Features: September 17th, 2002

Public Sector Call Centres

What the National Audit Office Would Find if They Could See

Jeremy Cox, Vanguard Consulting

 The National Audit Office (NAO) is mid-way through compiling a report for parliament on the quality of service and cost of public sector call centres. I asked the civil servant leading the review if I could help. I told them about my experience transforming performance in both public and private sector call centres. I told them I could provide data on just what they were looking for – cost and quality of service. They said they didn’t need any help, they knew what they were doing, and there was no need for consultation.

What do you suppose the NAO will find? It all depends on how you look at the design and management of work, and the NAO will look at public sector call centres from a traditional, mass-production perspective. This will lead to one set of conclusions and actions. I have learned to look at organisations from a systems-thinking point of view and this leads to a very different set of conclusions and actions. This article explains some of the differences, and shows how understanding and managing organisations as systems leads to a transformation in service, reduced cost, and a huge uplift of morale.

Customer dissatisfaction

Here’s what happened to me when I called my local council to have an old washing machine and garden waste collected from my house. I spoke to someone in a call centre; they were not able to arrange the collection, so they took my details and said someone would call back ‘later’. The depot called six hours later and we arranged a collection…. in three weeks time. When the truck came they took the washing machine and garden waste but left the dead Christmas tree I had put on top of the washer. I was in the house watching, they didn’t knock on the door and ask if the tree should go too, they just left it in middle of the path. I had to call the call centre and start the whole process again….

This experience is not unusual; hand-offs, delay, service that is barely acceptable, disengaged staff. Most people will have stories about poor service when dealing with an organisation that has a call centre. The experienced is mirrored across all public sector organisations and types of interactions from housing repairs to planning applications. Why? Because of the way the work has been designed and managed – from a traditional, mass-production point of view. The work has been broken up and a call centre ‘front end’ has been added because this seems like the best way to save money, and provide a high-volume, one-stop front office to handle the demands customers make on different parts of the public sector.

What the NAO will see when they look at my local authority call centre is that my call was answered within the target set by  the call centre managers (usually a ‘grade of service’ measure of how many calls were answered within a specified time), that the call centre is operating to its budget, that the call was handled ‘acceptably’ because the agent was able to deal with my request by passing my details on to the depot. They will see traditional ‘production’ measures that are used to measure the agents – call handling time, time spent on the telephone, number of calls handled. These are all things you find in mass-production systems, and they all lead to sub-optimisation of performance.

What the NAO will also find is symptoms of this sub-optimisation; high staff turnover, poor morale, customer complaints, backlogs, poor relations and a lack of co-ordination between functions, and a disconnect between management and workers. These are all to be found in call centres, public and private, again because of the way they are designed and managed. The Government’s own Call Centre Guidelines, part of its e-government strategy, demand that call centres are built this way.

Mass production verses systems thinking

So what’s wrong with mass production thinking? Why does it cause problems? There are many differences between mass-production and systems (or lean) thinking, I’ll highlight two really fundamental problems:

  1. Mass Production systems fail to understand the real nature of customer demand, and instead treat all demand as units of production.
  2. The overriding instinct of management is to act on the people, rather than the system.

If the NAO could see from a systems perspective they would understand the types of demand customers place on call centres. They would understand demand from a customers’ point of view by actually listening to real demand, not holding focus groups. They would discover that 40-60% of the demand placed on the organisation is ‘failure demand’ – unhappy customers calling because the organisation has failed to do something or has not done something right. Mass production systems tend to treat all calls the same, and do not make this distinction – all calls to the call centre are units of production to be answered within three rings and within the average handling time.

With their new perspective, the NAO would move on to discover how well the system responds to each type of demand – with measures of how the system creates value from its customers’ point of view. In my example, the answer is badly. I wanted someone to come and collect all my bulky waste quickly, which patently didn’t happen, but the mass production measures would say the call centre is doing a good job.

With their new systems perspective the NAO would then be able to see ‘flow’ – the way that work flows round the system, and they would see that it is full of delay, rework, checking, inspection and unnecessary activity. They would see that the only work that should be done is the ‘value work’ – the work needed to directly create value for each customer’s individual demand, and nothing else. This systems perspective on demand, value and flow leads to dramatic insights.

The second problem is equally damaging; managers assuming that good and bad performance are mainly attributable to the people working in the call centre. This is simply not true, but it is a firmly entrenched belief. Were the NAO to learn to see performance from a systems perspective, they would see that 90% of the causes of variation in performance are things entirely beyond the agent’s control – the types of calls arriving, IT performance and design, procedures, the measures and incentives used by management, the list goes on. All of these things are in the system, and judging call centre agents individually against measures and targets that are beyond their control is thoroughly demoralising – the result is increased cost and even worse performance. This is why call centres have become sweat shops.

The mistaken view that ‘our people make the difference’ and that people need to be ‘managed’ leads call centre managers to focus on completely the wrong things. Here are some examples from one randomly selected edition of a call centre trade magazine. They illustrate the traditional remedies for what managers see as the ‘people’ problems in call centres:

  • Gossip is good for you “Gossip is probably the most effective way to manage and boost morale in the workplace says Dawn Redmile.”
  • Dramatic Turn for Team Leaders Team Leaders became musical directors for the day at the Welsh National Opera. Manweb Scottish Power said it was keen to use the skills of the workshop leaders to motivate and develop call centre teams.
  • How do they sound? Research has shown that the tone of voice makes or breaks successful calls.
  • Call Centres Face Uphill Task on Pay and Turnover – average staff turnover is 22%. Deploying a full battery of measures in order to come to terms with the problems of recruitment and retention, companies have adopted a number of different approaches; training and development, pay, incentives, career structures and progression, recruitment, working conditions, bonus schemes, exit interviews, flexible/permanent contracts, benefits, flexible working, communication, multi-skilling, management skills training and leadership style reviews, increase job variety and responsibility

The key to improvement is for managers to give up the idea that it is the individual that makes the difference, and lead the way in engaging call centre managers and staff in improving the way the work works – acting on the system, not the people. The system governs performance, and the design and management of the system is governed by the way management think. If management thinks in mass production terms, you get mass production results.

The problems I have outlined (there are many more) are being compounded by the government. Here are a few examples from the government’s own Call Centre Guidelines, which specify what is expected from call centre managers:

Performance targets for:
  • service level…. e.g. 80 per cent of calls answered in 60 seconds.
  • agent occupancy, call abandonment and unavailability, average call length.
  • typical call duration, total volume calls, typical cost of servicing calls.
  • the proportion of enquiries that are dealt with in a single call.
  • fulfilment despatch e.g. orders for literature despatched within x days.
Attitude to Customers:
  • The business process …. is viewed from the citizen’s perspective…. by including citizens or citizen’s representatives in the earliest stages of development and/or through using market research, feedback from front line staff, trials or focus groups.
Functional & Process Design:
  • Service Level Agreements between the ‘service provider’ (back office) and the Call Centre.
  • Using IT to record contacts with citizens, referral to back offices, referral tracking and response/completion
Call Centre Manager and Team Leader roles characterised by:
  • Moment by moment management, to respond instantly to changing conditions in the Call Centre, to interpret immediately complex management information
  • The need to give continuous feedback on performance to staff
  • The need to manage attendance and sick absence so as to provide maximum performance from the Call Centre.

Remarkably, none of these remedies even approaches the insights that a systems perspective gives us. Systems thinking gives us a better way to improve performance by understanding demand and what matters to customer from the customers’ point of view, to see how well organisations respond to those demands, and to engage management and workers in constant improvement to the way the work works.

If only the NAO could learn to see from a systems thinking perspective, we might just have an opportunity to really improve public sector performance and cut costs at the same time. That’s something politicians, bureaucrats, voters, taxpayers and users of government services everywhere would really be interested in….

jeremy@vanguardconsult.co.uk www.lean-service.com