Recently I needed to go to the post office in downtown Chicago for a certified letter. Yes, it would seem, the post almost writes itself… the lines were long and, in the middle of it, one of the two employees wandered off to take a break or something. The guy next to me, an older guy, was about to lose his mind with rage. He said “this must be how it is under communism” and seethed with rage. My response was that the selection of employees was essentially designed to “employ the unemployable” in the name of limiting social unrest as a thinly disguised government work program. At one point, an actual competent employee came in and took all the people in line to self-service machines and helped me personally, for which I was thankful. The entire process, which should have been simple, took over an hour.
I was in a local sandwich shop called “Corner Bakery” (which I usually call “Corner Confusion”) where you order in one place and they give you a tag to put on your table, and then you wait for your sandwich to come to you. This sort of process always scares me, because the shop is big and there is a patio outside, so they don’t know where you are sitting and it just seems like they could miss you. Well, this time they found me… a waiter who didn’t speak English very well came over and set my sandwich in front of an older guy and gave him my sandwich (one was flat bread so it should have been obvious which was which). The other guy was about to go apoplectic with rage but I had been watching the whole thing, just assuming that it would be screwed up, and I calmly got up and switched sandwiches with the guy (I was watching him, too, to make sure he didn’t take a bite out of it). He was in mid rant but I didn’t care, I just wanted lunch.
Often I go by McDonalds for coffee (I don’t like Starbucks very much, although I usually go there just because it is preferred by others and I don’t care very much overall) and it is part of the rest of my order. There are two dimensions for my coffee – “black” and “large”. I have learned through hard experience to wait until the clerk is ready to receive this complex and easily forgotten information; you’ll just have to repeat it five more times. It is beyond expectations that you could ask for your order (like a number “9″ or something and AT THE SAME TIME say “large coffee, black”) without having to repeat it later. But you need to stay on it, or you never know what you’ll get.
Through myriad travels and eating out continually for years I have three expectations for the US service sector, so that I am never disappointed:
1) they know nothing
2) they do nothing
3) they annoy me
With this, you won’t find your blood pressure rising at the post office, at the check out line, waiting for your check at a restaurant, receiving the wrong order, or just generally being ignored.
What we are really talking about is the productivity. In the manufacturing sector, productivity is all-important. When you talk about factories, you see parts arriving just-in-time, defects measured in parts-per-million, and productivity measures like the time to produce a car or the percentage utilization of a factory. By almost any measure productivity in the manufacturing sector has soared.
In the distribution chain, productivity has also increased. Note those huge distribution centers located on the outskirts of suburbia (or exurbia?). Along with obtaining real-time information from retailers to stock that gear at various locations in advance of when it is needed, the distribution sector is continually improving in productivity. Recent rises in the price of gas have only sharpened this focus.
And yet in the service sector, productivity is abysmal. I often use the phrase “one sigma” as a joke – in the manufacturing sector they talk about “six sigmas” or errors in the range of parts per million, yet a “one sigma” service sector would get the answer right 2/3 of the time. That would probably be a good case.
You can also see the attempts to improve productivity that often don’t involve better training or skills; they involve simplification. Ever wonder why you order by number at McDonalds? Ever think why those cash registers just have pictures on them? And that everything is the same everywhere in terms of restaurant setting for the franchises – to guarantee a minimalist level of service. And for that, given that my expectations are low, I am thankful.
As we move into a more service-orientated economy, where fewer and fewer people work in manufacturing, we need to ask ourselves – “are we good at this”? A short answer is, probably better than most of the world, but still not very good. On the one hand we are more productive per unit because we don’t pay a lot of our service sector workers much of anything, in many industries (retail and food services). We have a lot of part time workers in this sector, and they don’t have benefits, much less pensions. But as even the shortest venture out into the service sector will show you, the quality of service is often low.
Some service companies that are good are vilified for it. An acquaintance worked for a long time at a big manufacturing company where, frankly, his life was pretty sweet. He took a union buyout after bitching for years about his old company, and took a job at Wal-Mart.
Wal-Mart, even though they paid a fraction of his old wage and he never received enough seniority for full-time benefits, worked his rear end off. At Wal-Mart, he stocked the whole time and they rode him hard to ensure that it was all done. The second the work slacked they made him clock out, even ahead of his shift. They don’t mess around at that company, the managers rise through the ranks and do have measures of productivity and take their jobs seriously.
I know that there are small companies where service is taken seriously, and the managers know their customers and in fact they ANTICIPATE their customers’ needs. These companies often have their owners hovering nearby or in the front lines, and this also makes all the difference, because the owners have a big stake in the outcome and know that service allows them to compete against bigger retailers where they can’t always win on price (they might be able to be competitive, though).
As far as government, health care or education productivity, we all know that this is hardly measured at all. Even though the web and new technologies have revolutionized work, you won’t know it out there in government in terms of cost reductions, although they do implement the internet as a way to increase their revenues and get in the cash faster (so they can kick it out the other side even faster). Schools see budgets increase and don’t tie it to outcomes, and they don’t take responsibility for making things better.
When you look at our economy from a “million mile” view, you can see:
1) a highly efficient manufacturing sector
2) an increasingly efficient distribution sector
3) a poor quality but relatively low cost service sector
4) an abysmal government, health care, and education sector
5) a thin-crust of relatively high productivity service areas in terms of consulting, high tech, and legal areas… but these are a tiny percentage of the total
Think of “one sigma” as the sad challenge to today’s service sector…
Cross posted at LITGM