My old friend Marcia Conner pointed me to this great piece yesterday Investing at the Bottom of the Ladder that discussed how “Companies that invest in their lowest-level employees are more productive and more profitable”. Personally I found this cheering and a nice counterpoint to the outsource everything, always reduce costs no matter what mindset that pervades so many companies. The data (and companies should always use data to make decision, after all) suggests that companies that invest more in their front-line, lowest level employees (store workers, drivers etc) are MORE profitable despite having higher costs.
The first thing this reinforced for me was that operational decisions matter – that little decisions add up. Although these staff only make decisions that have a small individual impact, they make so many that they have a huge cumulative impact. The micro decisions they make have a macro impact.
But it also got me thinking. A lot of the focus for decision management systems is on how to automate decisions to embed in completely automated systems. But many decision management systems are designed to provide suitable answers, appropriate actions to front-line staff: The pricing engine that one retailer embedded in their POS so that retail clerks did not have to do the math to apply the layers of discounts and loyalty offer pricing specials for their best customers; the retention offer engine so that call center staff immediately know which of the available offers is most likely to work with the customer on the phone; the claims engine so that call center staff can approve simple claims from established customers without referring them to claims adjusters; a dynamic check list system that uses the particular operation being performed and patient to generate a pre-op check list for the nursing team and so on. When I read the article it seemed to me that one way you could invest in your lowest level employees, and so boost your profitability, would be to give them these kinds of decision making systems.
Now there are those who would say that this is the opposite of the intent of the article – doesn’t such a system take away decision-making power from these employees rather than empowering them? But I disagree. The reality of many of these decisions is that they are both complex (with regulations and policies that must be followed) and opaque to a front-line worker (lifetime profitability models or risk models are involved, or data they are not allowed to see should be considered). Today what most companies do is say that these folks cannot make these kinds of decisions and make them refer customers to supervisors or other departments. The customer is irritated, the front-line staff unempowered. But build this decision into a decision management system and those front-line staff can help their customers act appropriately on your behalf. Refund the fee to a good customer, make the retention offer that is required to keep this customer, approve the claim for the distraught homeowner. And take these actions immediately.
Investing in decision management systems for your front line staff is not the only way you can (and should) invest in them but it can be a tool in your toolbox.