Failure Demand – it’s hidden in plain sight

Prefer to watch on video than read?  Click here – 5 mins with captions.

Less cost, happier customers, happier staff, happier you. 

There’s something hidden in plain sight which is inhibiting these from happening – John Seddon’s Failure Demand.

It’s not a new concept, but John’s naming of, and describing of the concept is brilliant, which leads to understanding and action.  His book Freedom from Command and Control is a must-read for anyone involved in service centres, along with the more recent Beyond Command and Control.

A Work System

I start from a basic work system – we have Customers, they put Demand onto the Work System, which in turn produces a Widget.  If we get the Widget right, and do it at a cost which makes it feasible…we satisfy the Demand (and think of Widgets as anything provided – could be a conversation, a workshop…)

Happy circle? Well…

Two Types of Demand

Now let’s focus on the aspect of Demand – that force that gets put onto the Work System whenever someone asks for something.  What John does is divide this into two types of demand – Value Demand and Failure Demand.

Value Demand is demand placed onto the system for whatever the system is actually there for

If you’re a business selling T-shirts, and someone asks for a T-shirt – that’s Value Demand. This contrasts with Failure Demand…

Failure Demand is demand onto the system for something that went wrong

This T-shirt I got sent is not the one I ordered” is an example of Failure Demand.

Here’s the thing – if you look at volumes, for example classic call centre stats like call numbers, time of answering, average call-time, all of those things – all the demand looks the same.  In fact, you can look like you’re hitting all of your numbers.  Yet, some analysis might reveal that…

60% of the incoming demand is Value.   And 40% is Failure – calls coming in because something went wrong (these numbers are not outrageous BTW)

Which simply means you are running at 40% more cost than you need be, your people are annoyed at handling unhappiness nearly half the time, and the customers are definitely not rating you high on that next NPS.

What To Do

What to do is obvious right?  Start finding that Failure Demand.  No technology changes allowed, just give everyone a piece of paper and a pen (you remember those right), or an easy electronic equivalent, and ask them to note down Value Demand and Failure Demand, and for each of the latter, what it was.

(And no wasting time about what is Value and what is Failure.  Your people already know the difference.)

Then call Vilfredo Pareto so you can be reminded that generally 80% of the pain comes from 20% of the problems, find that 20% and address them.

Too simple?  You might think so.  Which might even be why you haven’t done this.

But you should.

A Special Note for Manager at all Levels

Manager, Senior Managers, Executives, CEOs….you’ve all got your own special version of Failure Demand.  Whenever one of your people brings you an issue and the thought crosses your mind “why is this coming to me?”…you’ve got yourself some Failure Demand.

And note: just like most people in call centres are competent and it’s the system itself that’s causing the Failure Demand…the same thing is happening here.  Except in this case ‘the system’ not only includes the way work is managed, it also includes the Clarity with which you are creating work, and the Capacity and Capability of your people.

The uncomfortable part is…this is all on you.  You have the authority to change the way work is managed in your area, and when it comes to the people, you either chose them yourself, or, if you inherited them…after a year you are now choosing to keep them (I know there are HR procedures you need to follow….just follow them!!!).

The trick is to 1) start seeing yourself as the Work System which is being hit with Failure Demand, 2) choose to see yourself as the one who created that Failure Demand, then 3) address it with the same 80/20 principles as you would in a call centre.

The reward for this?  Time to spend on strategic work.  To move bigger initiatives.  If 20% of the demand coming at you is Failure Demand, that’s a day a week.  Imagine a whole day a week just focussing on getting the future to happen.

Failure Demand could well be your ticket to that promised land.

Now, over to you….

 
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