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.”

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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.

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