Hello, welcome to my class on improving service quality. Service quality is still one of the most important differentiators of many service organizations. So with this class, we look at some key tools you can use either as a process owner or as someone who wants to get into redesigning customer service. processes.
So let's look at what tools you can use. So the first really is let's talk a bit about customer service process redesign. So why do you need this in the first place?
Were our processes so poor? And of course what happens is that customer needs change. We have processes that work beautifully but then we add functionality. We add new features, technology changes.
So we add apps, we add smart self-service technology, we're adding in chatbots and AI. So a process that was working beautifully before suddenly creaks and cracks and it is time to do something about it. Here are a few words of wisdom which I think you can use to sort of guide your thinking.
And the first one is speed is greatest when value-add time approaches elapsed time. So we call this end-to-end processing. And we use this a lot in intelligent automation from when the customer initiates to when the customer gets the final output.
Now, things like Six Sigma, they're as much as a culture, then they're also a performance standard. If you start thinking Six Sigma. It really governs a lot of the behavior and a lot of actions you take.
So it's part of the culture. Now, non-value-adding work steps are the enemy. And here is often a lot of compliance and policy and internal things, especially in larger organizations.
So the question is, how can you follow and adhere to compliance without having all these non-value-adding work stops? work steps here and the overall focus really is on easy to do business with most services are not really about giving you a wow experience right i mean when you buy a ticket when you cash money when you make a reservation it's never about a wow experience it is to get things done as easy and as fast and as convenient as possible Only sometimes cause service. These are what true experience is when you go to a nice resort holiday and so on. That's when we, of course, focus on the experience, but everything before and after, easy to do business is the name of the game. Now, another thing is sort of people are crucial for getting top quality output and so are processes, right?
So we have to look at both. But if you compare, you look at average people in an excellent process, easily outperform excellent people in an average process. So it's really about getting your processes right.
And that's what we focus on in this session here. Now, what are the possible outcomes of good people and poor processes? So you have good people, but you have poor processes. And you can see here.
People leave you, they're frustrated, it's no fun working for you, so people resign. People who stay, I mean, the process makes people stupid. They just follow this because they're beaten into following this.
And I mean, it doesn't add value for staff, doesn't add value for customers, it's terrible. And the last one, the desired outcome really is people change processes through cross-functional discipline, which is the really truly desired outcome. So what you want is that your people come together and redesign these customer service processes.
And this at the moment is quite exciting because we have so much in technology and easy coding and RPAs and chatbots that actually your people can do a lot of these things by themselves and within support of the company, of course. But what we want is people come together from your IT, from your finance, from your customer service, from your marketing and really look at how can these processes be changed. This is really necessary because one thing we notice is that costs are like fingernails.
They tend to grow and they need to be periodically clipped. And process redesign therefore really focuses also not just on service quality, customer satisfaction, but at the same time on productivity. So here are the four key metrics you should focus on when you redesign processes. I mean, the first one is you want to cut fail points. You want to cut defects in processes.
And there's a beautiful management tool from Japan called Poka Yoki's. And this basically means you want to fail safe a process. And each time you yourself think, oh, I have to remember this. I can't forget this.
That means you could poka-yoki this. How do you build a process, build a prompt, do something that you cannot forget this? So this is sort of the philosophy.
You don't allow failures to happen. You design processes in a way that people are prompted to avoid this. And one of the famous Poka-Yoki's is actually an aircraft.
I think it was Boeing that did this. You will never be in an aircraft toilet with the door unlocked. And why?
Because the light in the toilet doesn't go on until you lock the door. So that's a typical Poka-Yoki where you say, hey, with this tool, you will never have this problem because it is sort of designed out of the process. And There are many of such examples.
My own personal poker yogis are, if I think I shouldn't forget this, I just send myself, like in a call center, I send myself a ticket to my email and until this email is, until this ticket is done, I don't delete it. So I mean, I'm prompting myself this way. So it's defects. Then cycle time is really end-to-end from customer request to service completion.
So that should be as short as possible and it shouldn't have Ideally, you should have as little as possible elapsed in active time on it. Then, of course, productivity, cost, labor productivity should be improved. So virtually no companies can say, I spend more money on quality. It's always about how do you get a quantum leap in quality improvement while at the same time you increase productivity and cut costs.
And the last objective here or key KPI for a process redesign exercise is really service quality customer satisfaction. And what you can see is of these four KPIs here, defect cycle time and satisfaction tend to be naturally correlated. If you cut defects, if you cut circle time, then customers will be happy. Productivity and satisfaction Most of the time is also aligned. I mean, if you improve a process, automate it more, take out touch points and all these other things, customers will be happier.
But sometimes productivity could be counter to such things like a personal touch and personalization. And there's a trade-off sometimes. But in general, these four tools move in tandem and we should manage them together. Now a key component of service process redesign is blueprinting or you can call it mapping, service mapping or customer journey design.
So there are many terms in this here but what it basically does it systematically looks at the customer experience and writes it down in some sort of blueprint or chart and you can see here there are a number of things. The first is The point three is identify principal customer actions. That's usually how we start.
So what are the steps a customer goes through from looking you up on the website or downloading an app all the way to payment and exiting the service? So what are the steps? That's the first thing we look at. And the next is, so given the customer actions here, what are the front stage actions by you? Either it could be IT, could be a robot, or could be a business.
So what are the front stage be people right so so what are customers interacting with and what are the steps that are happening there that's what we call the line of interaction and then we have another line the line of visibility is what does the customer see right in a bank branch they don't just see the front line but they see so much more and so we need this because we want to see what is it um customers use to judge quality, to get an impression of what your service actually does for them. Now, how do you design such a blueprint? So there are a number of steps here, and it starts really with identifying key processes. You don't want to do this for every process. You only do it for important processes.
And then you want to also understand, so who am I running this process for? So who are the customer segments? And often we develop personas here.
So is this a young tech savvy executive or is it an old granny, right? So who is this customer here that goes through the process? And we then try to picture that process from the customer perspective. And you can see on this photo, you can see this is a typical or blueprint design where we use ticket notes on a big whiteboard and often as we cut it across walls even with arrows and decision trees and other things on what happens where and why and so on.
Right so you can you get you get the picture so this is how you design a a sort of approach redesigning a customer service blueprint and what it looks like when it's done you can see an example here is a very simple hotel overnight stay. You have the physical evidence, so what does the customer see? You have the customer actions, you have the line of interaction, you have the employee actions, and then you have what happens in the backstage and processes here. So interesting in this chart, if you look, is the big F stand for potential fail points. So something can go wrong here and the C then means there should be a contingency.
plan. So let's say at check-in here, if you have overbooked and you have to walk a guest, you don't want your frontline staff each time this happens to think on their feet. So there's a pre-scripted routine on what you do, what you say to the customer, how do you find another hotel, how do you send the customer to this hotel and so on. And the W in the red triangles means here is the danger of excessive weights. yeah so too much waiting a check-in for example right so this is if you do it as is a flowchart here and then you can of course plan what should it look like after the redesign but before we go there let's talk a bit about a few analytical tools you can use many of them adapted from tqm on when you look at what's wrong with the process And the first one is very powerful.
It's just Pareto charts. So what are the three or four failures we have that cause 80% of all the failures we have, right? So which are the vital few, if you will, we should ensure that we design them out of our process.
So that understands what's the important process or important steps within the process. that need attention. Then after we understand what's important, we can look at what's the cause of important failures.
So first we look at what are the important failures that happen a lot. Now let's look at why are they occurring. And you can look at here, this is one delayed departure, could be in an airline context, a fail point.
And then you look why, and what we use very often is cause effect. diagram or fishbone diagram is also used in manufacturing. We just adapt this here to service.
You can see we have quite specifics of customer cost errors here. And so you can sort of throw all of these from your frequency count, you know what's wrong, and then you go, you dig deeper on for a specific fail point. What's wrong here?
What's causing this? So now we know the fail points, we know the causes of main fail points here. Now let's look at drilling down deeper so that we know delay is an issue. You can hear also say look does it happen in all units at the same time and this is here's departure delays of an airline and you can see the Midway hub, for example, has a lot of late passengers that cause aircraft delays.
And I mean, the... The fishbone diagram sort of identified late passengers as 53%. Of course, now you can go down deeper again. You can ask, why do I have 53% late passengers in the Midway hub? And New York is only 23%, Washington National 33%.
So you understand the causes of delays by unit. And you can now drill deeper. So these 53% in the hub, how many late passengers are due to late arrivals for interconnecting flights? How many are due to passengers getting lost in duty free? Or how many are due because our check-in staff still admitted passengers, although it was too close to gate closer, and then the aircraft had to wait for these passengers, right?
So you can see. These are very simple tools, but very powerful. They really point you towards where things go wrong. A very simple example here.
This was a global bank that redesigned an important process that wasn't going well. And you can see here, elapsed time was 54 hours. So activity time for 54 hours cut across three days.
So a major, major process. And then what they did is they had a redesigned team, like a Six Sigma team that redesigned this process. And they managed to cut this to a bit under eight hours after the redesign. And the elapsed time was a bit more than a day.
And then they handed over to the process owner. So they fine-tuned this process further. And you could see that the incremental improvements after the implementation still could cut the process by almost half to only four hours. So can you imagine from pre-redesign 54 hours now with a bit of automation and change in work practices and so on and so forth it was cut to only four hours and customers could get a same day. reply in this market.
This was the only bank that achieved that and customers loved it and they really became market leader because of this. And you can see here, how did employees look at this? So they said, oh, I can leave the office earlier. Paid overtime went down.
Job was being enriched because empowered staff had less hands off. They did a complete job now. Job content was redesigned and skill gaps got closed.
So this is a very nice example of a process redesign. It's quite typical. Usually customers love it, employees love it, and you can cut a lot of costs at the same time. Now the question, of course, is what do I know what to shoot for?
So I understand my four criteria here from cycle time to failures to satisfaction to productivity and costs, right? But what is a good objective before I start on redesigning here? So how do I know?
And a good tool for this is benchmarking. So you can see here, now what is so nice today is that we have... a lot of new technologies that really truly allow us to revolutionize a lot of the information type processes here.
So for process redesign, we have RPA, we have machine learning, we have natural language processing, and you name it. And they really allow us to dramatically improve service quality, improve the employee experience. and cut cost.
So let me give you a very simple example here related to managing credit card fraud. This is the typical process here, labor intensive, inconvenient for customers, but it's all information processing here. And let me just show you how a bank redesigned this here. So you can see before the transformation, low satisfaction, average happiness of staff and the process too much manual, too high cost and so on. Then this bank improved it with machine learning and as an interim step and the final step was a fully automated process, which now allows bank employees to cut a lot of the manual work and for customers it is a much safer process, a much more convenient process.
So if you like you can stop the video here and read the process but you can see it's really a wow and I think this is really the most exciting that's happening in the service industry right now is that we can with intelligent automation have quantum leaps and improvement of experiences. and productivity here. Now, how do I know what to benchmark on? How do I know what to shoot for? And I mean, benchmarking really is the key tool here.
And if you want to redesign processes, you can look at your own organization. What is best practices? If you're in a global company, so what does America do?
What does Europe do? What does Asia do? Is there something you can learn? How good are they?
If you want to go further, you can look at what are my best competitors doing? What is industry practice? And you want to go even further, you can look at what is best practice for a stop. So I once worked on redesigning call center processes.
So we looked inside the organization, their customers, they had 13 contact centers around the world. We looked at the capabilities of each of these center. And then we looked at their key competitors, what they were doing. And then we looked at best practice. At that time, we looked at Amex.
This was one of the best call centers we could benchmark to. So, you know, I mean, what do I want to achieve? Do I want to really be best in class?
Then I look at best practice for a stop or best in industry or I just want to catch up in the organization. You can see there are different costs attached to these three levels. Following best practices in your own organization, you just copy what's already there.
And that should be reasonably easy to do. So benchmarking is key for sort of deciding what you want to focus on and how do these KPIs or what they call standards and targets move over time and you can see this here. So what you have is you have a current standard, you have a current performance standard and you redesign and you can see in period one you jump up to a new standard.
which then is constant for some time until you redesign and it jumps up again. But what you see is this long line here, the top line of customer experiences, customer expectations. So they increase all the time. Why? Technology moves, competitors move, industry moves.
So customers expect more over time. So you can see it is important when you redesign a new process that your new standards are higher than customer expectations because... Otherwise, by the time this process works well and is sort of fine-tuned, you're again behind the curve.
So that is the standards here, the performance standards. But then you have sort of targets or levels of compliance to these standards. So the redesign to new standards is a step function. That means you have a process redesign team, a technology team come in and help you to achieve this new standard.
But then... you need the compliance and the new process typically drops. Old processes fine-tuned, we have done this a long time, we're very good at it, but the new process we drop. So then what you do is typically the job of the process owner. So that owner with his or her team will then work, okay, we have this standard, we have this technology, let's fine-tune, fine-tune, fine-tune and over time move up compliance of the standard.
And you will see by the time you're close to 100% percent standards are outdated and it's time to redesign again. Now let me summarize a bit on the nine steps here on managing and improving service quality. And I mean, the first one is really you start with identifying the priority processes you want to redesign. So what is your most hated process?
What do your customers like? the least. So that's and it's an important process. So you redesign them and how do you know that?
I mean you can look at frequency counts of complaints, social media, or you can ask your front line. So there are many things you can identify what are the key processes that read need to be redesigned and it also what plays in here is your strategic direction right so what do you want to what's your overall customer service strategy here that's the first step the next step is for these priority targets you should set, so for these priority processes, you should set targets for satisfaction, defect cycle time and productivity improvements. So how do you know this? We just discussed, I mean, typically you do benchmarking here. You look at best practices, you look at your strategy to set those.
Depends also how much intelligent automation you want to bring in. So these are your targets. Then for those processes and targets you have to identify. So what are the key elements of quality your customers look at?
So what's really important for them? And here what we do is the flow charting, blueprinting to identify what are the touch points, what are the tangible cues for quality perceptions, where's the line of visibility. You can do some focus groups here.
You do a complaint, compliment analysis and these kinds of things. So that's the identifying the key elements here. Then you measure performance. So this is a satisfaction surveys, process measures and net promoter score and these kinds of things. And then you look at, okay, where are the shortfalls?
false. So where are we really way off customer expectations? Again, you can use your frequency counts and your flow charts to identify this. Next is why. So what's the root cause analysis?
So you can use TQM tools here, like the Pareto frequency count, Pareto chart, fishbone diagram. So there are lots of TQM tools you can use to identify root causes and key reasons here. Next is... Improve processes.
And this is why a major service process redesign, where you use your poka-yokis to design fade points out of the plan, to develop contingency or service recovery for those fade points that cannot be designed out of the process. Okay, so this is a major exercise to redesign here. The next one is air control and continuously fine-tune and further improve the process. This is typically done by the process.
owner and his or her team yeah this is uh they they got this new process and new technology and now they have to make sure it works better and better over time and the last one is start again it's an it's a culture it's an ongoing process you will always have processes that need redesigning and this will actually even accelerate now because technology is moving So fast. So who knows in two to three years time, whether we accept anywhere that we have to remember a password, bring a card along or something. Maybe we all expect that everything is biometric. So technology moves fast. Now, let me stop here and you can look at now what are your key takeaways from this session?
We discussed a number of tools, service process redesign, blueprinting, TQM tools, benchmarking the nine steps. So what did you learn? What are the key takeaways? And think a bit individually, what is the most important takeaway for you from this session? What's the biggest challenge you see for your company?
And finally, also, what is the biggest opportunity you see for your company?