DNA Health

Whose experience is it anyway?

2012-02-08T22:12:00.001-08:00

Posted By Jason A. Wolf Ph.D., Tuesday, February 07, 2012
Updated: Tuesday, February 07, 2012

During two of my recent On the Road visits (one with Children’s National Medical Center and another for an upcoming story on Banner Health) what I observed and what came up in conversation caused me to pause and ask the question – whose experience is it anyway?

In one example, Kelli Shepherd, the Director of Service Excellence at Banner Good Samaritan Hospital, shared a subtle, but profound change in the language they were using. The shift was one in perspective – from "our” beds to "their” beds. A simple change, but one I believe challenges one of the central mental models I have seen in healthcare. We have often viewed patients as individuals that things are done TO, not necessarily done FOR.

I would not say we have turned healthcare into a heartless, mechanical process. Rather, I caution that what we may have done in not recognizing "ours” versus "theirs” is to design processes and systems and implement requirements and standards made to work best for us, not our patients and families. So what can we do to address this?

1. Clarify perspective. Are we building our programs, and even our patient experience efforts, from what we believe will best fit our needs? Or are we considering the perspective of patients and families as our guests? Stop and ask yourself, especially as you consider developing your patient experience effort, if the process is based on what is easiest for you or what is best for the patient?

2. Build an active process to engage patients, families and the community at large in how we can provide the best experience possible. Many organizations are now using patient focus groups not only to gather feedback post experience, but also to design processes and programs. At Children’s National, Patient Family Advisory Council members are embedded in many departments. They review and offer feedback on processes and provide an open avenue to ensure a broader perspective is available in all planning; they have even participated in the redesign of units.

3. Find ways to show you "listened”. The biggest return on experience investment is ensuring that patients and families not only feel heard in the moment, but also that the experience they are having overall reflects their wants and needs. Find avenues to show you are listening; be transparent about the input you seek and when and how you can (or cannot) use it.

As many of us in healthcare call hospitals the "house”, we must acknowledge that we are welcoming patients and their families into "our” house as guests. Our efforts should be focused on ensuring we provide the best experience possible. To do so we must recognize whose experience it is in the first place.

Jason A. Wolf, Ph.D.

Executive Director

The Beryl Institute

The human factor in service design

2012-02-03T06:53:00.001-08:00

Focus on the human side of customer service to make it psychologically savvy, economically sound, and easier to scale.

JANUARY 2012 • John DeVine, Shyam Lal, and Michael Zea

Source: Operations Practice

Poor customer service isn’t a headache just for consumers; it’s a problem that vexes senior managers too. Balancing the trade-offs between the cost of services and the customer experience benefits they provide is difficult. Ensuring that frontline workers can efficiently and consistently execute service offerings across a far-flung organization is harder still. Along the way, many companies lose sight of what makes human beings tick—for instance, by overlooking well-known principles of behavioral science when delivering services—and thus unwittingly predispose customers to dissatisfaction.

At the same time, the customer service landscape is changing as social media and new mobile phone technologies give companies unprecedented access to data on customer interactions, while the technologies are changing the nature of the interactions themselves—for example, by amplifying the speed and impact of customer complaints.

Three questions

Against this backdrop, some organizations are making strides in the design and delivery of services. By focusing more thoughtfully on the human side of customer service, these companies are lowering costs by 10 percent or more while improving customer satisfaction scores by up to 30 percent. In this article, we’ll look at three such companies—a provider of cable-TV and Internet services, a technology company serving small and midsize businesses, and a car rental company. From their experiences, we’ve distilled three interrelated questions that CEOs and other senior executives should ask themselves before they introduce new services or conduct a reality check on the health of existing ones. Taken together, the questions can help spur productive conversations among top-team members, raising the odds that a company’s services will be both efficient and effective.

1. How human is our service?

It’s no secret that the quality of a company’s service interactions matters greatly in creating a positive experience with customers. Yet few companies focus on how customers form opinions about those interactions. By applying well known principles of psychology and behavioral science to service designs and working harder to understand what really motivates—and irritates—customers, companies can begin improving the experience quickly and at low cost.¹

Consider the experience of the cable-TV provider that looked to behavioral science to help improve its widespread reputation for bad service. The company started by examining the characteristics of its most important customer interactions—phone calls initiating new service—and quickly identified several pain points. The calls, for example, typically contained off-putting directives from agents, as well as “dead” periods when customers felt that their time was wasted. Worse, the calls often ended with awkward billing discussions and legal disclosures.

The company completely redesigned the calls. First, credit verifications occurred earlier, and in the background, while agents helped customers set up their accounts. This approach eliminated awkward silences, as well as the frustrations that arose at the end of calls if customers were found not to be creditworthy.

This new approach also allowed customers to feel more in control, by adding simple choices to the conversation: “How do you want your billing to be set up?” for example, or “How would you like your installation to be conducted?” By reframing as choices what had previously been directives, the company found that consumers began rating the interactions more positively.

Agents were also coached to end the calls on a high note—another human preference that behavioral scientists have identified—by surprising customers with a coupon for a free product. Replacing what had been a stilted and highly scripted ending (“a lot of fine print and disclosures,” admitted one sales agent) with a bonus offer helped customers to view the calls more positively, introduced them to the company’s product catalog, and ultimately drove higher sales.

Similarly, behavioral science indicates that customers dislike unexpected changes and are more satisfied when they can stick to their habits during service interactions. A B2B sales group at a technology company took this tendency into account when it significantly redesigned its sales processes for small-business customers. The company augmented its traditional sales blitz approach—multiple reps targeted many clients at once, common in B2B settings—by assigning a specific “service champion” to each client. A consistent point of contact improved customer satisfaction and helped free up the sales reps’ time for additional selling.²

Finally, by thinking harder about what makes customers tick, companies can turn service weaknesses into strengths and even spot possible new service offerings. A rental-car company, for example, recognized that its value-segment customers became more anxious than its premium customers did at the prospect of finding assigned cars in crowded lots. (The reason, in large part, was that value-segment customers traveled infrequently and were less familiar with the rental process than the premium customers were.) This observation led the company to introduce a successful—and, for travelers, less stressful—“pick any car” option.

2. How economic is our service?

The service offering that the rental-car company implemented was grounded in a clear economic rationale. The pick-any-car option was not only more efficient to operate than the old system but also created valuable revenue opportunities: the economy- and luxury-car choices were parked next to each other, so value-segment travelers with families were frequently tempted to splurge on larger, more expensive vehicles. Many executives miss opportunities such as these when they overlook the full economic impact of customer service.

In practice, of course, trade-offs among service levels, revenues, and costs are complex. Mastering the challenge requires developing an integrated view of the economics across a range of customer touch points. Often, tools such as breakpoint analysis, which can help determine customers’ actual sensitivity to service changes, are a good place to start.

The rental-car company, for example, conducted such an exercise and learned that its value-segment customers were more amenable to driving used cars than it had previously assumed. Received wisdom in the industry held that consumers balked when vehicles reached 30,000 or so odometer miles. Yet a quantitative and qualitative analysis showed that customers would accept cars with higher mileage if the costs were relatively low, the cars were clean, and the company offered a well-crafted maintenance and reliability guarantee. Determining the breakpoints opened the company up to a whole range of higher-mileage vehicles it hadn’t considered before and thus represented a significant potential for savings.

Similarly, the technology company’s sales group found that wide variations in service levels were acceptable when it returned its customers’ telephone inquiries. Executives knew, of course, that calls about the accuracy of orders required an immediate response but hadn’t realized that the company’s B2B customers were willing to wait up to a week for answers to other types of inquiries. Getting a handle on the different breakpoints allowed the service champions to work efficiently while still focusing their immediate attention on service hot spots.

The cable company’s managers conducted similar analyses as they focused on its inefficient (and, for customers, frustrating) scheduling system for in-home installations. The company had considered narrowing its appointment window— the block of time in which it promised to arrive at a customer’s home— to one hour, from four. But after studying the sensitivities of customers, the company found that the duration of the appointment window was less important to them than having drivers actually arrive sometime within it. Furthermore, the sweet spot for efficiency and customer satisfaction came at the two-hour mark. Optimizing for service better than that wasn’t worth the additional cost.

To be sure, the cable company’s executives looked closely at other basic cost drivers, and also balanced them against service outcomes. The company recognized, for example, that customers hated it when its employees didn’t have the necessary equipment on the day of an installation and had to schedule a second visit. Worse, any time the installers spent driving back to the distribution center was time they couldn’t use to educate customers about using the new equipment or to sell spur- of-the-moment service upgrades. An analysis of supply chain and inventory levels for modems and video equipment helped the company to improve its “on truck” availability in a significant way. This and other process changes helped double the amount of time installers spent educating customers, and that led to a 10 percent increase in additional sales made on the day of installation.

3. Can our people scale it up?

When putting together services that are economically attractive and grounded in a good understanding of what motivates customers, companies shouldn’t overlook their own employees—the other human beings involved in a transaction. Companies give themselves a big edge when they design service processes that a widely distributed workforce can easily adopt, understand, automate, and execute.

The cable company’s call center managers, for example, worked with sales agents to prepare them for the handful of scenarios that were most common, most likely to lead to dissatisfaction, or both: repair inquiries, as well as problems with the Internet, particular channels or channel bundles, and billing. Taking this more modular approach to calls helped improve the quality of training, which in turn helped improve service outcomes and the operational efficiency of calls. Better still, the moves dramatically improved employee satisfaction by giving frontline workers a clearer sense of what was required of them and how to prepare for it. “The new flow of the calls,” said one call center employee, “makes things easier for the customers, representatives, and technicians.”

Similarly, the technology company’s B2B sales unit identified the handful of most common situations its call agents faced each day. It then created a simple checklist of procedures to help standardize the way agents handled these situations; processes had varied considerably before, making communication between sales teams in different regions difficult. The new approach improved the consistency of service and made it far easier for the company to roll out changes across its more than two dozen widely dispersed regional markets.

As these examples imply, making services scalable involves more than standardizing processes: companies must ensure that their employees have the organizational capabilities necessary to carry out the tasks involved. Indeed, any suspected skill gaps should sound warning bells across the C-suite, even if a new service offering is economically sound and psychologically savvy.

This lesson was understood by the rental-car company’s senior team, which became concerned about the scalability of one of its new service ideas: a system allowing customers to check in while riding on the shuttle buses from an airport to the company’s rental facility. The company had piloted the service at smaller locations, where it was successful. By making customers feel, for example, that their time on the buses was better used, the new system made the long ride less annoying. Moreover, the service offered considerable potential for agents to promote vehicle upgrades during the rides.

Nonetheless, as the company experimented with this approach at its larger locations, executives began having second thoughts about its scalability—in particular, whether agents were fully prepared to sell in the new way. Ultimately, the executives tabled the implementation of the new approach until they could study the situation further and determine if the organization was ready for the changes.

Postscript: Organizing for action

While the decision to postpone the new service wasn’t easy for the rental-car company’s executives, at least they were in a position to make the call. Too often, we find that siloed decision making and implementation plans make it difficult for companies to involve the broad range of people required to change customer service priorities.

By contrast, the best companies we’ve studied establish teams with a rotating, cross-functional membership to review key services periodically. The most successful teams include a range of roles, from frontline salespeople and marketing managers to practitioners of lean production and Six Sigma—and even behavioral psychologists.

Further, as more and more customer data become available, some companies are investing in advanced analytics to understand customer interactions and channel preferences at a much more granular level. By focusing on the end-to-end nature of services as customers see them (from, say, order to provision) these companies can spot trouble—and design new services—much more quickly and successfully.

About the Authors

John DeVine is a principal in McKinsey’s Miami office, Shyam Lal is a director in the San Francisco office, and Michael Zea is a principal in the Stamford office.

Culture Eats Strategy For Lunch

2012-01-26T18:47:00.001-08:00

Get on a Southwest flight to anywhere, buy shoes from Zappos.com, pants from Nordstrom, groceries from Whole Foods, anything from Costco, a Starbucks espresso, or a Double-Double from In N' Out, and you'll get a taste of these brands’ vibrant cultures.

Culture is a balanced blend of human psychology, attitudes, actions, and beliefs that combined create either pleasure or pain, serious momentum or miserable stagnation. A strong culture flourishes with a clear set of values and norms that actively guide the way a company operates. Employees are actively and passionately engaged in the business, operating from a sense of confidence and empowerment rather than navigating their days through miserably extensive procedures and mind-numbing bureaucracy. Performance-oriented cultures possess statistically better financial growth, with high employee involvement, strong internal communication, and an acceptance of a healthy level of risk-taking in order to achieve new levels of innovation.

Misunderstood and mismanaged

Culture, like brand, is misunderstood and often discounted as a touchy-feely component of business that belongs to HR. It's not intangible or fluffy, it's not a vibe or the office décor. It's one of the most important drivers that has to be set or adjusted to push long-term, sustainable success. It's not good enough just to have an amazing product and a healthy bank balance. Long-term success is dependent on a culture that is nurtured and alive. Culture is the environment in which your strategy and your brand thrives or dies a slow death.

Think about it like a nurturing habitat for success. Culture cannot be manufactured. It has to be genuinely nurtured by everyone from the CEO down. Ignoring the health of your culture is like letting aquarium water get dirty.

If there's any doubt about the value of investing time in culture, there are significant benefits that come from a vibrant and alive culture:

Focus: Aligns the entire company towards achieving its vision, mission, and goals.
Motivation: Builds higher employee motivation and loyalty.
Connection: Builds team cohesiveness among the company’s various departments and divisions.
Cohesion: Builds consistency and encourages coordination and control within the company.
Spirit: Shapes employee behavior at work, enabling the organization to be more efficient and alive.

Mission accomplished

Think about the Marines: the few, the proud. They have a connected community that is second to none, and it comes from the early indoctrination of every member of the Corps and the clear communication of their purpose and value system. It is completely clear that they are privileged to be joining an elite community that is committed to improvising, adapting, and overcoming in the face of any adversity. The culture is so strong that it glues the community together and engenders a sense of pride that makes them unparalleled. The culture is what each Marine relies on in battle and in preparation. It is an amazing example of a living culture that drives pride and performance. It is important to step back and ask whether the purpose of your organization is clear and whether you have a compelling value system that is easy to understand. Mobilizing and energizing a culture is predicated on the organization clearly understanding the vision, mission, values, and goals. It's leadership’s responsibility to involve the entire organization, informing and inspiring them to live out the purpose the organization in the construct of the values.

Vibrant and healthy

Do you run into your culture every day? Does it inspire you, or smack you in the face and get in your way, slowing and wearing you down? Is it overpowering or does it inspire you to overcome challenges? It's important to understand what is driving your culture. Is it power and ego that people react to, and try to gain power, or a culture of encouragement and empowerment? Is it driven from top-down directives, or cross-department collaboration? To get a taste of your culture, all you have to do is sit in an executive meeting, the cafe or the lunch room, listen to the conversations, look at the way decisions are made and the way departments cooperate. Take time out and get a good read on the health of your culture.

Culture fuels brand

A vibrant culture provides a cooperative and collaborative environment for a brand to thrive in. Your brand is the single most important asset to differentiate you consistently over time, and it needs to be nurtured, evolved, and invigorated by the people entrusted to keep it true and alive. Without a functional and relevant culture, the money invested in research and development, product differentiation, marketing, and human resources is never maximized and often wasted because it's not fueled by a sustaining and functional culture.

Look at Zappos, one of the fastest companies to reach $1 billion in recent years, fueled by an electric and eclectic culture, one that's inclusionary, encouraging, and empowering. It's well-documented, celebrated, and shared willingly with anyone who wants to learn from it. Compare that to American Apparel, the controversial and prolific fashion retailer with a well-documented and highly dysfunctional culture. Zappos is thriving and on its way to $2 billion, while American Apparel is mired in bankruptcy and controversy. Both companies are living out their missions--one is to create happiness, and the other is based on self-centered perversity. Authenticity and values always win.

Uncommon sense for a courageous and vibrant culture

It's easy to look at companies like Stonyfield Farms, Zappos, Google, Virgin, Whole Foods, or Southwest Airlines and admire them for their passionate, engaged, and active cultures that are on display for the world to see. Building a strong culture takes hard work and true commitment and, while not something you can tick off in boxes, here are some very basic building blocks to consider:

Dynamic and engaged leadership
A vibrant culture is organic and evolving. It is fueled and inspired by leadership that is actively involved and informed about the realities of the business. They genuinely care about the company's role in the world and are passionately engaged. They are great communicators and motivators who set out a clearly communicated vision, mission, values, and goals and create an environment for them to come alive.
Living values
It's one thing to have beliefs and values spelled out in a frame in the conference room. It's another thing to have genuine and memorable beliefs that are directional, alive and modeled throughout the organization daily. It's important that departments and individuals are motivated and measured against the way they model the values. And, if you want a values-driven culture, hire people using the values as a filter. If you want your company to embody the culture, empower people and ensure every department understands what's expected. Don't just list your company’s values in PowerPoints; bring them to life in people, products, spaces, at events, and in communication.
Responsibility and accountability
Strong cultures empower their people, they recognize their talents, and give them a very clear role with responsibilities they're accountable for. It's amazing how basic this is, but how absent the principle is in many businesses.
Celebrate success and failure
Most companies that run at speed often forget to celebrate their victories both big and small, and they rarely have time or the humility to acknowledge and learn from their failures. Celebrate both your victories and failures in your own unique way, but share

IT – In the Pink of Indian Healthcare

2012-01-12T19:29:00.000-08:00

IT – In the Pink of Indian Healthcare

My take on the current state of India's healthcare sector, the challenges, and the road ahead.

Monday, January 09, 2012

Healthcare is one of India's critical sectors - in terms of providing care to patients and also providing employment to the community. It's not surprising that the Indian Healthcare sector currently represents a USD 40 billion industry.

Challenges

Despite technology's many benefits, the use of IT in the Indian healthcare industry is far less as compared to sectors such as banking or travel. The country has several world-class medical facilities, but these fall woefully short of meeting the needs of the 700 million Indians living in suburban and rural India.

One of the biggest challenges facing the wide spread implementation of IT is the steep price of technology. Huge initial investments and a difficult to measure return-on-investments (ROI) curb the penetration rate of IT. For example, despite the growing number of private hospitals, the cost of hospital information systems (HIS) solutions is high and is a restraining factor for the hospitals to implement IT.

The path ahead

Across the world IT has made and will continue to make significant difference in patient care. From diagnosis, investigation and documentation to treatment, retrieval of information and research, IT can significantly bridge the gap between India's healthcare potential and it's actual deliveries.

One such technology is telemedicine: the remote diagnosis, monitoring and treatment of patients via video conferencing or the Internet. Telemedicine is a fast-emerging trend in India, supported by exponential growth in the country's information and communications technology (ICT) sector, and plummeting telecom costs.

With the introduction of 3G, the possibilities of remote treatment and diagnosis of patients through mobile phones have been strengthened. Today, the number of cell phone users in India stands at approximately 600 million, with a projected increase of 20 million each month. Some telecom operators and value-added service developers are considering usage of mobile phones for diagnostic and treatment support, remote disease monitoring, health awareness and communication.

A booming healthcare insurance scenario is also paving the way for hospitals to afford using technologies such as HIS and EMR. Health Insurance has posted tremendous growth in the last two fiscals, with health insurance premium expected to grow at a CAGR of over 25 per cent for the period spanning from 2009-10 to 2013-14. Analysts believe this will not only aid growth in number of hospitals, but also IT implementation in healthcare.

DNA Health

Whose experience is it anyway?

The human factor in service design

Focus on the human side of customer service to make it psychologically savvy, economically sound, and easier to scale.

In This Article

Three questions

1. How human is our service?

2. How economic is our service?

3. Can our people scale it up?

Postscript: Organizing for action

About the Authors

Culture Eats Strategy For Lunch

IT – In the Pink of Indian Healthcare