March 31, 2010

Technology to improve service - Cleveland Clinic Edition


Cleveland Clinic has been well known for some time as progressive in terms of customer experience, something that sets them apart from many health care providers. Recently I ran into this video clip (you may have to watch a short advisement before you get to the actual report):


I particularly like the pitch into the segment where the reported says that a visit to the hospital can be "an intimidating place when you're sick and you're scared." At first blush, it is not clear why a patient tracking system could put someone at ease during a hospital stay. However, I see 2 things that the GPS system can do to improve service delivery:

  1. It tracks how long a customer has been waiting in specific rooms.

    With this data, the hospital can improve scheduling and staffing in order to reduce the wait time. Not all wait times are created equal , and often the most annoying are those waiting around in a cold, sterile room in a hospital gown waiting for the doctor to arrive. This system will give the administrators a better idea of what the true capacity is under different levels of staffing.

  2. It indicates which rooms could be filled or need attention.

    In many businesses, the constraint is often the physical space need to perform the service. For example, restaurants are interested in table turns per night, and hotels are interested in occupancy percentage. With this new data, the hospital will be able to track occupancy to a degree never before realized. If the process constraint becomes the examination rooms, they can put efforts into turning rooms more quickly in order to see more patients.


These two points should lead to a reduced wait time for patients. Still, I'm unsure how that can reduce my anxiety. Perhaps there could also be some psychological benefit of knowing that the hospital is tracking where I am and I won't be forgotten about.


Can you see any other benefits to the GPS tracking system?


This is probably a large investment to have this "airport control tower"; does the value justify the cost? I wonder how they track an improvement in patient satisfaction or patient thru put to justify its costs.




March 23, 2010

Experience Economy Everywhere – Movie Theater Edition

Creating an experience often involves multiple senses: touch, taste, feel, smell, etc. For example, Mrs. Fields Cookies is constantly cooking small batches of cookies all day in order to entice mall patrons to come into their store. The powerful aroma of fresh baked cookies triggers emotional responses that remind customers of long lost childhood.

I have found that service firms would do well looking to the entertainment industry for ideas on how to achieve these experiences.

From Mental Floss:

"You've probably noticed by the abundance of funny glasses available at your local Cineplex lately that 3D technology is the latest gimmick to become all the rage at movie theaters. It's only the first in a long line of techniques aimed at getting movie patrons in theater seats. Here are a few others."

My favorite is the "Light Tricks" used in the movie "Wait until dark":

"in the movie, there's a part where Audrey's character breaks all of the light bulbs in her apartment and shuts all of her window blinds so she is hidden in complete darkness. As she goes around the place breaking bulbs, theater employees dimmed the lights one by one and eventually turned them all off completely, plunging the theater into total darkness."

The visual appeal of having the lights in the theater go out as it happens in the movie makes the show feel alive and enhances the experience of the theater. I have yet to see it, but many of my friends have said that the 3-d effects in the film Avatar have similar effects. Watching these films at home doesn't have the same impact. These types of experiences are keeping movie goers attending theaters instead of just waiting to rent films and watch them at home. The experience of watching it in the theater has value and is worth the extra cost.

Read the others examples here.

What other similar attempts to create an experience have you seen? Leave a comment.


March 15, 2010

Assorted Links

Experience Economy – T.V. Edition    NY Times:
    "But something more powerful, and probably less intimate than having a laugh with your pals, is under way. The act of typing is an intellectual one and     creates a distance on the part of the viewer: social media lets us pretend we're not wallowing in low culture."
    "You are not just watching something. You are taking ownership of it by writing about it," said Michael Hirschorn, a former VH1 executive who now has his     own production company. "And television is responding in its own way. A show like 'The Bachelor' is clearly produced to generate opinions, pro and con.     It's sort of stupid in a very smart way, purposefully deadpan, made to provoke people."

Experience Economy – Bookstore Edition
    From Seth Godin:
    "But independent bookstores can leverage their historical advantage: organizing and leading tribes of people who are focused and motivated to engage     with each other and buy (yes, buy) books (from you!). Serving coffee isn't the answer. Creating a coffeehouse culture where ideas spread virally is."

Airlines digressing to unbundled fares

    "Both the airlines and mobile phone companies ensure comparison shopping difficult. In absence of easily comparable items it is nearly impossible to     predict what the total cost would be to the consumer. Choosing under these circumstances means we are making a decision under manufactured     uncertainty, which leads consumers to fall back on our (often) imperfect heuristics. Of course, this is exactly want the airlines and mobile phone     companies want because they have a better idea about how your brain will make decisions than you do and can use this to their advantage. "

Healthcare innovations via HBR: interesting most are process innovations not medical innovations

Southwest Battle Cry!


March 11, 2010

Plan on the unexpected - Johnson and Johnson Edition

I took a group of MBA and M-Eng students to Johnson and Johnson Ortho Clinical Diagnostics in Rochester today.  This plant assembles large medical laboratory chemistry testing machines as well as the consumables products used in medical lab testing (chemicals, chemical slides).  The large testers are very complex and very expensive and so they are coupled with a service contract.  

The highlight of the trip for me was to see their "e-Connectivity™ Interactive System Management" or  predictive maintenance service system that track in real time newer models' operational metrics and can predict if a machine is on the verge of failing.  The machines are connected via a VPN to the Rochester plant where a team of service engineers and specialist sit in a war room with a huge interactive map with color coded flags represent nearly 2000 separate machines world wide.  If a flag is green or yellow there is not much to worry about, but if the flag turns to orange, the team can immediately create control charts of the past performance of the machine and identify when things started to slip.  They then deploy their field service technicians and peform preventive maintenance.  With this system in place J & J is able to know about a potential problem well before their customer recognizes it saving J & J the cost of emergency, high cost repair and saving their customer down time.  

These machines are very complicated and are a major capital investment for medical laboratories so J & J is trying to create an experience of reliability and a sort of  "we got your back" feeling that can set their customers at ease.  Also, J & J is doing a good job taking their learning from after-sales service and putting it into their manufacturing design, a sort of "Design for Serviceability" model or maybe a "Design for Predictive Maintenance" as they identify more and more of the top issues of break downs and find ways to proactively capture machine performance metrics that can be used to predict failure.

Adding a service to a manufactured good is becoming a source of competitive advantage. This sort of planning for lapses in reliability can add real value to a product and be difficult to replicate by competitors.  Plus, it means that you get to put up a war room in your manufacturing plant... cool...

March 10, 2010

Plan on the unexpected - UPS edition

Service firms have to deal with constant variability and unexpected events.  One approach is to reduce the variability and take steps to error proof the process in order to ensure unexpected events don’t happen.  This is not always possible, so another approach is to manage operational risk by planning for the unexpected by actively and dynamically making course changes.

From the UPS Blog:

With recent weather events crisscrossing the United States, UPS has been in overdrive managing its network to ensure on-time delivery of time sensitive packages. Events such as snow storms, mechanical failures or crew illnesses can cause daily challenges, but it’s all in a day’s work for the UPS Airlines contingency team.”

video embedded

Customer facing situations certainly require a similar level of flexibility and pre-planning.  A good read on the subject is Booz’s  article titled “ The Empathy Engine

To capture this broader conception of customer service, we introduce the Empathy Engine.  In the Empathy Engine, senior leaders, managers and frontline employees work together to collectively stand in their customers’ shoes in order to better understand and resolve customer needs.

            Specifically, Empathy Engine companies consistently strive to:

·         Understand and resolve customers’ problems at minimum cost to customers
·         Create a company-wide culture of empathy
·         Empathize with and give decision-making power to their frontline employees so they can focus on generating excellent customer service”

There is much more, but the crux of the story is that good service firms anticipate when a problem might arise and try to make corrections before having a service failure.

Do you have any examples of contingency planning that leads to better customer service?  Leave a comment.

March 9, 2010

Can Custodians Make Magic?

If they work for Disney they can:

Embedded video above

Certainly Disney is the poster child of allowing all it employees  cast members to be involved in creating the guest experience.   From the perspective of the Service Profit Chain, allowing custodial staff to be involved in the magic that is Disney improves the employee's satisfaction with their job which leads to increased customer satisfaction and ultimately profitability.  No longer do they just sweep up trash, but instead they can create a piece of art on the ground and greet guests as they arrive the park. 

I recently took a class of MBA students to tour a Renaissance Hotel in New Jersey.  Renaissance is a part of the Marriott brands of hotels and feels that is has become indistinguishable from the a full service Marriott.  So, they are re-branding themselves as a "Life Style" brand.  Part of this includes changing the language and the job titles that are normally given.  Instead of housekeepers they have "Room Stylists."  Hopefully for them, this change is more than just semantics, but might actually allow housekeeping staff to feel a greater part of the customer experience.

Do you have any other examples of service employees whose role is usually quiet and not noticed by customers who have been able to see their value in experience creation?  Make a comment.

March 8, 2010

You can have my blood, but please don’t take my time

Recently I was contacted by a volunteer from the American Red Cross and asked to sign up to donate blood during a blood drive on campus. I have donated blood several times during my life and have never had a reason to turn down such requests, so I signed up for a 1:30 pm appointment on a Monday. I arrived at 1:30 pm sharp and started the process of the donation. Their website recognizes the 4 step process to donation:

  1. Registration: read about the donation process and eligibility requirement.
  2. Health History and Mini Physical: personal health history questions, temperature, blood pressure, etc.
  3. Donation: Approximately 1 pint of blood is drawn from your arm
  4. Refreshments: Spend a few minutes eating sweets and drinking fluids

Again, from their website: “The donation process, from the time you arrive until the time you leave takes about an hour. The donation itself takes about ten minutes.” From a purely process management standpoint, this statement might raise an eyebrow. If it only takes 10 minutes to draw the blood, why do donors have to spend an hour to donate? The other three process steps surely don’t take 50 minutes. Answer: there is a lot of waiting done by the donors. In my case the process took nearly two hours while the donation itself took about three minutes.
I had lot of time thinking about their process and had a hard time not seeing potential process improvements during my long wait
Reservation/Appointment Management: As I arrived, there were about 8 donors in front of me in the registration area. It appeared that there were two separate appointment books: one from the phone calls made by a regional headquarters and one from the local blood drive supporters. My guess is that they did not synchronize the two appointment books and overbooked. In addition, they were taking walk-ins and everyone was served on a first come first serve basis; reservations did not get any priority over walk-ins.

Bottleneck and Capacity Management: With a quick glance to the donation process area, I saw six beds. If the actual donation time takes an average of ten minutes, then the capacity of the donation process is 6 beds * 60 minutes in an hour divided by 10 minutes per donation = 36 donations per hour assuming the area is properly staffed. The health history/ mini physical area also has enough space for 6 donors being service at one time and a 10 minutes average time for this process is probably reasonable. However, there was only 1 dedicated employee in this area restricting the capacity down to 6 donations per hour.

Labor Scheduling & Capacity Planning: At 1:30 employees were coming and going taking lunch breaks. I suspect that the reason there was only 1 staff member working the health history / mini physical step was because someone was on break. Labor scheduling is essentially matching system capacity with expected demand. In the case of a blood drive, the expected demand could be managed by allowing for more appointments during fully staffed times and less appointments during periods of breaks (e.g., lunch time); however, it appeared that blood drive volunteers were asked to find the same number of donors for each time period, e.g., for each half hour block find 4 donors. Perhaps the actual capacity during periods of full staff is higher than what they ask for and much lower during lunch times. This means that donors in the morning and late afternoons will be serviced very fast (maybe 30 to 40 minutes) while the donors during the lunch hours can expect long queues and much longer waits (like mine: 2 hours). The average wait may indeed be 1 hour but the variability in what is experienced by donors varies widely. Perhaps the American Red Cross tries to determine its daily capacity and asks blood drive volunteers to fill this uniformly throughout the day; however, labor scheduling forces the capacity to fluctuate throughout the day and reservations should be scheduled to match the capacity fluctuations.

What is the goal?
Again, according to their website, the number 2 reason people don’t donate after “I don’t like needles” is “I’m too busy”. Only 43% of donors are “repeat and loyal donors.” Perhaps a large percentage of the remaining 57% realized that they didn’t like needles after their first donation, but certainly some of them stopped coming because they were “too busy” which is a nice way of saying “it takes too long”. Blood is highly perishable and donations are needed every day in order to maintain adequate supply for medical patients who need blood. A top priority for the American Red Cross should be to increase the percentage of loyal donors in order to maintain the need blood supply. Any marketer will tell you it is easier and cheaper to maintain an old customer than to win a new one; however, the American Red Cross spends a great deal of its effort in finding new donors.
How can the principles of operations management improve donor loyalty?

Where was the bottleneck in my process? Where should it have been if donations where to me maximized?

What could the American Red Cross do to manage their appointment system better? How could they handle walk-ins?

The blood donation process:
Top 10 reason people don’t give blood:
50 quick facts about donating blood (including loyalty percentages):

This was originally posted as a guest blog here.