This book has the subtitle “A better way to make the work work”. It
describes an way of improving performance of service-based
organisations. Seddon’s approach is based on the work performed by
Taiichi Ohno at Toyota in the 1950s.
Seddon proposes that his
methodology, or similar, would help improve the performance of some the
UK’s poorly-performing public-sector organisations.
Background – Ohno’s Legacy
Ohno studied American ideas of manufacturing (e.g. Henry Ford’s) and applied them in his work at Toyota. He based his production lines on customer demand, rather than supplier push. He was able to reduce inventory held and speed-up production time by reducing the amount of non-value-added (“waste”) work performed. This approach, also labelled “Just in Time”, has recently been re-badged as “Lean”, has re-ignited interest in Ohno’s work. These approaches have yielded good results in manufacturing industries but have proved difficult to apply in service-based industries.
Seddon’s book revisits Ohno’s work and proposes modifications that focus on the solely on the improvement of service organisations.
Conventional Service Organisations
Seddon describes conventional service organisations as having the following characteristics:
- “Command-and-control” structures, i.e. having measures and roles are aligned solely with corporate targets (such as revenue) rather than being targeted at customer service.
- The setting of targets for the organisation’s staff that are mis-aligned with the customers’ demand. For example, a call-centre target to maximise the number of calls per hour may give management the impression of good service. However, from a customer’s point of view, a better measure would be to maximise the number of occasions where a problem was resolved to the customer’s satisfaction in one call.
- A failure to examine the type of customer demand. Seddon gives an example of a call centre that was unaware that of its total calls, 40% were from customers querying their bill. Seddon identifies this as a “failure” demand, i.e. a demand resulting from a failure in the organisation’s processes. When the call centre amended its billing process, the number of these “failure” calls dramatically reduced.
Areas for Improvement
Seddon revisits Ohno’s work and identifies that service-based organisations should be treated differently from manufacturing-based organisations:
- The idea of “inventory” is different in a service-based organisation.
- Service is not “made” by physical means.
- Service occurs at customer transaction points.
- The service agent (e.g. the call centre operator) and the customer are jointly involved in the service delivery.
- It is the customer that determines the “value” of the transaction.
Seddon offers the following approach to improve the performance of service-based organisations:
- To understand:
- Customer demand, in the customer’s terms.
- The difference between “failure” demand and “value” demand.
- The predictability of demand.
- Once the customer demand is understood in terms above, then the organisation’s services can be re-designed accordingly
- Change the organisation (mindset, measures and roles) to remove “command-and-control” thinking and replace them with those that allow the organisation to more readily deal with varying customer demand.
Positioning with other Techniques
Seddon has criticisms of other “quality-based” tools such as
ISO9000, TQM, and Six Sigma, describing these as supporting the
dysfunctional aspects of organisations, rather than supporting a
holistic approach to improving customer service.
Seddon’s message is to understand the problem within its context, rather than blindly applying a set of tools.
Summary
Seddon’s book, while influenced by “Lean” thinking, draws directly on the ideas from Toyota to offer solid advice on how to improve service-based organisations – from a customers’ perspective. It is an opinionated, thought-provoking read. In addition, it is an entertaining polemic on established ways of thinking.
Additional Thoughts
There are interesting links to agile software development techniques, such as XP and Scrum, which aim to reduce “waste” in the process of software development. A future Agilier article will aim to trace these parallels.
We have extensive experience in investigating and aligning an organisation’s business processes with its strategic objectives. Please get in touch at info@agilier.com for a no-obligation meeting to discuss matters further.
Further Reading
Two books from Womack et al – “The Machine That Changed the World” and “Lean Thinking”. These books re-invigorated Ohno’s ideas and re-badged them as “Lean”.