Showing posts with label risk aversion. Show all posts
Showing posts with label risk aversion. Show all posts

Sunday, October 5, 2014

When patience is not a virtue

Patience is a virtue. Indiscriminate application of patience is not.

When waiting for an egg to hatch, patience is our friend. Trying to get the chicken (or the lizard) out early isn't going to avail us much. On the other hand, watching a customer service agent go through our case in slow motion is definitely not a fit case for patience.

As processes and personal risk-avoidance become dominant, poor service and undue delays have become an epidemic not only in the government but also in the private sector. References to “process poison” and “process anesthesia” are not exceptions any more. Process-designers, instead of focusing on the service quality or timely outcome, quite often seem to emphasize due diligence and checks-and-balances, much to the delight of the auditors instead of customers.

People and their attitudes are important too. Having a stake in the outcome helps. Well-motivated individuals can delight customers despite process hurdles. Those who don't care, routinely take shelter in inane provisions despite well-designed processes.

That brings up two questions:

What if we teach discretion and application of thought to our children? That'll make them ask tough, uncomfortable questions. It would still be worth the trouble in the long run.

What if we reject patience as a virtue? It will need some discretion. It will be harder to do when we have something to lose; or when we need to get on with other things, but it will make a huge difference. Even the simple act of letting someone know that their behaviour is not acceptable will trigger a natural human behavioural change. Not everyone has a vested interest in tormenting us; those people will surely change for the better.

But then, can we overcome the other virtue we are taught alongside patience, such as unquestioning obedience?

Saturday, October 27, 2012

Designed to be ordinary

Are your processes designed to be ordinary? Even when you have a chance to be Extra-Ordinary?

It is a question that is worth asking. At the heart of this matter are other related questions:
Whose job is it to design the processes? Are they trained to "give extra-ordinary service" or merely "make sure there aren't any loopholes and liabilities (or extra work, even)"?

Here are some quick examples from my personal experiences:
Premium Car Salesman (Process written by Accountants): "Sir, we can't accept cheques. Even if it is a company cheque. The accounts department won't accept it".
>> Result: After spending 3 full days selling me the car; and after I wrote him a cheque, lost it in 3 minutes. Competitor closed the sale the next morning, delivered the car and cashed the cheque (100% payment) within an hour. 
American Express No Limits Charge Card Customer Service (Process written by Risk Managers): "Sir, I can see from your history that you've been our customer with an impeccable record for 6 years. But we consider your last purchase a risky one - even though it is within your normal spending levels - and the process requires an interim payment before we let you use the card again".
>> Result. I've not only cancelled the card; but also declined all Amex offers for the last 12 years. I doubt I'll ever be their customer again.
See the pattern? The persons in front of the customer could see that their process hindered their business. But they were not empowered by their company to delight a customer / close a deal. They were well within their rights to do what they did. Just as I am well within my rights to reject them.

Pure desk jockeys make poor process designers - no matter their fancy designations. Your processes should be written (and constantly reviewed) by people who interact with customers on a daily basis.

You should hire smart people to interact with customers (sales, service, ...). Empower them to take decisions that delight the customer. Educate them about risks and hand them the risk-evaluation tools and help them to make good decisions. Most importantly, track their successes and learn from the kind of decisions they are making to help customers.

You might take a hit occasionally; but you will stand an excellent chance to be extra-ordinary. Alternatively, you might just want stick to ordinary. Reject mediocrity or accept it. Your choice.

Disclosure: This post was prompted by the behavior of American Airlines agents at Las Vegas who let 3 opportunities to help me pass by even as I asked for help repeatedly; and when I finally missed my flight, acted as they were trained:
"Be polite, stick to the process and avoid any liability at-all-costs"
That is how I will remember them for ever.

Saturday, February 25, 2012

Government outsourcing ailments in IT

Governments outsource IT / IT-related projects for three broad reasons:

  1. Risk taking ability, work ethic, ability to deliver results
  2. Superior technical skills
  3. Work needs more people than the government has
It is surprising then, that having set out to outsource, the government procurement processes are tuned to kill two of the three reasons for outsourcing. Here is how:
  • By laying down stringent (often one-sided) conditions, penalties and an overall attitude of "we don't trust you or your work ethic"; the bidders are often scared stiff into risk aversion.
  • By insisting that they work to government procedures and work-style - convert the vendor's employees to government work ethic
  • By insisting that vendor's technical work be reviewed and evaluated by internal / NIC people (see #2 above!)
  • By weighing most projects towards the lowest-bidder. Even where QCBS is touted as the method, pseudo experts and lame duck consultants water it down to elaborate tabulations in the name of objectivity.
  • By causing project delays with interminable paper work, refusing to accept responsibility for the delays and needlessly harassing vendors for payments.
The private sector, over the years seems to have adapted well. Effectively killing their own competencies. 
  • Bid management teams are nearly exclusively focused on "winning the deal" - at any cost. Often this requires convenient interpretations of the requirements and taking short cuts that can "later be rationalized". As a result, #1 is left out in the lurch. Project outcomes are sacrificed at the altar of "win the bid first". 
  • Blame the government and its procedures for all their compromises. Surely the government isn't innocent. But then, what about business ethics?
  • Experts cost money. Good tools, technologies and methods cost money. Money that wasn't included in the bid. 
All this leaves only one reason to outsource. Not work ethic. Not result orientation. Not technical competencies. "#3: Work needs more people than the government has". Situation has deteriorated so much that it is not easy to recover from this downward spiral.

To get out of this quagmire, perhaps we could try:
Private sector reform its bid management approach. Bid to compete as much on quality as on price. 
Government stop trivializing technical evaluation. Hire experts and find ways to give weight to their opinion.

One last point for emphasis. Hundreds of technical evaluation criteria achieve only one thing. Unsurprisingly, that is not "best technical bid". They ensure that bids with glaring weaknesses in several areas can still get through - as long as they bid "some standard stuff". One would think that such an obvious possibility would've been apparent to all.

I would like to hear from you all - on what you think is wrong; and how you think they can be fixed.

Thursday, August 4, 2011

Dealing with unknowns

I am not sure what we are getting into. Let's not risk it!

We've all heard variations of this countless times. Yet, I'd think management pundits - nay practitioners, would've figured the best way to deal with the fear of the unknown. Yet, I find that this fear plagues management echelons in both the public and the private sector - in ever increasing proportions. 

Here is an example of how decisions with unknowns are taken routinely, based on "playing it safe".

Scenario #1: Data Confidentiality
A asks for some data that B has. B is not sure whether there are any provisions governing sharing of this data. Instead of finding out whether there are, he simply declines - quoting the contract governing the data. A, not knowing better, returns empty handed.

What happened later: 
A requests for a copy of the contract in question. Finds that the contract has not only expired 3 years ago, but never had any provisions of confidentiality at any time. When A shows this to B, he reacts defensively. "Well I never read the contract, but C told me that we had a contract. How can I be sure that I won't be sued for this? Who gave you the copy of the contract anyway?" 

Instead of saying "I don't know for sure, so let me play safe", B could've said "I don't know for sure; let me find out - and then I'll know whether I am doing the right thing".

Scenario #2: Decision on a new proposal
The board of company X is meeting. One of their executives E has presented to them a novel idea that needs an significant investment. One of the board member reacts "What about security? Have you considered that?". E explains to them how security is addressed in the new proposal. "But what about the market reaction? How will the competitors react? They are not going to sit tight you know?". E agrees that as with any new proposal, there are some unknowns. However, the best projections they have, show that success is the most likely outcome. After a few more interactions like this, it becomes clear. The board member does not have enough knowledge of the market - and would decide based on his fear of the unknown. 

While it may be argued that E may have done a bad job of explaining / selling the idea; it is also clear that when facing the unknown, it is important to seek more information; specific information that puts the fear in perspective

It is quite like hesitating to enter a dark room. Rather than opt-out, it is much simpler to seek the switch to the light bulb and turn it on. The light thrown gives a name to the fear. It clarifies that you need not fear unknown ghosts but the object in the way that you might trip on. Similarly, seeking information and giving a name to the fear, throws light into the darkness - and reduces the tendency to adopt "default decisions". 

However, I see more and more decision makers taking the easy way out. This, I believe is influenced - apart from other factors - both by the work culture osmosis that I wrote about earlier; as well as the declining inherent knowledge levels and compensating lack of application of adequate logic - also written about in re-engineered by google.

Sadly, the consulting industry, who are supposed to help managers out in such circumstances are themselves impacted by these factors - further contributing to this scenario. 

I wonder whether there is a simple fix to this malady. Of course, I could, in all my ignorance, do the typical Indian thing and say: "I don't know, but hey, I am sure things will surely turn around" (hope, the big remedy) or even "C'mon, things are not as bad as you say" (deny the unknown!).