Deming Not DiMaggio

Call Center quality is abysmal.  And it has been for the entire forty years the call center industry has been in existence.  We can make cars with near perfect quality, but after 40 years, call center leaders are high-fiving each other up and down the hallway if call agents do what they are supposed to do 80% of the time.

If this is news to you, you have not had to call for tech support recently.  If you need some fresh perspectives, read the comments to this article published in the NYTimes November 26, 2011.

There are a stack of reasons why call center quality is so bad.  Pick the top call driver, ask what the Required Call Components (RCCs) are…what the agents need to do in their systems and what they need to say to the customers…and ask what % of time the RCCs are met just on that one top call driver.  (RCCs are as essential to call center quality as specs are to manufacturing quality.)

Here is what you are likely to get back.  The RCCs will not have been clearly defined or not agreed on by SMEs, training, monitoring, agents and most important, customers. On the outside chance that the RCCs are defined, you are more likely to find flying pigs than a center tracking RCC performance by call type.  As for seeing the data on run or control charts, they won’t even know what those terms mean, let alone have them.

Even if a center had all that data, and you produced a Pareto chart on the reasons why agents do not properly execute the RCCs, you would find the same reasons you find behind all human errors:  1) the agents weren’t completely clear on the requirements, 2) they were distracted by something else and/or just forgot, or 3) they didn’t want to (e.g., collectors often skip the required mini-Miranda warnings because they have learned they are more likely to collect if they don’t scare the debtor off at the top of the call…sad, I know).

Now at this point, with RCCs being missed right and left on call after call, a center is likely to spend a lot of time and money on a host of countermeasures, in a kind of “spray and pray” approach.  Typical shotgun strategies include posting signs (as seen in the photo in this article) reminding the agents what to do, putting an incentive plan in place, pulling the agents off the phone for training or coaching.  You also might find them trying to make the work place more enjoyable by hanging yellow smiley balloons or getting the supervisors to cook hot dogs for the agents (I am not kidding about either of these approaches.  And the centers that did these things honestly felt like this was an effective way to improve quality).

On the other hand, call center leaders could do what Manufacturing leaders do:  look for automation opportunities that can error-proof the process so it’s easy for the agents to do what they are supposed to and impossible to blow it even if they tried.  (Click here to read more about types of agent-assisted automation and results.)

Error-proofing or spray and pray, which do you think would be a better strategy?  Sadly, the number one call center quality improvement strategy is hope. They send an email and they hope the agents read it and remember to do it. They train and they hope. They coach and they hope. They come up with a fancy incentive comp system and they hope.  They cook hot dogs and they hope.  By choosing hope over error-proofing, is it any wonder call center experiences are a favorite whipping boy for late-night comedians?

Some of you are probably howling that I don’t know what I am talking about.  “Call centers don’t rely on hope!  They use scripts to make sure the call is right.”  Fair enough.  Scripts are better than a sharp stick in the eye, but this isn’t the stuff of Six Sigma quality.

There are dozens of failure paths that lead to the script not being executed as designed:

1. the agents have trouble reading legalese, especially in a second language, so don’t read it correctly or skip it
2. the agents memorize the script and then don’t even notice when things change.
3. the agents are texting or surfing, and skip it
4. the agents feel reading the script hurts their performance (think sales or collections where disclosures can result in the customer backing out)
5. the agents blast through the disclosures to reduce their handle time…if they are speaking in a second language, the accent and speed can make the disclosures almost unintelligible.

You could, of course, just fire the bottom x% of agents that weren’t doing what you wanted them to. But there are at least two problems with this. First, how do you find the agents you want to fire? You have to hire a bunch of monitors (read as, inspectors…didn’t manufacturing get rid of the “end of the line” inspectors?) and they have to monitor lots of calls to get a large enough sample for each agent.

Second, focusing on and/or firing the bottom 20% is rather un-Deming-like, no? Ed Deming’s approach to quality is what transformed Japanese manufacturing from a backwater to the juggernaut that it is today.  Central to his approach was the notion that the system is the problem, not the individual workers operating in that system.  The bottom 20%, at any given time, are part of the normal variation of that system’s performance.  (As an aside, a consultant could make a lot of money taking call center leaders through Deming’s Red Bead experiment, showing how counterproductive, demoralizing, and futile it is to focus on the bottom x%.)

Speaking of Deming, I don’t know if there is a required reading list for call center leaders, but if there is one, I do know that Deming’s Out of the Crisis is not on that list.  What he wrote three decades ago in that book about the Quality crisis in American manufacturing and the way out of the wilderness is as true of and applicable to Call Centers today as it was to the automotive industry in the early 80s.  Specs.  Performance tracked over time against those specs.  Make changes to the “System” (error-proofing with automation).  Lather.  Rinse.  Repeat.  This is Quality 101.

In 1968, Simon and Garfunkel wrote Mrs. Robinson, where they captured the longing for guidance of a nation in the throes of a controversial war and social unrest with he lyrics, “Where have you gone Joe DiMaggio, our nation turns its lonely eyes to you.”

The call center industry is in the throes of a crisis too, one they have been in for decades that is showing no signs of appreciable improvement and one largely of their own making.  The call center nation does not need to look towards a towering role model of kindness, grace, and dignity like Joe DiMaggio. They need to turn their eyes to the writings of Ed Deming, a results-oriented pragmatist.  Joe DiMaggio entertained the world.  Ed Deming changed it.

Wag the Dog: Why are We Letting Agent Traits Have So Much Influence on Output Metrics?

I stumbled on a piece of research about how agent traits affect output measures of performance (When Conscientiousness Isn’t Enough: Emotional Exhaustion and Performance Among Call Center Customer Service Representatives).

Here is my high-level summary of the results of the study…if you use measures of conscientiousness to screen/hire, it will, in general, improve your center-wide quality scores.  However, when the agents start to get burned-out, (because of the fact that you hired agents that were more conscientious) your productivity will be even more sharply reduced. 

There are however broader implications from this study.  The paper highlights how agent conscientiousness and agent burnout affect performance.  Well, raw intelligence affects performance and degree of domain specific content knowledge affects performance and distractability affects performance and personality affects performance and "thickness of accent" affects performance and mood affects performance and motivation affects performance and on and on and on. 

Now of course there is nothing wrong with studying employee traits to find out the ones that have the biggest effect on performance and then using that information to design selection tests to try to raise the level of performance in your centers by raising the presence of that trait.  This approach has an unassailable track record of success (see Take the Guesswork Out of Hiring) and this approach has been the bread and butter of Industrial Psychology consulting firms large (see Personnel Decisions) and small (see All About Performance) for decades.

But the bigger question is this: why are call center leaders leaving their outputs (See:  What's an Acceptable Contact Center Error Rate?) at the mercy of so many variables they can’t control?  And the industry’s attempt to deal with the challenge…to attack the endless drivers of agent variation (motivation, knowledge, conscientiousness, mood, intelligence, etc) with one-off efforts...a new selection test here, a rah-rah team meeting there, free pizza and doughnuts, occasional coaching sessions...is a fool’s errand at best. (See:  Call Center Coaching Remains a Labor-in-Vain and Why Your Turnover Reduction Efforts are Not Working.)

Agent output metrics in the call center industry will be permanently hog-tied at an embarrassingly low level until we can figure out a cost effective way to reduce the effects of between-agent variation (See:  Fixing Between-agent Variation can Make all the Difference). Selection tests help reduce this variation, but they are not enough.  Standardizing large swaths of our agents’ process using agent-assisted automation is not only the most effective and cost-efficient approach, it is the only sane solution I have seen to date.

The Future of Call Center Outsourcing and the One Question that will Determine the Winners

I don't have a crystal ball, and I don't know who will be the largest and most wildly profitable Call Center outsourcer in the next five or ten years, but I do know the one question the winner will have answered to get there. Before I tell you, I want to start with a story that captures the current dismal state of the Call Center Outsourcing industry.

 

A Story: A friend of mine, Alan Madison, who used to run customer service for H&R Block, was outsourcing a huge chunk of call handling business. He conducted due diligence with some of the biggest brand names in the BPO industry. During each interview, he said:  "I have X million minutes of calls that I have been doing myself with these levels of performance metrics for AHT, C-Sat, Issue Resolution, etc." Then he asked a simple question, "If I give you this business, what are you going to do to make me (i.e., my metrics) better?"

 

While this is a completely reasonable question, can't you just see the salesperson fidgeting and staring down at his/her expensive shoes after it was asked? They were squirming because they had no answer. In fact, Alan told me each of these leading outsourcing firms - the best of the best - all gave the exact same answer: "We monitor and coach agents."

 

Monitor and coach agents? Huh? Alan monitored and coached his agents too. Were they saying that their monitoring and coaching procedures were better than Alan's? Were they trying to argue that their monitoring and coaching process was better than the other outsourcers?  With a straight face?

 

If you have outsourced any of your business, as I have in the past, you know that there is nothing that differentiates the top tier outsourcers from each other. Tear the cover off their presentations and you wouldn't be able to tell one from the other.  They all have broad geographic footprints. They all hire agents using assessments designed by industrial psychologists. They all have the latest and greatest technology. Moreover, they all think they can improve on the results the client is currently getting by monitoring and coaching agents better than the client can.  If you have read any other posts on this blog, you know what low regard monitoring and coaching as an improvement strategy for agent output metrics is held in.  (See Call Center Coaching Remains a Labor in Vain for just one example.)

 

An Example Outside of Call Centers and The Shape of Things to Come: Other industries are not so me-too. There are many companies that make cars, but no one makes cars with the efficiency and quality as Toyota (current quality problems notwithstanding). As good as Toyota is, they don't do it all by themselves. They rely heavily on outsourcers for automobile subcomponents who have achieved their own stunning levels of quality and productivity.  The performance of Toyota's suppliers is no accident. Toyota has completely changed the game for how manufacturers work with suppliers to ensure these kinds of results.

To better understand the dramatic shift that is coming, let me give you a little of the history on vendor-supplier relationships in manufacturing. As recently as thirty five or so years ago, manufacturing in the United States had a brass-knuckles approach to negotiating with suppliers. They would give pieces of the business to multiple vendors and pit them against each other to get the lowest possible price. They had contracts that spelled out every detail of the relationship. When their outsourcers were punch-drunk from the contract negotiation process, they sent procurement in to squeeze out the last drops of margin. Quality and other performance variables often suffered.

Then Toyota changed the game. They didn't spread their business out; they concentrated it at one or two suppliers. This was a huge windfall of revenue for these suppliers to spread their fixed cost over and to invest against. Moreover, Toyota didn't squeeze the last drops of profitability out of the vendors. They asked their suppliers to open their books because they wanted to ensure that they were allowing their vendors to make a fair profit. In some cases, they paid them more than they had in the past!

But in exchange for this windfall of revenue and profitability, the bar went up dramatically on expected performance. Smaller, more frequent deliveries, billing changes, higher quality standards, and drastically improved cycle times were now required.  But Toyota didn't leave the suppliers twisting in the wind...they sent sent their own quality and production staff out to work with the suppliers to train them and help them improve their results.

Not only did the bar go up on current period performance, but the expectation was set that quality and productivity would continuously improve: the vendors were expected to experiment and deliver Year-over-Year (YOY) improvements. The gains that the suppliers were required to achieve were shared: Toyota got lower costs; the supplier got higher margins.  (For more, see The Machine That Changed the World.)

 
The Payoff Pitch: Turning to our own industry, the typical client-outsourcer relationship is closer to the old U.S. manufacturing model than it is to the Toyota model. Clients today typically don't concentrate the business with one or two outsourcers; they don't ensure they are making a fair profit; they don't put people permanently on-site, teaching them better ways to improve results; and they don't hold them accountable to hit and continuously improve performance measures. (There is some accountability, but it basically just comes down to not being the worst of the client's outsourcers.  If you are the worst, you will probably be replaced.  If you are in the middle or at the top, you will likely maintain the contract.)

 
The way Toyota works with their suppliers has proved to be best a practice for achieving YOY improvements, and they are coming soon to a BPO near you. The firms that are going to win and make real money in the new BPO world will be the ones who can demonstrably and continuously improve their clients' output measures.

By this definition, no one is winning today. Outsourcers, unless they are starting from a terrible place, are not showing dramatic YOY improvements in quality, productivity, and customer satisfaction. No one is delivering YOY improvements, and I can say with absolute confidence that the current "we monitor and coach agents" approach will never deliver the level of improvements that will soon be required.

The way the winning BPOs are going to deliver YOY improvements is the same way the manufacturers did. They are going to move away from managing the worker and focus on managing the process by augmenting the agents with agent-assisted automation.

This is not a theory. This technology ensures that increasingly larger portions of the call are 1) exactly correct, 2) every time, 3) without any monitoring and coaching.  On many call types the technology can be used from the beginning to the end of the call, with little need for the agent to use their live voice.  I know, you are thinking, "Yeah, on what kinds of calls?  Change of address?"  No, this technology has been used on phone activation calls, on credit card phone calls, and yes, even on the holy grail, tech support phone calls.  If you can define "correct," you can execute the call with agent-assisted automation.

With a single process for the agents to execute, the primary improvement focus is on the process, not on the agent. Any changes that are made instantly improve the performance of all the agents. Through this approach, average handle time and after-call work can be lowered, along with not just improved, but perfect disclosure compliance and cross-sells, all while maintaining or increasing C-Sat.  (You can read more here:  Can a Simple Focus on Getting Calls Right have the Same Far-Reaching Benefits Just-in-Time had?  Deming not DiMaggio, and What is an Acceptable Error Rate in Contact Centers?)   The effects on agent-satisfaction are also off the dial (see Why Your Call Center Turnover Reduction Efforts are Not Working.)
 

An outsourcer armed with a process-centric approach would easily be able to produce continuously improving client outputs on many measures, and the heretofore unthinkable, perfect performance on other key measures (disclosure compliance or cross-sells as examples). Further, because they would be absolutely kicking the asses of the other outsourcers they were pitted against on every single agent performance metric they would increase their share of wallet (what client would keep giving business to oursourcers that were so dramatically under performing?).  Performance like this would also enable them to increase their margins because the contract would be structured so that any gains the outsourcer achieved would be shared between the client and the outsourcer. This would result in a dramatic increase in both revenue and margins - and isn't that how we define winning from a shareholder perspective?

 
"What are you going to do to make me better?"  No outsourcer can answer this question today.  The ones who can in the future will take over the industry.

Not So Young Frankenstein

Let's say you were a modern day Dr. Frankenstein and you decided you wanted to bring an organizational creature to life.  Let's further say you were a nefarious Dr. Frankenstein and the organizational creature you wanted to bring to life was one that continuously produced errors...lots of them...day in and day out.  What would go into the design of an error-producing organizational machine?

First, you would have hundreds of detailed processes that the people in the organization would be expected to perform.  Forcing people to execute lots of different process with lots of details increases the probability of errors.

Second, you would not define a standard of what constituted the correct way to do each of those processes.  Some processes would be defined. Others would not.  Some processes would ostensibly be defined, but people in the organization would disagree about what really was the correct disposition.  When "correct" is not clear, errors can bloom.

Third, you would have those processes change frequently.  Big changes and little changes...just constant process changes.  This keeps the workers off-balance and increases the chance of errors.

Fourth, you would have poor change control mechanisms.  Processes would change but the changes would not always be effectively communicated.  There would be no master register of changes and no way to effectively determine if all of the updated processes were being correctly followed.  The lack of effective process performance feedback is great for error making.

Finally, on the process side, you would minimize the amount of  automation available to help workers get the details correct.  If something had to be drilled they would have to do it by hand.  No machine to help employees get the exact size hole in the exact spot.  If there were a lot of details to remember, people would just have to suck it up and remember them.  Further, the job aides you did give them would not work well together.  Having old legacy systems that require a lot of cutting and pasting increases the chances for errors.

Onto the people in this error-producing organization.  A seventh characteristic of a well-designed error making organization would be a low hiring standard.  No college degree required, no employment tests to assess baseline competency.  The lower end of the labor pool is best for higher errors.

After hiring low quality workers, give them poor training.  The training around the processes would be incomplete and the acceptable performance standard for completing the training would be low.  An adequate demonstration of basic competence (70% passing score...which of course is 30% errors) would be enough.  Having poorly trained and mediocre workers makes for really high errors.

Next signal to them that they are low quality by keeping them on a tight leash...make it known that you know when they are a minute late coming back from breaks and lunches...ask them what is wrong if they are in the bathroom too much.  Further send this "you're completely replaceable" message by telling them that there is a large pool of applicants waiting for their job.

It also helps if you can make the work itself super boring and repetitive.  There is nothing that drives errors better than a boring repetitive job as it leads to steps getting skipped.  Oh and make the environment randomly stressful by, say, workers getting yelled at by customers. High fatigue and stress are great for errors.

Finally, don't pay the workers that well.  Low wages and no variable compensation for higher performance.  When everyone gets the same no matter how they do and pay is based on tenure, which is another way of saying how long they last, it really helps people not care which feeds the error machine.

And speaking of tenure...since the jobs are boring and stressful, and the workers don't feel valued, they quit...frequently.  We don't care about them quitting, because as we told them, "there is more where you came from."  We want high turnover because it means lots of inexperienced employees which is like oil for the error-machine.

What do you think of our design?  How could an organization designed like this not be a world class error-machine?

This is not a dystopian vision of some "Breaking Bad" science fiction future.  No, this error-making organization exists today.  In fact there are lots of them and they have been around for years.  It's known as a call center.

I am not trying to be Debbie Downer here.  I am trying to shed light on the fact that the 40-year old paradigm for the design and management of call centers almost guarantees a high error rate.  A call center leader who doesn't believe her/his organization is an error machine is just plain struthious.

It, of course, doesn't have to be this way.  The fixes are right in front of us...just do the opposite of what you would do in the design of the error-machine.

The problem is all of those activities drive up short-term costs and many of today's call center leaders can't see past that.  It is analogous to when American managers visited Japanese plants in the 80's where they couldn't believe that employees had the power and were encouraged to "stop the line" to fix quality problems.  They couldn't see that the long term cost reductions due to the increase in quality far outweighed the short-term cost increase of interrupting the production run.

One fix with immediate ROI is allowing the agents to use automation.  I go into detail in this post Can a Focus on Getting Calls right Have the Far-reaching Benefits Just-in-Time Had? listing all the sources of financial return that come with defining "correct" and using automation to ensure the agents handle each call correctly.

There is a lot of talk these days about customer service and getting the front-line agents to turn customers into zealots.  I think this is the right direction.  But before we ask our agents to love our customers to death, isn't it important that our agents know how to correctly resolve the customers concern?   Can you really fall in love with a car brand that delivers a great service experience if your car is constantly in the shop?