Moral Distance's Impact On Service

We live in a service economy but my experience is that the “service” part is sadly missing. Why is that ? Could it be that the ‘moral distance’ is far too long ?

Recently I ordered a product on line ( from a very well known high street retailer ). I clicked, payed and waited. And waited. After four days I still hadn’t received a delivery date ( they had promised that I would have the product within five days ). Checking my online account I found that the order had been “suspended” and my money had been returned. I phoned the helpline to find that the link between the online web site and the warehouse wasn’t working - they were selling products that were not in stock! I sent an email to complain about lack of communication about the order to which I received an apology about the situation and that they had passed the problem on. I then reordered another product and after thee days I received message requesting me to collect the parcel from the logistics company depot ( about an hour’s drive away ) - which I ignored! A few days passed and the product arrived. Three days later I received an email saying that there had been a problem with my first order! This story is not unusual. I have had problems with companies large and small, and I could write a “collected works” about the frustrating service from utility companies.

I am not blaming the front-line staff, they didn’t install the on-line system. They had to face the flack from irate customers probably with their hands tied by processes and protocols. This is a problem with the business leadership and the distance between their actions and the consequences on customers and frontline staff - the moral distance. The greater the moral distance the less that its business leaders have to suffer the moral consequences of their actions. The airline leadership not ensuring that there was adequate planning leading to the cancellation of flights and the gate agents fielding annoyed customers. There can be moral consequences from the lack of action. Politicians not making sure that predictable events were adequately resourced in the NHS and tens of thousands of operations cancelled leaving hospital staff to manage frustrated and ill people. In my case it is clear that the business leadership decided that an on-line presence was required. However following through the consequences of the action and making sure that the new on-line system was talking to the warehouse seems to have fallen through the gap, resulting in their customer service fielding telephone calls and emails from at least one annoyed customer.

Business leaders face a dilemma. As their business grows, or changes to meet the latest customer demands, then the moral distance will increase. The link between them and front line staff and their customers becomes extremely long. Can the moral distance be reduced ? Here are some thoughts. First, to assess the impact of any actions whether it is the implementation of a new sales system, procedures or training to manage customers, then the front line staff should always be involved. In my experience all front line staff are dedicated to their businesses, and they can provide some practical ways to make sure that the changes actually help customers.

Nothing is perfect in business when implementing change and it is critical that a ‘what-if’ analysis should be carried out e.g. what happens when we run out of stock? what happens when the helpline is busy? and so on. Also, check how the customer will be managed if something goes wrong. In my case I received no notification of a problem other than there was a ‘suspended’ message against the order which meant very little to me. A better word would have been “out of stock.”

Finally, business leaders should be visible, approachable and remain in contact with the frontline staff and their customers. This can be done in many ways, ranging from “Management by walking around” or regularly monitoring helplines, complaint systems or social media. In other words making it a priority that they are in contact with the frontline and customers.

It is clear that as the moral distance increases then the quality of service tends to reduce, not only for a business but for governments and other organisations. A reduction in the moral distance will put the “service” back into the service economy and next time I order a product it will arrive on time !

Gambling On Prostate Cancer

Medical terminology is full of complicated terms. Words such as rhinorrhea ( runny nose), cerumen ( ear wax ) and epistaxis ( nosebleed ) map out a land where only a few can tread. But recently I have had to step into it when I came across the term 'false positive'.

I have reached an age where health is starting to dominate my thoughts; in particular my prostate has been painfully brought to my attention. My doctor summarised the situation “your days of peeing over the school yard wall are over!” Therefore to diagnose the problem I have had various tests and examinations including the Prostate Specific Antigen ( PSA ) test which is used to detect prostate cancer. When searching the web to find out more about the test I came across the phrase “false positive” which seems like a riddle posed by Yoda for ‘Young Skywalker’ in Star Wars. How can something be “false” and yet “positive” ?

Developing a medical test is subject to many constraints. For example, the test should ideally be non-invasive, easy to use, and low cost. Also, because of the complexity of the human body and the limited level of knowledge about how it works the results from a medical tests are rarely 100% accurate. Accuracy is important. For example if a test is 90% accurate then the results of 90 tests out of 100 will correctly show whether a person has the disease or not. But for the remaining 10 tests the results will be wrong.

To work out what false positive means with respect to myself and the PSA test I grabbed my pen and paper and settled down to work out the following example. First, there is a lot of controversy about the accuracy of the PSA test therefore it is very difficult to get a definitive number on its accuracy. However, for the purposes of this example I assumed that it is 33% accurate ( or 1 in 3 ). It is important to note that if the test result is positive it does not mean that there is a probability of 33% of having prostate cancer. What is usually missed is the baseline information, which is the information about the situation before any testing is carried out. Therefore, to work out the probability of actually having prostate cancer I needed an estimate of the number of men in a population who will have prostate cancer - the baseline information. For this example I have used an estimate of 1 in 33 as a guide to who will have prostate cancer ( the chances of prostate cancer increases with age ).

The following steps work towards answering question: if the result of a PSA test is positive what is the probability of having prostate cancer ? :

To keep the numbers simple I have kept the population size down to 100 therefore, the following diagram shows 3 in every 100 who will have prostate cancer - approximately 1 in 33 ( the baseline information ):

Population showing 3 in 100 with prostate cancer

The following diagram shows the results from applying the PSA test with an accuracy of 1 in 3 ( 1 in three tests it gives a correct diagnoses ) where the plus signs are positive results:

Population after the results of the PSA test

From the digram it can be seen that the test gives the correct result for one case of prostate cancer and gets the other two cases wrong. The two wrong cases are called false negatives ( when designing a medical test the number of false negatives are minimised to reduce the chances of missing the disease ). The test gives positive results for 64 cases when there is no prostate cancer - which are the false positives. In other words the test returns a positive result when there is no disease. Therefore the probability that I could have prostate cancer is 1 in 65, and not 1 in 3 - the odds of not having prostate cancer when the test is positive have improved !

A large number of false positive results indicates that there is a low probability of having the disease. When a test has a low accuracy then more medical tests have to be performed. For example following a positive result from a PSA test then further tests will be required, for example an ultrasounds scan or a biopsy before a diagnosis is reached.

The PSA test is quick and cheap, it can costs between £30 - £50 per test, but it can be unreliable, However, there are new medical tests being developed to improve the accuracy in detecting prostate cancer, for example: Imaging techniques uising MRI, improved blood test and urine test.

Next time I discuss further medical tests with my doctor to diagnose the problems with my prostate I will be asking about its false positive result. It may not put my mind to rest but it will reduce the terminology fog and then I can concentrate on managing the situation !

For more information about the PSA test see: Should I have a PSA ? and for a detailed description of the mathematics behind the example discussed in this post see: Mathematics of a False Positive Test.

The Limits Of Robotics and AI

I knew that I had asked the wrong question. The toolbox thumped onto the floor and the top was slammed open. I would not ask again.

It was Friday morning and there had been a slow drip of water through the light fitting in the sitting room. I guessed it was from the upstairs shower. But I am no expert so I called our plumber Paul who arrived promptly. He has repaired many leaks over the years as well as installing new showers and bathrooms in our house. However, just that morning, I had been reading about robotics and Artificial Intelligence ( AI ) and how they would take over all of our jobs. This had prompted me to ask “Do you think plumbers will ever be replaced by a robot?”

Robotics and AI is reaching fever pitch in the media. Headlines proclaim that they are “a new form of life”, or that they can think “… and could make decisions against our will” and then there is the Killer robot ARMS RACE - if climate change doesn’t wipe us out then robots will!

Ideas about robots have been building up in the public conscience since the early 1940’s when Isaac Asimov formulated the Three Laws of Robotics, a set of rules to ensure friendly behaviour, and in the process coined the word “robotics”. This awareness has increased with films such as 2001: A Space Oydesst with H.A.L. and its ominous catch phrase: “I am afraid I can’t do that Dave”, Blade Runner where it seems to be impossible to distinguish between people and “replicants”, and the Terminator films where Skynet ( something similar to the Internet ) becomes self-aware and starts to wipe out humans who are seen to be a “threat”. The public are seeing robots everywhere, which has prompted the government to respond, as only they can, with a strategy! The Trade Union Conference has waded into the debate with a discussion paper that includes the phrase: “there is no need to panic” which is enough to make anyone feel nervous!

And yet in amongst the swirl of headlines about this revolutionary technology I still find myself waiting in a phone queue for over thirty minutes to sort out problems with an energy supplier, or have to wait nearly two weeks to see my doctor! And, of course, I still need a plumber to repair a leak in our shower.

Upstairs I heard Paul starting to lift the floorboards and search for the leak. From previous repair jobs I know that he will bring a multitude of skills and experience to repairing the leak: navigating around our rooms to find the pipes and locate the leak, finding out why it leaked - was it a loose connection or had the seal rotted away ?, repairing and testing the new joint, and then putting everything back so that it looks as though nothing had gone wrong. My imagination is struggling to see all those skills and experience in one robot!

Robots are machines that have been programmed to carry out a series of actions by themselves, and Artificial Intelligence is computer programs that mimic human intelligence on tasks such as learning, perception, problem-solving, language-understanding and/or logical reasoning. The first robot emerged in 1960 and was a programmable robot arm which was called Unimate. This paved the way for industrial robots to complete repetitive, difficult or dangerous tasks mainly in manufacturing. Most predictions show that they will continue to grow in numbers with sales expecting to triple by 2025. It is a similar story with AI. In the mid 60’s ELIZA was a computer programme that could hold a discussion with people by replying to typed in questions. Today AI is beating experts in games such as Chess, Go and the TV game show Jeopordy. AI will creep into all walks of life and the market for the technology is expected to increase from $500 million in 2015 to £14 billion by 2025.

In amongst the predictions about the declining future of humans there are some applications of robotics and AI that can make a positive difference. For example in healthcare robots are helping with prostate cancer surgery, and reducing hospital acquired infections such as MRSA. There are exciting new developments in detecting disease, for example using AI to detect the onset of Alzheimers by how people speak.

Similarly in education, although there are some over excited headlines such as “Intelligent machines will replace teachers within 10 years”, there are more practical applications of AI that are helping teachers. For example systems from Knewton’s and ACER use AI to tailor the learning material to the ability of the individual student as well as monitor their progress. Using these types of systems could free up teachers from increasing amounts of administration.

The hot topic at the moment is driverless cars which according to the headlines will be on our “roads within the next few years.”. But the jury is still out about how quickly it will be taken up by drivers, especially when leading lights as Jeremy Clarkson has had a couple of near death expereinces when the using the latest autonomous car. However, in Agriculture there is more scope for automation ( and less opportunity to wipe out people ). Driverless tractors are already here and there must be more scope for automated picking machines to replace the shortage of migrant workers since Brexit.

As Bill Gates once said: “We tend to overestimate the pace of change in the short term, but underestimate it in the long term.” Robotics and AI will have an increasing role in our lives but to what level and extent it is still not clear. My hope is that they will continue to take over the repetitive and dangerous work and improve our capabilities in learning, problem solving and making decisions.

Paul stuck his head around the door “All finished!”, and then with a smile “I bet a robot couldn’t have done that!” We both laughed. As I waved Paul off I made a few mental notes: up date the contact details of the electricians, roofers, bathroom tilers, painters, decorators and anybody else that we rely on to maintain our house, and not to ask them silly questions!

A formula for a successful business is a very rare thing - it is never that simple ! But when a successful one emerges then it is worth a look.

In the autumn of 1999 the executives of Southwestern Energy Co, a gas exploration and production company based in Arkansas USA, were meeting to discuss their business strategy. The company was struggling. They had lost a $109 million lawsuit and the the total value of the companies assets was greater than its capitalisation. They were wondering whether it was time to pack it in. “We were not healthy. No one wanted our stock” the CEO Mr Korell recalls. He remembers uncapping a black marker pen and writing:

in other words the Right people doing the Right thing by wisely investing the cash flow from Soutwestern’s Assets creates Value. Using this formula the company steered its way to success.

What was written on the board shows the relationship between people and the assets. The “right people” are those with the correct skills, experience and attitude for the business. Doing the “right thing” covers not only the activities in using the assets but also making the correct decisions about future assets. Therefore to improve the performance of the business the numerator of the formula shows that it is people that have the greatest impact on creating value.

Although the formula was derived by a business operating in the Oil & Gas industry where the assets are very large it can be used for any business no matter how small the assets, for example a coffee machine is a small asset in a coffee shop but it is critical to adding value - without it there is no business ! For businesses where the assets are knowledge e.g. consultancies, marketing companies, training etc , then the formula still applies. For example the knowledge assets can cover Intellectual Property, Trade Marks, licensing agreements, methodologies etc. And just like physical assets that wear out or are no longer generating any value, then knowledge assets need to be maintained or replaced with new ones.

So what makes this a good formula for a business? First, it is easy to understand - it doesn’t require graph filled reports to explain its elements. Secondly, it generates a series of questions e.g. do we have the right people doing the right things ? Are the people properly trained to take full advantage of the assets ? which assets should we invest in or sell to improve value generation ? and so on. The formula implies a disciplined approach - if the questions are not focussed on improving the elements of the formula then time shouldn’t be wasted trying to answer them. Finally, and most importantly, it can be quickly communicated and easily remembered, in the case of Southwestern it has formed part of their culture where it is known as “The Formula” and is so important that it has a trademark.

Sometimes business formulas can be viewed as being too simplistic - too abstract and not capturing enough of the complexities of a business to be of any use. But when they are found and used they the can provide clarity and direction to a business. In the case of Southwestern it was applied through focusing on the companies core competencies, increasing production, adding low cost gas reserves, improving efficiencies, lowering drilling costs, reducing debt and investing wisely. The companies capitalisation went from $187 million in 1988 to $2 billion in 2005. Today, it is a successful and vibrant company with a capitalisation of over $2.6 billion - proof that a formula can work !

Headlines regularly announce the latest scientific breakthroughs which promise radical improvements in the fight against illness.

They are eye catching: DEMENTIA BUSTER New wonder drug hailed as a ‘game changer’ in battle against Alzheimer’s, or Miracle made in Britain! How the microscopic substance graphene can make sea water drinkable and even fight cancer, and from a few years ago Personal Genomes Will Spawn Made-to-Measure Drugs. But the medication that my doctor prescribes can be tens of years old and sometimes work and sometimes doesn’t. So why does it take so long for a scientific breakthrough to make its way into an effective medication ?

To get from the eureka moment in the laboratory to an effective medication is very complex. First there is the scientific discovery which establishes new facts , or explanation, that answers a question: what is the cause of cancer ?, why do cells divide ? and why is the blue print for our bodies wrapped up in something called DNA ? Once something new has been discovered it has to be turned into something that can be used. This can require developing new: skills, equipment, processes, and techniques. Finally, it has to be developed into something that people can easily use to cure, or manage, their illness.

Straddling all the stages from scientific breakthrough to medication are many regulations, intellectual property rights, industry standards, etc. some of which may require changing before the medication can be used. Then there is the tension between science and commerce where ones priorities is to discover new scientific facts and the other wants to take the breakthrough and make money from it ( the gap between the two groups is often called the ominous “valley of death” ). Many steps through layers of complexity add up to a long time and lots of money before the new medication is available for use.

To illustrate the complexities in taking a scientific breakthrough into a medicine it is interesting to trace the history of something sits on most cupboard shelves - aspirin. The story starts around 400 BC in Greece, when Hippocrates gave women willow leaf tea to relieve the pain of childbirth. It took until 1823 for the active ingredient to be extracted from willow and named salicin. Then in 1853 Salicylic acid was made from salicin by French scientists but it was found to irritate the gut. It took another 40 years until German scientists found a way to reduce its irritant properties. Then through the late 1890’s a process for synthesising aspirin was developed, clinical trials completed and aspirin was launched. The application of aspirin is still explored today, for example in the reduction of cancer risk. Today it is the best known and most widely used medicine in the world with an estimated 100 billion tablets taken every year. The history of aspirin shows how long it takes from the initial scientific breakthrough to being prescribed by a doctor, or bought of the shelf.

Digging behind the headlines shown at the beginning of this post their underlying status can be found. For the Dementia Buster claim the results are at the Phase III of clinical trials ( there are 4 phases of clinical trials) However, research into a cure for Altzhimers is notoriously difficult with success declining at each phase of clinical trials. Fingers crossed ! In the announcement of using Graphene to cure Cancer - university medical teams are working with it to produce minuscule drug delivery systems that can penetrate patients’ tumours before releasing cancer-killing medicines. However it is at the laboratory phase and a long way to go before clinical trials ! Using the Genome for personalised medicine there has been more progress. Specific genetic disorders have been been identified, for example most inherited cases of breast cancer are associated with two abnormal genes: BRCA1 (BReast CAncer gene one) and BRCA2 (BReast CAncer gene two). There is also progress with gene-targeted cancer drugs and in particular helping to identify targeted cancer therapies for a wide range of cancers. Also, companies are popping up that can analyse an individuals DNA for a relatively low cost e.g. 23andMe but linking the results to medical conditions is still work in progress. Personalised, or precision, medicine continues to be a promising area of research let’s hope that it gets lots more support.

Every scientific breakthrough should be celebrated - increasing our understanding of the world and ourselves can only be a good thing. But caution needs to be applied when the breakthrough is proclaimed through media headlines - a dose of reality needs to be applied and realistic estimates given when we can get access to the new medication. Also, it will prevent embarrassing discussion with my doctor when I start “But I have read about …”.