Dealing with systemic issues in a sustainable way; a multi-disciplinary approach to analysis of...

Dealing with systemic issues in a sustainable way;

a multi-disciplinary approach to analysis of customer feedback

Bill DeeNicole Cullen

Tuesday 4 September 2007

SOCAP 20071

Bill Dee Root Cause Analysis Nicole Cullen

Workshop Outline

Use of customer feedback dataReturn on investment of complaints

handling systemsWhat is root cause analysis?Benefits of root cause analysisKey principlesProcessNext steps

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Customer feedback data


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The organisation can become aware of problems from a number of sources

In this session we focus on what you can learn from customer feedback i.e.• Complaints data• Satisfaction surveys• Focus groups• Front line staff perceptions

AS ISO 10,002

The organisation should establish and implement procedures for recording complaints and responses and for using these records and managing them… (clause 8.1)

All complaints should be classified and then analysed to identify systemic, recurring and single incident problems and trends and to help eliminate the underlying causes of complaints (clause 8.2)

Discussion


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How are you currently using your customer feedback data to prevent problems?

Questions to ask


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Are you getting a good return on your complaints handling investment?

How much are preventable problems actually costing your organisation?

Are the problems having any other impact?What is the cost of that impact?

The tangible costs of problems


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Salaries of front line staff, admin staff, complaints officers, managers, senior executives, board members when dealing with problems, complaints and disputes

Cost of escalation to an External Dispute Resolution scheme or Court

Legal costsCompensation paid to customerLoss of staff/absenteeism/replacing corporate

knowledgeCompliance costs and penaltiesCost of gaining new customers

The intangible costs of problems


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Loss of loyalty by customer Negative word of mouth by staff and

customers Damage to reputationStress on staff

2006 Survey on ROI by SFI International*


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88% of organisations surveyed did not know the cost to the organisation of conflict resolution !!

45% believed good complaints handling leads to repurchase

52% did not reward operators for successful complaint outcomes

Organisations that did not survey their complainants believed their retention rates were higher than they actually were

*SOCAP conference 2006

Consequently…


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No clear budget for complaints handling and dispute resolution

No clear guidelines or targets for staff on what success looks like

Complaints/customer relations departments are seen as a cost centre (depleting resources) rather than as a profit centre (value adding)

No clear link between the cost of complaints handling and the value that is delivered

What is Root Cause Analysis?


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RCA is a structured process whereby the causes of problems are forensically analysed by a multi- disciplinary team so that problems can be rectified and ultimately prevented

What RCA is not


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Producing statisticsTrend analysisSuperficial guess work by individualsDiscussions in corridors about issuesBlaming others for mistakes

These are all useful activities but they do notindividually or collectively = RCA

Multi-disciplinary approach


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Effective RCA should be done by a team of people within the organisation under the guidance of a facilitator to bring a range of appropriate skills and knowledge to the table for a more forensic analysis of customer feedback

This “collegiate” approach not only gets the right mix of skills to understand the causes and suggest the appropriate remedial action, but also brings an “enterprise” response to problems rather than a “silo” mentality that exists in many organisations

Case study - Eastman


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The cost of customer complaints was manifesting in:

lost business when customers switched to other suppliers

costs associated with investigating and responding to complaints

cost of compensation to customers as a result of defective products

Source: www.asq.org



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• Corrective action plans “we’ll try harder” were not working

• Needed method to identify the root causes of complaints

• Needed action to eliminate the causes of recurring problems

• Established a Review Team• Found that most complaint investigations were not

getting to the root (organisational) causes but stopped after learning who caused the problem.

• Using RCA they cut their complaint figures by 50% between 1997- 2000



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Bottom Line Results The effective use of root cause analysis reduced

the number of complaints by 50% worldwide in a three year period between 1997 and 2000

Benefits Improved customer satisfaction Increased sales Reduced waste Lower costs Value of its enhanced reputation

Typical skill sets


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Consumer affairs professionals/ customer service

ComplianceLegalOperationsCommunications ITHuman resourcesLateral thinkers

RCA key principles


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• Structured “logic tree” process• Multi- disciplinary approach cuts across

silos• Analysis goes beyond human cause and

identifies process, system organisational causes

• Analysis does not stop at the first root cause found but keeps digging to identify and eliminate the multiple causes

• Problems are typically the result of multiple causes rather than a single cause

RCA Process


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1. Pick a problem2. Brainstorm for causes3. Build the tree4. Rectify the problem5. Evaluate the outcome6. Implementation plan - prevention

What are the benefits of RCA?


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• Fix problems on an enduring basis• Lessen unacceptable risks• Vehicle to improve relationships and to

bring a sense of collegiality amongst relevant stakeholders

• Improved customer relationsAssists to embed quality service throughout

the organisationHas a positive impact on morale

Hypothetical cause tree


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Plane crash

Travelling too fast

Wing flaps not configured for landing

PoorDesign of

runway

fire from ruptured fuel way

Mechanical failure

Poor design of plane

pilot decides to continue

landing

Pilots arguing

Pilot wanted to conserve fuel

?

RISK FACTORrunway too

short Failure to properly

Service plane

Policy to conserve

Fuel

Bonus payments to pilots

who conserve fuel

Pilot motivated by money

Impact21 die

Plane burnsAirport closes

Costly investigation

RISK FACTORFire and rescue inadequately

equipped

RISK FACTORbad

weather conditions

Gush of wind

Case study


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Insurance company stops preventable problems and reduces costs through analysis of complaints

data and implementation of new procedures

Next steps


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RCA workshop Develop a clear understanding of root cause analysis – how

is it different to what you already do? Learn the RCA methodology and apply it to several high

priority problems within your organisation Develop an implementation plan for change Agree on how to measure the improvements

RCA Review More detailed analysis of problems working together with

an internal continuous improvement team

What some participants in our RCA workshops have said


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“There is definitely a need for a more formalised approach to problem solving within our organisation.”

“It’s helpful to have all relevant people involved in the process and to use a step by step approach to thinking the events through to arrive at a logical conclusion“

“The workshop adds a lot of value and insight on how to create a culture and environment where people can work together to solve problems rather than individuals (not being able to see the issue)"

As a result of this workshop “we might change our complaints handling process - the way in which complaints are regarded and the involvement of compliance in the complaints process"

The new frontier for complaints handling


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Old Goal = process the complaint as quickly as possible + provide a satisfactory resolution for the customer. BUT - this does not necessarily reduce the frequency of complaints

New Goal = Recurrence of similar complaints can be eliminated only when you uncover the root organisational causes

Next steps?


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Discussion

More information?


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Bill Dee

[email protected] 210 379

Nicole Cullen [email protected] 0402 003 200

Dealing with systemic issues in a sustainable way; a multi-disciplinary approach to analysis of...

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