Category Archives: Where is the value?

Are You Delivering a Service or Simply Focusing on Systems?

Mid summer and I was sitting in a sweltering downtown office space. The organization that I was visiting has a policy that in order to save money and conserve energy they will not run the air conditioning systems on the weekend. The policy makes good sense. Conserve energy by not providing climate control during unneeded times, but the implementation of that policy lacks a few considerations:

1. Are the hours for use of the environments known?
2. Is the implementation focused on the systems or the outcomes?

Availability system vs service faulty
Availability system vs service faulty

At end of day Friday this organization shuts down the air conditioning for the weekend, and then brings the air conditioning systems back on line Monday mornings. The problem is that workers arrive to an unbearably hot work environment Monday morning, and it doesn't cool down until later afternoon.

Good policy
Conserve energy by not providing climate control during periods whe it is not needed.

Bad interpretation of policy
Conserve energy by not running the air conditioning system on weekends.

The differences in the two statements above are very subtle but important when put in practice. In the figure above, the bad interpretation results in lost worker productivity. I'm sure that it was never the intent to create a sweat shop.

Focus on customer service. If you are going to move to work of higher value, you really do need to identify what the resultant value is in terms of services received not simply systems operated.


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The Value of Creating Process or the Process of Creating Value?


The building I had planned to work in today had problems with its air conditioning so I elected to work in my home office. About an hour into my day, my air conditioner suddenly shut down along with all the power in the house.

I glanced outside to see the hydro lines bouncing and a construction crew scurrying about. Once the excitement was over they went back about their work. Using my keen problem management skills I ascertained that the root cause of my power outage was a line shorted by something hitting the power lines, and picked up the phone to report it.

That's when it dawned on me that the portable phones that we have require electricity to work. Fortunately I had cell phone coverage.

But wait, it gets better!

I called the utility company's automated attendant pressed one for this, two for that, and eventually my outage was recorded. I then received a message that if I had further information that would help them troubleshoot this incident, to stay on the line and speak with an attendant.

In mere moments an attendant responded and asked me the nature of my call, recorded all the same information that I had just entered, and then seemed uninterested in the vital information that I was able to provide on why the outage occurred so that they would be able to resolve the incident more quickly.

Only somewhat satisfied that I had done all I could do, I returned to work on my battery powered laptop computer, only to be interrupted by the house phone ringing somewhere off in the distance. Dashing from floor to floor, I discovered our only non-portable phone in the house that I had forgotten that we still had. On the other end of the line was a helpful person from the field service group informing me that there was a power outage on my street (big news). He said they had no idea why, and would be dispatching a crew. He speculated that that some animal must have crawled inside the distribution box.

I've had it! I'm packing up and finding a third location to work from today. I sure hope they have coffee, air conditioning and efficient process for service delivery...

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Elite Mazda in Gatineau offers higher value.


Q – Why is this picture relevant to this blog?

A – Because it illustrates service and focus on services rather than systems.

I have written about this many times before and it is the subject of one of my upcoming books. It is also one of the root causes of so many service problems that I am asked to help organization’s overcome.

In this instance, the business of the bus company has many facets, not simply running busses around town. The busses are the hardware, but without bus routes they would wander aimlessly or remain parked.

Why are those routes necessary? Ask the city planners, not the bus maintenance workers.

How can the bus service become more efficient? Ask the drivers, the maintenance workers and the city planners. Don’t forget to ask the customers.

How the bus company can maintain low rates is one example of the affects of efficiency, but there is a second facet. Increased revenues from other sources can offset expenses.

The bus in front of me supports two services. One service is designed to meet the rider’s needs, and the other to meet the needs of the advertiser (in this case a car dealer seeking a return on their investment).

The car dealer has taken a similar approach to growing their business and increasing profitability. The dealer has designed a service to compliment the selling of cars, and that is the service of performing oil changes so that the car owner does not have to get dirty. To entice car owners to take advantage of maintenance services, the have launched a new service to care for the car owner’s other maintenance needs. By bundling these two services as depicted in the advertisement, they hope to gain a competitive advantage in the marketplace.

It isn’t about the bus mechanics or the car mechanics or the hair stylists. It is about the customer and their needs (which in turn drives demand for mechanics and hair stylists).

Some customers may choose to go to Renaldo, the upscale hair stylist in town. Other customers have sales meetings to attend or they don’t get paid (but still need their personal maintenance needs attended to so are good candidates for this package of combined services).

Customers have different profiles, and services must be designed to meet their needs, not the needs of the workers to stay employed. If you don’t know who your customers are, or what your customer facing services are, I wonder why you are employed in the first place? Will business dry up tomorrow and your job be taken away? Who knows? I certainly don’t but you should know where the business is heading.

Service improvement IS work of higher value and those improvements might be in cost, quality, time or a variety of other benefits dependent on the strategic direction. How can you multiply your own value the way this Mazda dealer has?


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Really? Free smartphone training?

Is a 1hour user session really necessary in order to use a cel phone?

learning session
learning session

I saw this sign on a recent trip to the Eaton shopping centre in Toronto.

Behind me, the Apple store was overflowing with Iphone enthusiasts who didn’t feel the need for any sort of training. 

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Why Service Improvement Initiatives Fail to Deliver ROI

If project Managers are hired to control costs, and technical specialists work in silos, then who carries the products through the project?

In many cases the answer is no one.

The executive needs to work with a project manager early in order to identify outcomes and project tolerances (BEFORE the project begins or the budget is set), and then make THAT the main focus of the project manager.


Far too many executives leave this up to the technical teams, and then bring in a project manager to act as a project administrator for reporting purposes only.

To make matters worse, if outside experts are brought in to deliver, then why do organizations often prescribes how these experts should do their work? Doesn’t this beg the questions “why hire experts in the first place if you don’t intend on learning from their expertise and experience?”

Could it be that too many experts don’t know how to deliver value, or is it the organization that doesn’t know how to receive it?

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Does Hydro add value?

September 21s, Ontario Hydro requested a rate increase to cover the cost of operating and maintain smart meters. As a consumer, I am outraged!

When technology is implemented as a means of making services more cost effective, and that same technology results in a rate increase, that is not progress!

If you are not familiar with smart meters, Hydro introduced them recently as a way to influence consumer demand and shift more of the load to off-peak hours. Presumably this allows the hydro company to service that demand using existing capacity, rather than build more generating stations.

For this to work, consumers must buy in to the benefits of “off-peak pricing.” The carrot is that you can reduce your own Hydro bill.

hydro meter
hydro meter

In my household that meant buying a programmable dishwasher that could be set to start at 2am when rates are low. The Return on investment calculation around buying a new dishwasher was based on newer models being more efficient, but also being able to easily take advantage of off peak pricing since the dishwasher could be automatically scheduled to take advantage of cheaper rates.

Now, Hydro has to raise the rates in order to maintain the smart meters, and as a result, charge me more. That’s not progress, that’s just technology for technology sake!

Of course, Hydro will also argue that there is another benefit of smart meters to consumers. Hydro can turn down your air conditioning during the day when no one is home, thus saving the consumer even more money.

Isn’t that nice. My own inexpensive programmable thermostat that turns down my air conditioner when I want it to, becomes redundant; Hydro will do it for me…IN THE MIDDLE OF THE DAY WHEN I AM WORKING AT MY HOME OFFICE! It makes me chuckle.

Like a drummer who gets irritated when a natural rhythm in the environment is off beat, or a musician that is sensitive to tones that are out of key, I become hypersensitive to service changes that are not well thought out.

Ah the joys of being a consultant who advises companies of how to plan and deliver services in an efficient and effective way that maximizes value and reduces cost. I become buried in the millions of improvement opportunities that I see around me every day, and this is just one more glaring example.

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Is it your own fault that your budget is being squeezed?

When a task needs completed or a service delivered, a sure fire way of determining that the person funding the initiative does not understand the value is when they focus entirely on price. It’s common to see decision makers shoot themselves in the foot with what looks like a legitimate stance to take. "Service costs are soaring so lets reduce the funding so that the service provider will be forced to do more with less." I blame the service providers for not being able to articulate value, not the decision makers. In many of these cases the service providers have been unable to articulate the value sufficiently to motivate the decision maker to find the funds. Many people remember the television commercial recommending regular oil changes as a way to reduce long term costs. Regardless of your opinion of the product, this commercial is a terrific benchmark to learn from for people who are too close to the product or service. Notice how they didn’t focus on the technology inside the oil filter at all? Instead, they focusing on higher value.

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Are you getting in the way of Service delivery?

An online vendor I deal with has done a tremendous job of marketing their services to the community they serve. In fact, they created the on-line community!

Forward thinking organizations likes theirs are trendsetters and market leaders. They did everything right to ensure that when it came time for me to pull out my credit card, I thought of them first, but that is where the problems began.

It wasn’t enough to provide them with the typical credentials most on line retailers require to process credit cards. They also wanted additional information off of my card that nobody ever asks for. Fine. I provide information off the front of the card, off the back of the card, but now I have to go looking for the fine print. No matter, transaction complete…or so I thought.

The next step is order confirmation that involves responding to an email message. I get that.  What happens next is ridiculous.  I won’t bore you with the details but a problem with their system spawns 3 more email requests from them and eventually a fax.

By this time I am beginning to think they aren’t whom they say they are and are trying to rip ME off. NOBODY goes to this length to confirm a sale. It took less work to buy my last new car! 

If you are adopting technology to improve your service delivery, or even to cut costs and make it more efficient, do so in a way that places as little burden on your customers as possible. You do that by beginning with the process that you are trying to automate. Don’t make things up as you go and whatever you do, if you have an underlying problem with your system or processes, make it your responsibility to work through that, not your customer’s.

In my case I found the manufacturer, and then looked to see this supplier carried their product or one similar because they had gained my loyalty.  The next time I may not bother going to the trouble of trying to give them my business, and instead deal directly with the manufacturer, which is where all of this began.

Are you getting in the way of Service delivery

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Moving to higher value or moving away from it?

Moving to higher value or moving away from it

This week I’m working with a group in northern Ontario. Snow is a way of life up here, so why does my rental car not have snow tires, or decent all seasons at a minimum? Why did I not only get stuck in the hotel parking lot, but also on the plowed main street?

The value of my rental car is that it enables me to get to the site to help my client. If it can’t do that, the car is worthless – the service has zero value to me. All of the components of that car have to be focused on that value. You could argue that better tires do not offer the company an adequate ROI because extreme conditions are unusual, but this is December in Northern Ontario Canada that we are talking about! 

You might blame it on head office located in some sunny warm region, but in this case the office that makes the decisions is located in Thunder Bay Ontario. Thunder bay is no stranger to snow even though they are farther south than where I am.

Delivering value means understanding the value to the customer, and that value can be destroyed by the weakest link in the system. The rental car company has lost my business. Their competitor has earned it and I’m making tracks…


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Project Management: High Value or Misguided Goals?

In an effort to reign in the spending on projects, many organizations have implemented formal project management practices. This makes sense from the perspective of ensuring that the right things are being done at the right time, in a controlled and fiscally responsible way. What doesn’t make sense is the extreme that some of these organizations go to in order to control project costs.

Project management should be a resource to the project. It should help the project stay on track and improve communication with stakeholders.

Certainly there is a place for project management in tracking costs, completeness, and making sure that the people working on the project know what tasks are next on the priority list, however, if technology teams are criticized for being too close to the technology and not business savvy enough, project managers can be criticized for being too close to the project management tools and methodologies that they use.

The value is not in the reporting. The value is in enabling decisions and navigating the roadblocks along the way so that the project team can reach the customers goals efficiently and effectively.

In my opinion, too much time is spent measuring the "burn rate" rather than removing the costly obstacles.

© Wayne McKinnon 2009. All rights reserved.

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Controlling IT costs, or cost to be controlled. Demonstrating the value of IT.

Many organizations have branded their Information Technology (IT) department as a cost to be controlled, and it is no wonder. In my consulting work I can’t tell you the number of organizations that I have gone into, where pretty much the only way of finding out which business services are supported by a particular server, is to shut it off and see who calls.
If an IT organization cannot even identify the reason why the server exists, then how can they possibly articulate the value they provide to the organization beyond simply saying, “We do stuff?”

© Wayne McKinnon 2009. All rights reserved.

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What added value does the modern union provide?

In the past, unions performed two important roles: 1) Organize workers in solidarity against poor wages and working conditions; 2) Lobby the government in support of issues important to the union and its members.

Unions have been so effective in their lobbying efforts that there are now significant health and safety laws in place in most developed countries, so lobbying has achieved many of the union’s goals and their work here is nearly complete.

If we can set aside for a moment, the hotly debated issue of preserve jobs in a declining market, then the way I see it, the primary value that a union provides to its members in the modern world is not the same value as when unions began. The higher value is the same value that industry associations provide to their members:

  • Personal/professional development
  • Business intelligence
  • Promotional activities to strengthen the brand
  • Repositioning the value of the brand in the eyes of the consumer.
  • Identifying trends, new opportunities and growth potential

The Certified Management Accountants (CMA) is one example that unions can learn from.  By placing billboard ads and running radio spots depicting a management team huddled around a fortune cookie, they have clearly positioned a certified management accountant as a better alternative when it comes time to make decisions. As a result, the association has broadened the number of opportunities available to its members.  Combined with learning opportunities and neworking with peers, this is part of the value of a modern union. I suppose the alternate approach they could have taken is to attempt to mandate that anyone wanting to use a spreadsheet must be certified…

© Wayne McKinnon 2010. All rights reserved.

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