Fumbling Customer Service Handoffs

Source: NY Times

In healthcare, practitioners have been paying attention to "handoffs" for quite some time in an effort to improve patient safety.  An handoff is when a patient is transferred from one clinical team to another, or when critical information about a patient is transferred from clinician to clinician.  Fumbling a handoff can lead to a serious medical error.

Now, KPMG's Scott Lieberman argues that similar fumbled handoffs lead to many customer service problems at companies.  In Fast Company, Lieberman writes:

Ask your department heads how things are going, and you’ll hear good news. Leads and engagement are up, sales hit quota, and customer service is chipping away at response time. Every dashboard is green.

But ask your customer, the one that’s been passed along three times in five minutes between chatbots and agents and intervention specialists, and you’ll get a different report. Because she’s explaining her story for a fourth time: This company knows my birthday, my shopping history, and my shoe size. But they can’t remember the conversation they had with me 60 seconds ago.

And yet both things are true. Your dashboard is green, and your customer is on a hamster wheel. That’s the trap. Companies grade their performance one department at a time. But your customer is grading based on her experience of one company, start to finish, and the whole operation’s getting a D-plus.

The gap between those two scorecards lives in the handoffs—the moments a customer passes from one team to another—and that’s precisely where most companies are struggling.

Lieberman's description rings true for those of us who have called a customer service center recently.  The process can be maddening, particularly when you are transferred from one department to another.  Understanding how customers live through an entire process is critical.  How often must they be transferred? For what reasons?  How often do they get frustrated and hang up?  What information must be constantly repeated because it is not transferred effectively?   Solving these pain points requires understanding the ENTIRE customer journey, and that often can be very complicated.  

L.L. Bean Alters Its Unlimited Returns Policy

L.L. Bean announced a major change in its famous product return policy yesterday.   The Maine-based retailer always used to allow customers to return goods years after purchase with no questions asked.  Their lifetime guaruantee stood out as one of the distinctive elements of the firm's value proposition and brand positioning. Now, though, the company has put a one-year limit on product returns. Here is what the company told the Wall Street Journal: “For over 100 years, our guarantee has worked just fine, but in the past five years in particular, our guarantee has been misinterpreted as a lifetime product replacement program and we have seen a large influx of returns that have nothing to do with product quality or satisfaction."  Boston.com reported on the rampant customer abuse of the L.L. Bean's longstanding policy, leading to this change in company policy:

Over the past five years, the company has lost $250 million on returned items that are classified by the company as ‘‘destroy quality,’’ said L.L. Bean spokeswoman Carolyn Beem. ‘‘Destroy quality’’ items are destined for the landfill. First-quality products are returned to store shelves and ‘‘seconds’’ are sold at outlets or donated to charity. It’s not uncommon to hear stories of people clearing out basements of used or unwanted L.L. Bean products, sometimes decades after their purchase. Some customers replace the same items year after year to get the latest outdoor gear. Some even head to thrift stores, yard sales or junkyards to retrieve L.L. Bean items that they then return.

Sadly, a small minority of customers have spoiled it for the rest of the company's loyal fans.  For L.L. Bean, the policy change is not without risk.   However, the fact that competitors, including REI, had already made similar changes in recent years lessens the risk.   Moreover, the company does leave itself the ability to address customer concerns on a case-by-case basis.   The new policy on the L.L. Bean website states:  "If you are not 100% satisfied with one of our products, you may return it within one year of purchase for a refund. After one year, we will consider any items for return that are defective due to materials or craftsmanship."   In other words, if you are a loyal customer and have a return after one year, the company retains the ability to address your concerns.  They simply do not want to have to provide a blanket, open-ended return policy for all.   

In general, I think L.L. Bean appears to be handling this issue well.  They clearly did their homework vis a vis loyal customers and their competitors before making this change.  However, I do wonder why they didn't choose to simultaneously announce some other measures to demonstrate their commitment to their most dedicated fans.   An olive branch to the hard-core fans, offered in conjunction with this policy change announcement, might have provided a more upbeat message and offset some of the negative reaction they surely will receive.   

Chipotle Responds to a Food Safety Crisis

Chipotle finds itself facing a major crisis these days.   The company has experienced a major E. coli outbreak.  It began in the northwestern United States, and the firm closed a number of restaurants temporarily to address the situation.  However,  reports now indicate that some Boston College students may have gotten ill after eating at a Chipotle in Boston.   According to Boston.com, "City inspectors closed the Chipotle, located in Brighton near BC’s campus, “until further notice” after reporting three critical health violations following a visit Monday... Chipotle believes norovirus is to blame for the rash of illnesses that seemingly stem from the Cleveland Circle restaurant, but the Boston Public Health Commission says it’s too early to tell."

The Wall Street Journal asked several crisis management experts to assess Chipotle's response to the crisis.  Richard Levick commented,

"Long term, Chipotle will need to carefully examine its supply chain. Its 5% stock drop is likely due to the fact that this is the third instance of foodborne illness connected to Chipotle since August. That leaves the company more vulnerable to lawsuits and potential regulatory action. It also directly contradicts a brand built, at least in part, on the sourcing of fresh, organic, farm-sourced fare. Thus far, the supply chain has not been a major focus of the company’s communications. In the coming weeks, that may need to change."

Levick raises a crucial point. Product quality and safety crises become especially threatening to a company when they go to the heart of what a brand has chosen to stand for over many years. In fact, companies can be punished even more extremely by customers (and investors) when a crisis undermines the core of their competitive positioning. Chipotle has staked its reputation on the quality and freshness of its ingredients. Thus, the supply chain has been at the heart of their competitive positioning. Any substantial defect in that supply chain will have long-lasting repercussions. The company not only has to address the situation at the restaurants, but they will have to reassure customers that the supply chain indeed lives up to the reputation that has been cultivated over time. As a big fan of Chipotle, I hope they get it right! 

The NFL: Could Growth Obsession Become its Downfall?

The National Football League has never been more popular in the United States.  The league enjoys record ratings and lucrative television contracts.  Long ago, the league surpassed major league baseball as the national pastime.  However, many observers have noted a substantial decline in the quality of play recently.  Are such observations just the usual nostalgic "it ain't like the glory days" comments, or is there some truth to the comments?   That's hard to tell at the moment, though the league does appear to have an inequality not seen in some time (record number of 6-0 teams at this point in the season comes with an incredible amount of futility as well).  

What could be driving a decline in the quality of play?  I would hypothesize that the obsession with revenue growth has diluted quality... something we see in many industries.  The NFL is not immune to that phenomenon.   How has revenue growth obsession damaged quality?   One reason may be that the desire for growth has led to a huge shift in emphasis toward offense.   Fantasy sports have contributed greatly to that emphasis on offense.   As the emphasis has shifted toward increasing scoring, the league has become very pass happy.  The running game has diminished in importance.  How does that lead to decreased quality?  Well, for one thing, the incredible emphasis on passing offense means that one player, the quarterback, is more important than ever.   The quarterback has always been the most important position on the field, but now the critical need for superb play at that one position is elevated substantially.   In the past, you could win in multiple ways.   You could run the ball in a dominant fashion.  You could have a monster defense.  Today, the old adage "run the ball and stop the run" just does not apply.   If you do not have a superb quarterback, you are going to struggle to win consistently.   Recall that quarterbacks such as Mark Rypien, Brad Johnson, Trent Dilfer won Super Bowls in the past.  That seems increasingly difficult in this new era.  The problem, then, is that the league does not have enough quarterbacks who can play at a very high level.  This year, Peyton Manning has suffered a decline in skills due to age and injury, and other top QBs (Luck, Roethlisberger, Brees) have been injured or have played poorly.  So, in a rush to drive revenue growth, the league made itself more dependent on one position, the quarterback.  However, it does not have enough excellent quarterbacks to maintain a high level of play.  

That's my hypothesis.  The NFL is not immune to the basic tradeoff that many firms face... top line obsession can lead to brand and quality dilution.  The ratings continue to soar, but will this problem eventually lead to a loss of viewers?    I don't know... I still watch, but then again, I have the privilege of watching the greatest quarterback of all time each week.

Should You Purposefully Annoy Your Employees?

Ray Fisman and Tim Sullivan offer an interesting anecdote in today's "How To Be A Better Boss" article in the Wall Street Journal.   Fisman and Sullivan write:

Employees often wish managers were a little more understanding, but people tend to associate the idea of "understanding" with "nice." A little well-directed pain can be a good thing in getting workers to focus on the tasks they might otherwise choose to forget, and to increase overall productivity.  Given that developers often prefer programs to people, Kayak founder Paul English says, making them deal directly with customers' questions drove them nuts. Once they heard the same complaint two or three times, the engineers tended to stop and fix the code. As an added bonus, after taking his turn on customer-service duty, an engineer can pass the phone—along with its grating ring—down the line for someone else to deal with.

What an interesting example!   Of course, the phone calls work for reasons beyond the fact that they annoy the software developers.  The phone calls create a direct line of communication between the developers and the users.  Kayak has removed all the information filtering that often takes place between the users in the marketplace and the developers back at the office.  Moreover, developers get a real sense of what is just a one-off complaint versus a real pattern.   Too often, someone can shrug off a complaint from the sales force as an "isolated incident."  However, in this case, the developers can begin to see that a pattern exists, and that the incident is far from isolated.   Finally, the developers share the pain here.  We don't have a few "problem-solvers" focused on fixing bugs.  We have all the developers addressing bugs.  Everyone is accountable, as opposed to having a small unit that worries about fixing bugs.   The collective accountability goes a long way toward improving quality.  Once everyone knows that they will have to address these calls at some point, it also makes people take extra care to get it right the first time.  

When Management By Walking Around Fails

Anita Tucker and Sara Singer of Harvard Business School have conducted a fascinating new study about how leaders interact with workers on the front lines.  They examined efforts to improve quality, efficiency, and customer satisfaction in hospitals.   The scholars conducted a field study of 56 work areas from 19 randomly selected hospitals and compared the results to 138 work areas in 48 randomly selected control hospitals. They examined an approach called Leadership WalkRounds™ which they describe as "a program of [senior managers] visiting the organization's front-lines to observe and talk with employees while they do their work."  They found that employee perceptions of performance improvement dropped after implementation of the WalkRounds™-based program. The scholars argue that,

"The study provides a cautionary tale that visits by senior managers to the front-lines of the organization will not necessarily increase staff perceptions of performance improvement.  Failure to meet expectations, once raised, can negatively impact organizational climate. Unless such programs are implemented with authentic motivation to identify and resolve issues, they may yield a negative return on the money invested."

Should we be surprised by the findings?   I'm not so sure.  While I've written about executives who effectively engage the front line workers in their organizations, I've also seen many cases where such efforts are counterproductive.  What goes wrong when executives visit with front-line workers?  Here are a few pitfalls that I have seen:

1.   Sometimes, employees perceive the visit as an "inspection" rather than a genuine effort to solicit input and ideas from workers.

2.  Workers perceive that managers have already made up their mind on certain issues, and therefore, that the executives are not genuinely listening and considering their views.   In other words, workers conclude that they aren't being given a legitimate opportunity to influence decisions.  

3.  Senior managers spend too much time talking and not enough time listening.  They focus on communicating messages to the front lines, rather than soliciting feedback.  

4.  Workers change their behavior because of the presence of senior managers. Therefore, managers do not get a sense of what's really going on in the organization. 

5.  Executives fail to follow up in a timely manner on employee ideas or questions.  

How Analytics Can Help You Improve Quality and Reduce Costs

I found a terrific example of the use of "Big Data" in Fast Company magazine this month.   The article by Farhad Manjoo describes a situation at Washington Hospital Center.   ER doctors became concerned that many patients returned to the hospital just a short time after being discharged.  A computer scientist at Microsoft Research began to investigate.  He wanted to identify some triggers that would predict whether a patient would be readmitted.  Specifically, he was looking to help doctors identify some predictors that might not otherwise receive much attention by ER physicians and nurses.  He analyzed more than 300,000 ER visits.    Among other things, he discovered that the length of a patient's stay in ER tended to be a good predictor of readmission.  If a patient stayed in the ER for more than 14 hours, they were likely to return to the hospital within a few weeks.  Similarly, if the patient's chart mentioned the word "fluid" at some point, that seemed to predict readmission quite well too.  

This story illustrates how companies can use analytics to help them understand how to improve the quality of customer service, as well as to reduce costs.  Take an automobile dealer.   They conduct repair and maintenance on thousands of cars per year.  A fair number of those cars return shortly after a repair or maintenance appointment, because something is not working correctly or hasn't been done to the customer's satisfaction.   An automobile dealer could analyze the data from thousands of those cases, and it could try to identify the predictors of return visits.  If they could identify a few solid predictors, then they could try to intervene to reduce those return visits.  Those interventions could improve quality and customer satisfaction, while reduce costs (since every return visit is costly).   Many service businesses could apply a similar logic and use analytics to achieve positive results.   Can your company benefit from such an approach?