After years of Six Sigma and Lean, I was stumped. All the effort to improve contact centers never seemed to materialize. I had already spent thousands learning to kaizen and analyze data. What could possibly be missing? The answer is everything.
I came across a different measure that shed light on the error of my ways – a "aha" moment if you will. The measure was simply called failure demand. It was defined by John Seddon as a failure to do something or do something right for a customer.
This measure was a revelation to me. Customer demand in contacts to a service organization can be either value or failure. What this means - quite simply – is that if you get too many failure demands from customers you are increasing costs. Failure demand is systemic to the contact center/system. Poor work design born from management assumptions leads to failure demand being as high as 90% in some service organizations (typically an organization will have between 40 – 75% in my experience).
At the time of this discovery I was working with a financial institution and went to listen to 100 (plus) phone calls. This took some time, but when I got done I discovered over 70% failure demand coming into this bank. I was floored! All the scripting, standardizing wrapped with IT had resulted in 70% failure demand.
Upon further review I discovered that the scripting and standardization was the cause of the failure demand. This, of course, is the bad news. I had discovered that I was unconsciously incompetent . . . now, at least, I was consciously incompetent. This brought me to new problems to work on.
With the cost of a phone call being $1 – 2 per minute in many contact centers, the elimination of failure demand in number of calls can be financially rewarding if you have the right mindset. What would be the benefit to your organization to eliminate 50% of the failure demand in your organization? Thousands of dollars? Hundreds of thousands of dollars? Millions? You do the math.
How do you measure failure demand?
Start by listening to calls and being honest with yourself. Rationalizing away the "reasons" for failure demand is just fooling yourself. Ask the question, "Did we fail to do something or do something right for the customer?" Did this create the call from the customer? If the answer is yes, it most assuredly is failure demand.
Adding the number of failure demand calls up and dividing the number of calls you listened to will give you a percentage of failure demand. If your percentage is less than 30%, you may want to listen again as I have yet to find an organization with less than 30%.
The use of failure demand is a start to looking at your organization differently. The problems that create the failure demand is the rest of the journey.