train a competent systems thinking interventionist. Many of the pretenders have seen the power of our methods (they are often involved in these organisations for other purposes) and having seen it they think they can do it. Having a go on your own we have no problem with; pretending you can do it for others is just that – pretending. The pretenders take some of our most easily understood ideas and then intervene with them in a command-and-control way. They know no better.