A friend was thinking of selling a house without using an agent. A lo- cal real estate agent talked her out of it, explaining, “When it comes time to close escrow, you will need me there to guide you through the paperwork.” Of course, by the time the deal was finalized, an escrow agent organized the paperwork; in fact, the agent didn’t even show up.
“It’s all right,” the escrow agent told my friend, “We don’t need her to be here.”
B
y whatever definition you use, servicemeans meet- ing expectations and requirements. If a real estate agent convinces a customer that the 6 percent commission they get is money well spent, it should be based on something. If the agent is able to bring more po- tential buyers to look at the house, that is one form of ser- vice. If the agent advises the seller on how to fix up the house to make it more attractive, that helps, too. But pro- viding false information or, more to the point, playing on the seller’s fears, is a very negative form of service.You never know how poor service is going to come back around later. In the example at the beginning of this chapter, the friend who sold her house ended up investing in numerous other rental properties; her sales commis- sions went to a new agent, because she realized that she had not been well served. The original agent’s integrity was clearly lacking, so that agent lost a good customer.
Even without the lost business element, good service should be provided as a matter of sound morality. We find
Chapter
that in business, as in all other things, an example of good service is most often also the right thing to do.
EFFICIENCY VERSUS COST
The “right thing to do” is not merely a statement about morality; it is also a part of your job description. If you are paid to process information, deliver packages, or prepare reports, your employer deserves to have expectations and requirements met. In fact, your performance is going to be measured by how well you provide the expected and re- quired service. So the right thing to do is the same as good service, and it is the same as good performance on the job.
Key Point You will often find that “doing the right thing” is the same as “performing your job well.”
Once the entire organization understands this premise—the cultural philosophy of Six Sigma and the underlying service ethic of the quality program—every- thing changes. People begin to see service opportunities in everything they do; they begin to see customers every- where they look; and they recognize how small changes often make a big difference in how work progresses.
Another aspect of this change in point of view is re- lated to efficiency. There is a common belief that “things have to get done quickly to save money.” This is the most irrational and provably false belief in the corporate cul- ture. In fact, forcing processes to move too quickly leads to errors, dissatisfied customer reactions, and spending moretime and moremoney getting it right later on. When a customer feels rushed by a retail clerk because a lot of people are in line, it is an uncomfortable feeling and that customer does not want to come back. When a book- keeper rushes through a posting routine, the input gets transposed and the books do not balance; another half day is spent trying to find the mistake. If you rush a report without checking research and double-checking your math, errors and inaccurate information go into that re- port, and the person who finds it (and someone inevitably
finds it) will have no confidence in your ability to “do the right thing” within your job description.
Faster is not cheaper. It is more expensive, and the deliberate, methodical, self-defined pace of a routine has to be respected and followed. If shortcuts are taken, that results in more variances and more end-product defects.
The belief that by moving faster, we save money is con- trary to what logic tells us.
Any analysis of a process has to include the time ele- ment in addition to the steps involved, the area of respon- sibility, and the documents that are produced. In an assembly line environment, rushing through a process is known to cause delays, more defects, and higher costs;
the same is true in the purely service environment as well.
A manufacturing process studies the assembly method and recognizes—in fact, looks for—likely weak links, those points where variances are most likely to occur. The most likely causes of defects are employees not paying at- tention, going too fast, and not checking their own work.
These problems should sound familiar, because they are the same problems found in all processes. People in ser- vice departments, even purely administrative in nature, can learn a lot from the quality control problems and so- lutions of the manufacturing environment. The idea of transporting the production-specific quality control ap- proach into offices and service companies has always been revolutionary, in many respects. Some people have ridiculed the idea; others have tried to apply it incorrectly.
In the 1970s a fad hit service industries—the hiring of efficiency experts. These consultants often were the corporate equivalent of the Feng Shui culture that became popular in the 1990s and remains in vogue today, to some extent. Just as the efficiency expert might have brought a level of validity to the analysis of process behavior, the Feng Shui consultant may be able to offer valuable in- sights about home or office design. But depending entirely on such consultation is a mistake. The efficiency expert who attempts to identify, down to the minute and second, how long a specific function took, was unable to appreci- ate the variables of service as an intrinsic part of that ser- vice. Things do not always take the same amount of time.
So as a form of trying to quantify process—much like the One Minute Management school of thought—the idea just did not work.
Key Point Efficiency—on a practical level—has to mean more than just cutting costs and getting things done more quickly. Otherwise, it is just a word.
The approach to quality control in a service environ- ment was too often based on ill-conceived concepts of ef- ficiency. In a plant environment, an efficient routine can be identified in such terms: producing a unit takes x amount of time, and may involve y number of variables.
This analysis can be placed on a grid and studied visually;
patterns emerge and can be studied; and efficiency can be taken down to the minute and second. Service is not the same as production, and processes take a wide variety of time, depending on far too many elements to reduce to a chart. For this reason, many people viewed quality con- trol as a joke. Management often allowed quality pro- grams to be put in place just to respond to calls for involvement and participation. Some imposed standards:
“Prove you can save money and I will support the pro- gram.” So quality control programs were invariably geared toward cutting costs and expenses (often meaning layoff increases), and the typical employee came to fear the con- cept of more efficiency—knowing it could result in their losing their jobs. Management also failed to realize the importance of top-to-bottom involvement in quality, and treated such programs as ideas to be put in place at the de- partmental level.
So in the evolution of quality control from our past, which was essentially a manufacturing economy, to our present, which is more of a service economy, the appear- ance of Six Sigma has been a substantial change from the quality programs of the past. The complete participation by top management, exemplified by General Electric’s past CEO, Jack Welch, makes Six Sigma different from the types of quality control systems proposed by efficiency ex- perts, and from the magical fix-all proposed by environ- mental specialists such as Feng Shui consultants. There is
nothing magical about Six Sigma. It is hard work but it produces very real results. Not only are processes im- proved through more efficient work; those participating in the change also benefit from the Six Sigma approach.
So the concept of “efficiency” has to be examined carefully. It does not mean doing things more quickly, get- ting out a higher volume of work, or moving a customer through the line with less delay. It does mean identifying variance points and developing internal controls to pre- vent defects. When the efficiency expert of the 1970s re- ported to Management, the conclusion often came down to judgments about time. If a particular set of employees was costing the company a specific salary level per month, that expense could be cut by an assumed percentage if employees could only work more efficiently. So when Management took the advice of the efficiency expert and cut employees, the message to everyone else was: “Work harder and faster, cut the time out of processes, and be more efficient, or you, too, could lose yourjobs.”
Ultimately, this approach led to inefficiency, lower morale, and a universal fear and loathing of efficiency ex- perts. After all, it was unheard of for an efficiency expert to find no flaws in processes, or to advise keeping all em- ployees on staff but improving that intangible service. The efficiency expert did not know how to explain the value of improved service, the universal customer, or the competi- tive advantage to improved processes. So the obvious so- lution was to propose a demonstrable cost and expense savings. If the efficiency expert could convince Manage- ment to cut $6,000 per month from payroll, that more than justified the one-time consultant fee of $3,500, for example. If we hire an expert witness to tell the jury that a client is insane, that witness—paid to come to the conclu- sion—is going to convincingly cite various forms of proof to support the contention. The efficiency expert was a type of expert witness who, tragically, lacked any real ex- pertise other than the ability to manipulate numbers. The motivation of the expert—to justify what the company was paying for the advice—required that some immediate offsetting benefit be identified.
For anyone who has been involved in the analysis of