100% wrong

“Fill this in.”

At a meeting in a Government call centre they are being asked to fill in a spreadsheet. An Excel spreadsheet, so accuracy is paramount. It probably has macros and everything.

Call centre managers have to account for how their staff spend the day, the proportion of the day that are spent on various jobs.  They aren’t told why.

The call handlers job is divided into daily duties,  starting with primary duties such as  telephony or processing cases which are presumably the “Number ones”, then the secondary duties such as filing and support work, all the way down to toilet breaks. Which are almost definitely the “Number twos”

There are some difficulties with this, not each member of staff does the same thing, some do specialist jobs, and not every day is the same. Some are Tuesdays, and at least one in every seven is often a Wednesday.

When asked by staff why they have to do this, the manager replies understandably, “I dont know what its for, nobody has really explained. But as long as it all add ups to 100%, then we can fill it in and get back to our work.”  So they do. The excel spreadsheet is completed, and they make sure the activities add up to 100%, they can get back to their work.

The above is a true story, it happened last week. It will happen this week somewhere and again the week after somewhere else again.  People are asked to account for their time so they do, but it is quite hard to do it, so they fill in the spreadsheet plausibly and pass it back.

If you ask junk questions, you get junk answers. But if they had sat with a stop watch and timed people accurately, would their answers be any the less ridiculous?

This is something called Activity Based Management, a cousin to Activity Based Costing (ABC). The idea being if you know how much time is spent on an activity, and how much cost can be assigned to that activity, then you can manage it better to reduce costs.

Plausible, but a pile of willy.

Hold on, here’s some maths.

Imagine a callcentre that receives 100 calls a day, and it costs £1000 a day to run.

The cost per call handled is calculated by dividing the total costs for the day, £1000 by the amount of activity, 100 calls answered.  £1000/100 results in £10 calculated as cost per call handled.

All well and good, now factor in real-life. In real systems that are ran like this, people pay attention to what managers focus on, and in ABC they focus on activity. This means that as long as calls are handled managers are happy. Customers aren’t though.  Handling calls with a focus on “how long” means that nobody is focussing on “how well”.

You can only focus on one thing at a time. Try reading this and looking around to see if anybody is watching you if you don’t believe me. Focussing on the amount of things done results in not focussing on how well things are done, i,e. purpose.

This means that purpose isn’t met. If you ring a call-centre to get something done or fixed, and it isn’t, what do you do? You ring back. This is failure demand. It’s handy to have a name for things, some people don’t like the idea of failure, so it’s been called avoidable contact amongst other things,  you can call it Micky McGoo if you want, but here it’s failure demand.

If we stop looking at activity, which in the pretend call-centre above resulted in a cost of £10 per call, we instead look at purpose, we see different things. Different costs and different types of work being done.

If 50 of those 100 people who call every day have called a previous day, then there are only 50 new callers, and an additional 50 waste calls, or failure demand. So how much is it now? It should have done the job with those 50 right first time, so if instead if counting calls we count callers the sums at the top are very different.

A cost of £1000 per day divided by 50 callers is £20 per call, this is twice the cost assumed when the cost was divided by the amount of calls, 100.

If you add in the waste calls generated from previous days, you get £20 per new caller and also the cost of that PLUS cost of them calling again. Do this repeatedly and you get more than the cost of running the call centre for one day! My maths ability gives up at this point.

Regardless of the exact sums, increasing your actual cost of dealing with a customer and still not resolving their problem for them will be the inevitable result of running a business based on activity. If I want a call centre to handle calls, then Dear God it will handle calls, and customers will help them achieve that de facto purpose by providing all the calls they need and more. This makes sense, as people who phone call-centres like this don’t get their query resolved in one day, it often takes months of repeated calls.

Focussing on the activity results in more activity to do.
Focussing on the costs results in more costs.

But focussing on the purpose, that results in more purpose being achieved.

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