How Non-Fatal Errors contributes to decrease in Quality?

Many customer contact centers report quality performance that they believe is acceptable.  However, high performance centers have found that in order to drive real business performance — customer satisfaction improvement and reduction in costly errors — they have to rethink how they measure and report Quality.

i have consulted  three customer contact centers on this topic.  A key finding: The best centers distinguish fatal from non-fatal errors — they know that one quality score doesn’t work!

However, most centers have just one quality score for a transaction (a call, an email, etc.) and they establish a threshold that they think is appropriate.  For example, one center’s quality form has 25 elements (many are weighted differently) with a passing grade of 80%.  This approach is typical, but it doesn’t work to drive high performance.

High performance centers create a distinct score for both fatal (or critical) and non-fatal (or non-critical) errors.  This enables them to (a) focus on fixing those errors that have the most impact on the business, and (b) drive performance to very high levels.

In my previous Blog about “Transactional Quality”, i have explained about Fatal and Non-Fatal Errors

What Is A Fatal Error?

We find that there are at least six types of fatal errors, which fall into two categories.  The first category includes those things that impact the customer.  Fatal errors in this category include:

1.  Giving the customer the wrong answer.  This can be further divided into two types:

• The customer will call back or otherwise re-contact the center.  This is the “classic” fatal error.

• The customer does not know they received the wrong answer (e.g., telling the customer they are not eligible for something that they are, in fact, eligible for).

2.  Something that costs the customer unnecessary expense.  An example would be telling the customer that they need to visit a retail store when they could have handled the inquiry over the phone.

3.  Anything highly correlated with customer satisfaction.  We find that first-call resolution is the single attribute most often correlated with customer satisfaction, although attribute correlations are different for different businesses (e.g., one center found that agent professionalism was the number-two driver of customer satisfaction—unusual given that professionalism is typically a non-fatal attribute).

The second category includes the next three fatal errors — those things that affect the business:

4.  Anything illegal.  The best example of this is breach of privacy (e.g., a HIPAA violation in a healthcare contact center, or an FDCPA violation in a collections center).

5.  Something that costs the company.  A good example is typing the wrong address into the system, which then results in undelivered mail.  This is another “classic” fatal error.

6.  Lost revenue opportunity.  This is primarily for a sales or collections center.

So… What is a Non-Fatal Error?

Non-fatal errors can be considered as annoyances.  These typically include misspellings on emails and what is often referred to as “soft skills” (using the customer’s name, politeness, etc.) on the phone.

If they are annoyances, then why spend time tracking them?  Because too many non-fatal errors can create a transaction that is fatally defective.  One misspelling or one bad word choice on an email probably won’t even elicit a response from a customer, but multiple misspellings, bad word choices, bad sentence structures, etc. will cause the customer to think that the substance of the email is likely incorrect.

What’s the Right Way to Score?

In a high performance center, one fatal error will make the entire transaction defective.  There is no middle ground.  So, the score for the center at the end of the month is simple—it’s the number of transactions (e.g., calls) without a fatal error divided by the number of transactions monitored.

So, what happens in a center that changes from the traditional scoring to the more accurate “one fatal error = defect” scoring.  This center thought that their quality performance was good.  However, when they re-scored, they found that the percentage of transactions with a fatal error ranged from 2%-15%, with the average at about 10%.  This was a real shock to the executives who had been used to hearing that their quality was around 97%.

Where Did Six Sigma Come From?

As with Lean, we can trace the roots of Six Sigma to the nineteenth-century craftsman, whose challenges as an individual a long time ago mirror the challenges of organizations today. The craftsman had to minimize wasted time, actions, and materials; he also had to make every product or service to a high standard of quality the first time, each time, every time.

Quality Beginning

The roots of what would later become Six Sigma were planted in 1908, when W. S. Gosset developed statistical tests to help analyze quality data obtained at Guinness Brewery. About the same time, A. K. Erlang studied telephone traffic problems for the Copenhagen Telephone Company in an effort to increase the reliability of service in an industry known for its inherent randomness. It’s likely that Erlang was the first mathematician to apply probability theory in an industrial setting, an effort that led to modern queuing and reliability theory. With these underpinnings, Walter Shewhart worked with Western Electric (a forerunner of AT& T) in the 1930s to develop the theoretical concepts of quality control. Lean-like industrial engineering techniques did not solve quality and variation-related problems; more statistical intelligence was needed to get to their root causes. Shewhart is also known as the originator of the Plan-Do-Check-Act cycle, which is sometimes ascribed to Dr. Edwards Deming, Shewhart’s understudy. As the story goes, Deming made the connection between quality and cost. If you find a way to prevent defects, and do everything right the first time, you won’t have any need to perform rework. Therefore, as quality goes up, the cost of doing business goes down. Deming’s words were echoed in the late 1970s by a guy named Philip Crosby, who popularized the notion that “quality is free.”

Quality Crazy

War and devastation bring us to Japan, where Deming did most of his initial quality proselytizing with another American, Dr. Joseph Juran. Both helped Japan rebuild its economy after World War II, consulting with numerous Japanese companies in the development of statistical quality control techniques, which later spread into the system known as Total Quality Control (TQC).

As the global economy grew, organizations grew in size and complexity. Many administrative, management, and enabling functions grew around the core function of a company to make this or that product. The thinking of efficiency and quality, therefore, began to spread from the manufacturing function to virtually all functions— procurement, billing, customer service, shipping, and so on. Quality is not just one person’s or one department’s job. Rather, quality is everyone’s job! This is when quality circles and suggestion programs abounded in Japanese companies: no mind should be wasted, and everyone’s ideas are necessary. Furthermore, everyone should continuously engage in finding better ways to create value and improve performance. By necessity, quality became everyone’s job, not just the job of a few … especially in Japan, at a time when there was precious little money to invest in new equipment and technology.

The rest of the story might be familiar if you’re old enough to remember. By the late 1970s, America had lost its quality edge in cars, TVs, and other electronics— and they were suffering significant market share losses. Japanese plants were far more productive and superior to American plants, according to a 1980 NBC television program, If Japan Can Why Can’t We? In response to all this, American companies took up the quality cause. They made Deming and Juran heroes, and institutionalized the Japanese-flavored TQC into its American counterpart, Total Quality Management (TQM). They developed a special government award, the Baldrige Award, to give companies that best embodied the ideal practice of TQM. They organized all the many elements and tools of quality improvement into a teachable, learnable, and doable system— and a booming field of quality professionals was born.

Quality Business

The co-founder of Six Sigma, Dr. Mikel Harry, has often said that Six Sigma shifts the focus from the business of quality to the quality of business. What he means is that for many years the practices of quality improvement floated loosely around a company, driven by the quality department. And as much as the experts said that quality improvement has to be driven and supported by top executives, it generally wasn’t. Enter Jack Welch, the iconic CEO who led General Electric through 2 decades of incredible growth and consistent returns for shareholders. In the late 1980s, Welch had a discussion with former AlliedSignal CEO Larry Bossidy, who said that Six Sigma could transform not only a process or product, but a company. In other words, GE could use Six Sigma as AlliedSignal was already doing: to improve the financial health and viability of the corporation through real and lasting operational improvements. Welch took note and hired Mikel Harry to train hundreds of his managers and specialists to become Six Sigma Black Belts, Master Black Belts, and Champions. Welch installed a deployment infrastructure so he could fan the Six Sigma methodology out as widely as possible across GE’s many departments and functions. In short, Welch elevated the idea and practice of quality from the engineering hallways of the corporation into the boardroom. Lest we not be clear, the first practical application of Six Sigma on a pervasive basis occurred at Motorola, where Dr. Harry and the co-inventor of Six Sigma, Bill Smith, worked as engineers. Bob Galvin, then CEO of Motorola, paved the way for Bossidy and Welch in that he proved how powerful Six Sigma was in solving difficult performance problems. He also used Six Sigma at Motorola to achieve unprecedented quality levels for key products. One such product was the Motorola Bandit pager, which failed so rarely that Motorola simply replaced rather than repaired them when they did fail.

The Machine that Changed the World

Who are you when you get your B.A. in political science from the University of Chicago, a Master’s from Harvard in transportation systems, and a Ph.D. in political science from MIT?

You guessed it: James Womack, the one who coined the term “Lean Manufacturing” with co-author Daniel Jones in their landmark book, The Machine That Changed the World (1990). While Womack’s education is in political science, his doctoral dissertation and subsequent work was focused on comparative industrial policy in the United States, Germany, and Japan. That’s how he developed his extensive knowledge and relationships for writing his 1990 book and his follow-up book, Lean Thinking, in 1996.

Womack’s Lean Principles are as follows:

1. Value— Act on what’s important to the customer of the process.

2. Value stream— Understand which steps in the process add value and which don’t.

3. Flow— Keep the work moving at all times and eliminate waste that creates delay.

4. Pull— Avoid making more or ordering more inputs for customer demand you don’t have.

5. Strive for perfection— There is no optimum level of performance; just continually pursue improvements.

While Ohno and Toyota built the house of Lean brick by brick, and while many other companies have adopted TPS principles and practices, Womack brought it all together into a thinkable and deployable system. Womack’s work has also gone a long way in migrating Lean practices into the heart and soul of the entire enterprise, not just the manufacturing functions. Consequently, similar to the path of quality and Six Sigma, the business world has fully awoken to the undeniable fact that Lean is for banks and hospitals and service companies as much as it is for manufacturers.

A bank used Lean to reduce loan-approval processing time from 21 days to 1 day. A hospital reduced the average emergency room patient wait time from 100 minutes to 10 minutes without adding any staff. Southwest Airlines applied Rapid Changeover to achieve best-in-class gate turnaround times. If you have a process (and who doesn’t?), the principles of Lean apply. And who can we thank or acknowledge for this? Even more than the big names like Ford, Ohno, and Womack, we can thank the thousands of companies that stamped Lean’s imprint into their organizations. They are the true testament to Lean’s universal applicability.

So if you understand the principles and aims of Lean, how do you enact them? Typically, you implement Lean changes in your organization through a series of activities called Kaizen Events.