Tuesday, January 14, 2020
A podcast version of this post is available at https://www.buzzsprout.com/792494/episodes/2487359
Hello friends. I am Anshuman Tiwari, and this is my podcast on Quality and Operational Excellence. I call it the The Operational Excellence Advantage and am hoping to bring you views on how we all can use operational excellence as a competitive advantage at work. I will share my views and occasionally invite others from the industry to share lessons you can use. Your feedback is essential and always welcome.
Today I want to share a key concept in Operational Excellence that is often missed out in the rush of getting things done and fighting a fire a day. I have often said that Operational Excellence is a balance of theory and practice. Most of us are consumed by the practice and do not take the time to stop and ask ourselves – what is the theory behind this? Is there a better theory I can use? What are others doing about this issue?
The concept I wanted to share today is called - Runners. Repeaters. Strangers. This is a not often used concept from Lean Thinking but should be used more. Before I explain the concept, I want to highlight that 'differentiation' is the key to this concept. If you are a fan of the concept of 'standardization,' then 'differentiation' may seem counter-intuitive to you. In this case it is not but I will cover that in another episode.
So, what is the concept of Runners, Repeaters, Strangers about? In simple terms, it classifies all work done in three categories – runners are the most often repeated and standardized tasks, repeaters are less often repeated but fairly standard, and strangers are once in a while and with hardly any standardization. Let me explain. Next time you go to a fast-food chain, try to observe the ordering pattern. You can do this activity at any fast-moving place, but I think a fast-food counter is the most suitable place for this study and I suspect if you have kids, you are visiting such places often as well. Observe the ordering pattern, and you will notice that most people orders a very standard set – maybe fries, burger, and a soda (also called cola in some countries). The next and much smaller set of people will order something more complicated but not totally unusual. And a third set will have a very complex order – maybe something that the restaurant only makes once or twice a day. You get the point.
These categories are called Runners, Repeaters, and Strangers. Now, since you are an Operational Excellence professional, you should not stop here, should you? A question you might want to ask is – What % of people belong to each category? Another question could be in what ways does the order fulfillment process differ? A third question could be – what can I do about this new-found knowledge in my work?
Let's tackle these questions one by one.
Percentage across these categories can vary from 1 to 5 for strangers and 60 – 90 for runners. Rest in between is the Repeater category. You may want to know – how do I know this? I have been using this principle for over five years now and have analyzed work done and how we should organize it based on this. So, there is some informal research on this. Yes, the % range is broad, but then we are not sending a man on mars with this concept, are we?
Let's go back to our fast food restaurant to tackle the second question we had. In what ways does the order fulfillment process differ? The person taking the order knows the code for runners and punches at speed. He has to check the codes for Repeaters and sometimes refer a manual or document for the codes for Strangers. But this is only the start. The kitchen is organized like an assembly line to flip your burger or fry your fries. But if the order is of a wrap with some unusual fillings or no-cheese or extra-cheese, then it is no longer standard. It needs people who are more trained or experienced, and the whole process takes longer to perform. For the stranger requests, everything is customized for the customer.
Before you feel that I only have one scenario to explain this or I work at a fast-food chain, let me offer another example. And this one is a real example. A large car maker in the UK was once faced with a string of customer complaints about delays and poor service. They analyzed their work arrival patterns and realized that cars from the compact to the luxury segment, were all arriving across the day and had precisely the same process to welcome them, issue a job order, and service the car was used. You will think, what is wrong with this? As an Operational Excellence professional, you may actually like this standardized process. But what about the customer – if the customer is from the lower price end car, then they have no more expectations in servicing than they had in sales. They are okay to wait and don't expect anything premium. But what about the 1% car buyers who own a luxury car of the same brand? They were pampered in the sales process and expect similar or better treatment in service. Is the car service center giving this differentiated service?
The car company used concepts of Runner Repeater Stranger to make different receptions, dedicated staff, mechanics who could service these vehicles at speed, and so on. The usual Operational Excellence metric of Utilization was scrapped for servicing of Luxury cars. It was okay for a mechanic to sit idle for some time and be available for immediate placement on a luxury car that drives in. Results? Both sets of customers were happy. Luxury car sales actually picked up as the lower value car owners saw an aspirational value in the higher segment.
There is another medical analogy to this concept. A vast majority of the people can manage their lives with regular exercise and a balanced diet. They do not need to go to the doctor often. They can wear a wearable on their wrist and record most vitals and check if all is in control. A much smaller percentage of people have slipped into needing to see a doctor regularly and do more tests in a laboratory. And lastly, there is that 1% or hopefully lesser group which needs critical care. The medical system is organized to service these sets differently. I believe all work should be organized to service these categories. It will be hugely beneficial and efficient to do so.
How can this concept be used in what we do? Many of us already use but could do better. Let me share one more example, and this is one is from my own experiences.
Some years ago, while reviewing customer complaints of a mortgage (also called Home Loan in some countries), I discovered that there was a pattern of unusually high complaints from a premium channel. A premium broker channel sources high net worth clients who are investing in high-end properties. Such customers get premium treatment and a dedicated salesperson. So why the complaints? All customers were happy with the sales part but were upset with the fulfillment part. It would take weeks for the deal to close, and they had to call multiple times. The salesperson would say the case is with Operations teams and so on. So, what is happening here? Only the sales process is premium. The delivery or fulfillment process is typical for all customers – premium or standard. The better service during sales raised expectations of the customers and amplified their disappointment when the delivery or fulfillment was anything but premium. This is classic Runner Repeater and Strangers situation. We made small changes in how we were organized, stopped looking at Utilization and Efficiency of staff supporting Premium customers, started focusing on a one-time resolution for them, and within a month, the impact was very visible — improved ratings and higher sales through referrals.
One final example from a projects based company. Not all projects are born equal. But how do we treat them? Equal. All processes have equal access to the same tools, resources, and management attention. Go back to the restaurant example, the car service example, and the mortgage one. Got the point? This company is reclassifying its projects across the three categories. Reporting, reviews, and resourcing have all been categories to service the three sets of projects. They have found that typically 90% of projects are doing okay and can manage on their own; about 9% need monitoring and attention, and 1% need critical care. The % could vary for your company and industry, but the concept won't.
I am often asked – can Runner Repeater Strangers be applied to all type of work? I am not too sure about all but most type – yes. Look around and you will easily see that most work can be split into these categories. And your approach to these categories must differ to get the outcomes you want. You can even apply it to answering email which I am sure you get tons of. Are all emails equal? Don’t you get a pattern there? I am sure you see the point.
Okay, so I end this podcast I wanted to remind you of the key points – all work is not equal. There are typically three categories – Runners, Repeaters, and Strangers, and across industries, the % could be 90, 9, and 1 for these categories. We need to have processes that are different and suited to the needs of these groups. One process doesn't fit all in this case.
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Till the next podcast, happy learning, and realizing The Operational Excellence Advantage.