Improvement Insights Blog

Are old policies making your business sluggish and irritating customers?

“Hi, I’m Jay Arthur, author of “Lean Six Sigma Demystified” and QI Macros [software].

“Some years ago I worked with a credit union. They were having trouble because on Friday nights there were really long lines [with] everybody trying to cash their paychecks and everything else. They were struggling. They also had a problem because when they lost a teller it took them 80 days to get a new teller in.

“We started looking at the process for doing that [with a] little value stream map. The very first thing they did was they offered that job to the rest of the company. I said, “How many times does somebody in the company take the entry level teller job?” and they said, “Well, never.” I said, “Well, that’s a waste of two weeks. Why don’t you just go straight to the public?” “Well, that’s been our policy.” I said, “Well, obviously your policy isn’t serving you. You can eliminate two weeks out of those 80 days; that’s 14 days right there, right off the top,” and they thought, “Well…” I said, “Policies are made up, right? So we can rewrite the policy.”

“Then the next thing they did was they would send out an ad in the paper, they would schedule interviews, and sometimes people wouldn’t show up for the interviews. It would take a week or two to get all the interviews done. I said, “It seems like that’s a pretty strange waste of time. How many of those people actually are suited for the job?” “Well, not that many.” “Okay, so what could you do differently?” They said, “Well, we could do a telephone interview.” I said, “Ah! Why don’t we do a telephone interview and then you can bring them in for a full interview if they really pass the initial inspection. That’ll probably collapse your whole cycle time very radically. You might save another week; maybe two.” They thought, “Hmm,” and so I got them thinking about [the concept that] your policies are killing you. Right? So we can maybe collapse it down to 50 days or 40 days to get somebody in training, and it was about a week… No, it was like a month of training, so that enabled them to start getting more people restored.

“We looked at other things too, like “What’s your normal turnover?” “Well, one or two a month.” “Okay, so… you know you’re going to need one or two; why don’t you just start interviewing people and see if you can’t get people ready and in line to go fill those empty slots that are coming open?” “Well, they may not want to work up here, and they might want to work down here. I said “Well, could you set it up so that they work up here until there’s an opening down here, because we know there’s going to be an opening down here at some point. They work up here and then they transfer down to here, and we get somebody else go into that other place.” They were like, “Wow!”

“And then, an interesting thing was on Friday night people come in and they’d want to get $300, $400, $500 back in cash. Well, it turned out they had a limit of $200 – that was all that a teller could authorize to give out. Well… what? Right? I said, “So what happens?” “Well, the manager has to come around and sign off on these larger cash withdrawals.” I said, “How many times did the manager refuse the cash withdrawal?” They said, “Never.” “Well, what good is it? Why don’t you just let the tellers go up to $500? Anything [under] $500, that’ll handle most of the stuff that that comes through, won’t it? That’ll free up your manager to do the things that are really important.” They looked at me and thought, “Hmm…”

“So this is the kind of thing I want you to realize: your policies could be killing you. Somebody dreamed them up; sometimes you can just change them.

“When I worked at the phone company we had umpteen thousand tellers… I mean service reps, not tellers; service reps. The service reps were unable to give a credit to a customer, so even if some long distance call got on their bill but it wasn’t their long distance call, even if it was only a buck and a half, guess what? We had to write it all up and send it off, and it had to go through accounting and everything else, and it cost $25 to issue a $1.50 refund. I said, “Well, that’s dumb.” Right? So I got my leadership team and finance’s to say “Why don’t we raise that to say five dollars, and then you can track and see if anybody’s abusing that. Then we can take action on the people who are who are going crazy. Anything less than $25 we can save money by simply giving it right there at the time. That way that person doesn’t call us back, it doesn’t cost $12 more for us to handle that callback because they didn’t get their credit from the last bill because it was taking too long to get those things done.”

“Policies may be killing you, all right? I want you get this idea the policies are made up; somebody made them up, you can remake them and save yourself a lot of time and make your customer a lot more happy.

“So that’s my Improvement Insight for this week. Let’s go out and improve something this week. Let’s create a hassle-free America; hassle-free health care. Let’s go out and improve something this week.”