Hi Meaningful Leader,
As you well know, part of the DNA of a high performing leader must be problem solving. Finding real root causes and sustainable solutions to eliminating deficiencies should be at the core of the work we do each day.
However, it’s very easy to get caught up into more of a reactive than proactive mode, as life gets busy. It’s a sneaky situation that creeps in very subtly but that can cause unnecessary crisis and it’s mostly based on complacency.
When we do the job day in and day out, it’s very easy to either become problem blind or at least experience tunneled vision. Meaning we either ignore the problem completely or get so focused on the process-segment we are responsible for, that we forget the impact it has to the end-to-end (E2E) each process has.
This happens a lot in functionally-structured organizations and the issue is not only that it has the tendency of creating silos that are easily preventable, but it also significantly vulnerates the organization to lose track of what matters most, the customer. Functional structures focus on measuring things within the process, while exposing the gaps of the E2E, because reality is, nobody is measure on those, so they fall through the cracks, impacting the only party without a KPI in this equation, the customer.
Upstream problem solving is a proactive approach to addressing problems before they arise. It involves identifying potential sources of problems and addressing them before they can manifest themselves downstream. This practice can be applied to a wide range of industries and processes, from manufacturing and engineering to organizational management and customer service. By focusing on the upstream sources of problems, businesses can save time and money, and potentially reduce future issues.
The concept of upstream problem solving has been around for decades, with its roots in Total Quality Management (TQM) principles. TQM is an approach to organizational management that emphasizes continuous improvement and defect prevention. It was developed to improve the quality of products and services by reducing defects and rework, ultimately leading to improved customer satisfaction.
When it comes to upstream problem solving, the key is to identify the root causes of problems and address them before they can cause further issues. This may involve analyzing data, conducting surveys, or interviewing stakeholders to identify potential sources of problems. Once the source has been identified, the focus shifts to prevention, either through improved processes, increased training, or changes to the product or service.
I recently read about an issue the online travel booking company, Expedia.com experienced in 2012. Their Head of Customer Experience while going over some data from the company’s call center discovered that from every 100 customers that booked an itinerary with Expedia, 58 placed calls for help after they book. The number one reason, was to retrieve a copy of their itinerary. To give you perspective, this percentage amounted to 20 million calls per year (this is the whole state of Florida, calling your company in a year, say what?). Furthermore, at $5 per call, this became a $100 million problem – main root cause: customer mistyped email and there was no verification process in place.
The way Expedia (functionally-structured organization) was divided was as follows:
- Marketing Team – responsible for attracting customers to their website
- Product Team – responsible for nudging customer into completing their booking
- Technical Team – responsible for ensuring the website run without glitches
- Support Team – responsible for addressing customer issues
See the problem? Nobody was tasked or measure to ensure customers didn’t have to call with an issue, there was nothing preventive about their structure and processes. No team stood to gain if customers stopped calling. After creating a war room and cross-funcitonally brainstorming ways to preventing this recurrent issue from happening, they came up with solutions that drastically reduced the amount of calls from 58% to 15%. (source: Upstream by Dan Heath)
One practice that Jeff Bezos, Amazon’s CEO at their HQ in Seattle has that has become well-known is that he would often wheel an empty chair into meetings and use it to remind the gathered executives that “the most important person in the room” was the customer. Bezos would make all his senior executives attend call centre training so they could literally hear the voice of the customer, over and over again And he would read hundreds of the emails addressed to email@example.com. (source: marketingweek.com)
The benefits of upstream problem solving are numerous. By proactively identifying and addressing problems, businesses can reduce the amount of time and money spent (read wasted) on downstream solutions, such as rework and customer service. Additionally, upstream problem solving can lead to improved customer satisfaction, as customers are more likely to remain loyal when their problems are addressed quickly and effectively.
But how exactly does upstream problem solving work? Let’s break it down:
First, identify the problem. This is usually done by asking questions such as: What is causing this issue? What are the potential causes? What are the potential solutions? Once the problem is identified, you can start to develop a plan of action.
Next, look at the underlying causes of the problem. This could include identifying areas where improvements can be made, such as processes, systems, or policies. You may also need to look at the organization’s culture and how it contributes to the problem.
Finally, it’s time to take action. This could mean implementing new processes, training staff, or updating systems. It’s important to make sure that everyone is on board with the plan and understands their role in the solution.
Upstream problem solving is not without its challenges, however. It requires a deep understanding of the problem and its potential sources, as well as a willingness to invest time and resources into addressing the issue. Additionally, it can be difficult to measure the success of upstream solutions, as the benefits may not be seen until further down the line.
Despite the challenges, upstream problem solving can be an effective way for businesses to reduce costs and improve customer satisfaction. By identifying potential sources of problems and addressing them proactively, businesses can save time and money, while also improving customer loyalty. Upstream problem solving is a valuable tool that businesses should consider incorporating into their organizational management processes.
As leaders, continuous improvement has to be at the core of everything we do, including our personal development. Preventing instead of fixing, is not only the commonsensical way of approaching anything in life, but it will truly allows us to serve our teams and customers as they deserve to be served.
I hope you found value here today, if so, please like, comment and share with other who can benefit from this information.
Thanks for reading and God bless,