Management 

Jobs go east, service goes west 
Cutting costs on dealing with customers is the wrong direction 
Sunday February 15, 2004
The Observer 
An electrician came to change the meter two weeks ago. Competent and sensible, he did the job in about two minutes. As he drank his tea he told me that someone would be back to read the meter next week. Why didn't he do it? 'Too easy,' he grimaced. 'The new computer system won't accept meter readings it hasn't generated requests for.' 
He added that he was disinclined to do it anyway. As one of the few properly trained technicians left in the firm - most are now subcontractors - he got all the hard jobs (changing a meter can take hours if it is inconveniently sited) but was expected to do, and be paid for, the same number of assignments in a day as the subcontractors. 'Why', he asked, 'should I help anyone else make their numbers at my expense?' 
The next day I had to ring my bank with a simple query. My branch is in Norfolk, and up to a few years ago I would have talked to someone whose voice I recognised and who knew my account. He or she would have answered the question straight off, we'd have mentioned the weather and the relationship would have been reasserted. 
This time, after penetrating the IVR (interactive voice response) picket line, I got someone in a service centre in the Far East. She was polite and businesslike. We waited while she pulled up my details and the prompts to answer my question. The query took longer than it would have done before - but, worse, it was a computer-driven dialogue that I could have had with any bank, or any organisation, anywhere. It was a transaction, not a relationship. 
What do these episodes have in common? One thing is a striking gap between rhetoric and reality. The rhetoric in each case is serving the customer, the reality is worsening service. Another is the baleful effect of much modern IT, where the computer is the master rather than the servant of the customer and the people doing the work. 
And behind that is a system producing poor service because that is what it is designed to do. It is working to the edicts of top managers - what those furthest removed from customers think that customers want - not those of the customers themselves. 
It is the considerable virtue of John Seddon's new book, Freedom from Command and Control (Vanguard Education), that it charts with rigour and precision exactly how this infernal machine fits together to work as perversely as it does. 
Seddon has long been a scourge of the conventional call centre industry, and he uses many telling examples (good and bad) in the book. But his field is wider. As the title suggests, this is a full assault on the top-down, function-driven management philosophies that still govern almost all western companies, and how they are damaging service firms. 
So here is a lucid account of how customers have been duped into mistaking IT features ('solutions') for benefits, often leading to worse service and higher costs. Here also is an explanation of why so many off-the-shelf management aids at best have little effect, or lead companies seriously astray. 
ISO 9000 (a particular bugbear), the 'excellence model', Investors in People, Charter Mark, the balanced scorecard, IT-based knowledge management, and customer relationship management all get it in the neck for failing to disturb the top-down, mass production thinking that service companies adopted wholesale from manufacturing - just as manufacturing firms are moving on. 
Here in particular is an eloquent discussion of that most treacherous of management subjects: measurement. Seddon shows how the conventional apparatus of measurement - targets, standards, service levels, activity measures and budget - focuses almost all managers' attention on individual performance, whereas 95 per cent of performance variation is due to the system over which the individual has no control. Where managers are mostly remote from the work, Seddon notes dryly that paying attention to people can be extremely demoralising for those paid attention to. 
Service is harder than manufacturing because demand is more varied - the consumer helps to shape it. The conventional approach to this is to try to constrain variety by forcing it through a computer-regulated filter into a mass production factory allowing economies of scale. 
Wrong way round, says Seddon. People are good at handling variety; computers aren't. 'The assumption in the command-and-control design is that freedom must be subordinated to efficiency; the worker must be kept under control. In fact, efficiencies only come from freedom - the people who do the work must be able to decide the best way to handle any particular demand to maximise efficiency.' 
Instead of being controlled by measures, people need measures and methods that allow them to control and improve the work. In this way people, and only people, can absorb variety. And the results can be spectacular: capacity rises as waste is removed. Cost falls. Better service is cheaper; not dearer. 
This applies everywhere, but particularly to the public sector. Throwing resources at a wasteful system just compounds the inefficiency. Paradoxically, for all the privatisation and experiments with private-sector delivery, the real problem with the UK public sector is that it is under as much central command and control as it was when nationalised. As a result, despite all the inspection, auditing and targets - in fact because of it - 'every public service ... shows significant scope for improvement without any additional resources. The services are replete with waste; it is designed in. Public sector managers need help in designing it out.' 
Seddon quotes Deming: 'Without theory, experience has no meaning. Without theory, one has no questions to ask. Hence, without theory, there is no learning.' 
This book is what the pioneer systems thinker might have written about improving services: practical, rigorous, experience distilled through theory. If the public sector took it seriously it would have more effect on delivery than all the targets put together, and if the private sector adopted it there might be fewer call centre jobs, but they wouldn't be heading east. 
Measures that fall short 
There are three tests of whether the measuring stick you are using to assess performance is a good one: 
· Does it help in understanding and improving performance? 
· Does it relate to its purpose, as established by the customer? 
· Is it integrated with work (that is, in the hands of those who do it)? 
Many conventional activity-based measures - response times, service levels - fail at least one of these tests, and often all three. As applied to the public sector, Seddon argues that all targets should be removed. Instead, public-sector organisations should be required to show that they have measures that help them understand and improve performance, and to what effect. 
Using such measures, both public and private sector organisations have made startling improvements: cutting response times from weeks to days, multiplying productivity and slashing costs by eliminating useless activity. Ironically, such achievements make a mockery of official targets, which in many cases prevent continuing improvement.