The Reinventor's Fieldbook: Tools for Transforming Your Government

In 1993, when Vice President Gore asked Bob Stone to be project director of his National Performance Review (NPR), one of the first people Stone recruited was an old colleague named Greg Woods. Woods, who had worked with Stone at the Defense Department, was running a high-tech company in New Mexico. But he was excited by the prospect of helping reinvent the entire federal government. They decided he should handle the "customer service" portfolio: his job would be to improve service throughout the government. Still, achieving the goal has created real pride in the organization. "There was a lot of internal celebration" when we met "the goal in 1997 and 1998," DeMarcos remembers.
Chapter 9

Customer Quality Assurance:
Making Organizations Accountable
for Service Quality

Customer Quality Assurance creates guarantees and standards of customer service, complaint systems and means of redress to make it up to customers when organizations fail to meet those standards, and customer boards, councils, and service agreements to hold organizations accountable for meeting them.

Woods immediately began contacting private companies that were legendary for their customer service, like Disney and Ritz Carlton, and pumping them for their secrets. Deputy Director John Kamensky, who had come over from the General Accounting Office (GAO), where he had drafted a report on reinvention in other countries, told Woods about the British Citizen's Charter. It required that all public organizations in the U.K. adopt customer service standards defining the levels of service they promised their customers, among other things. Intrigued, Woods invited Diana Goldsworthy from the Citizen's Charter unit to visit the NPR.

Excited by what Goldsworthy told him, he called a meeting of people from federal agencies that served the most Americans: the Social Security Administration (SSA), Veterans Affairs, the U.S. Postal Service, the Internal Revenue Service, and a few others. He did a briefing on customer service standards and laid out an idea for one standard at each agency, to trigger discussion.

Woods knew that the SSA's toll-free number was important to millions of people. So he suggested that the agency promise that every citizen would get through on their first call. Only a few years old at the time, the 800 number was already the most heavily used in the world, with 60 million calls a year. But the agency was having trouble keeping up with the demand. Customer satisfaction had fallen for four years in a row, in part due to problems callers had reaching someone on the phone.

Toni Lenane, then the chief policy officer at the agency, attended the briefing. Woods remembers her reaction well: "She said, 'That's insane!'"

He asked what she meant. "She said, 'You've got to understand, currently we can't answer anywhere near 100 percent of the calls. The idea that we would invest the money to add the system and operators to do this is just not feasible.'"

But Greg Woods rarely takes no for an answer. He began talking with others at Social Security, finding allies. Larry Thompson, the acting commissioner, was receptive. Toni Lenane kept listening as well, as Woods argued that the agency could find new technologies and new methods to deal with calling volume by learning from business. When Shirley Chater, president of a women's college in Texas, was nominated to be commissioner, Lenane briefed her about Gore's and the NPR's interest in customer service. It turned out Chater had been working hard to improve customer service at her college. In her confirmation hearings, Woods remembers, "She was talking about world-class service-making it clear that customer service was something she absolutely, positively believed in."

So Woods kept pushing. He sent Lenane draft language for standards, which included his idea on the 800 number. He negotiated with Thompson and Lenane almost daily. Gore's report was scheduled to be released on September 7. As the deadline loomed, the phone conversations migrated into the late evenings. "I just hung in there," says Woods. "I was telling them, 'Well, I won't be able to include you in the book. I'll just have to take you out, and tell the VP, and we'll just go with the postal service,'" which had agreed to standards. "And finally they came through."

The Gore report prominently featured a promise from the Social Security Administration to post four performance standards in its offices.

  • You will be treated with courtesy every time you contact us.
  • We will tell you what benefits you qualify for and give you the information you need to use our programs.
  • We will refer you to other programs that may help you.
  • You will reach us the first time you try on our 800 number.

When Lenane and her colleagues managed to get complete data on the 800-number service, she says, they realized that she had been right: it was impossible. At the busiest times of the year in 1993, half the calls got busy signals. At the best times, 18 percent did. Every time payments went out at the beginning of the month, calls flooded the number. After weekends and holidays there were other huge "spikes." On most days, volume crested between 10 A.M. and 2 P.M., then fell off.

And the agency couldn't ask just anyone to answer the phone. Fielding questions from anxious senior citizens about their retirement checks requires knowledge, patience, and courtesy. The agency had already considered contracting the service out and decided it wouldn't work. Its phone people prided themselves on their customer service. They knew a tremendous amount. And they required significant training. Agency leaders simply didn't trust private contractors to provide the required quality of service.

So the agency put together a team and began studying its dilemma. In response to the NPR pressure, it had launched a series of new, more detailed customer surveys. When the team analyzed the new data, it was clear that Woods's instinct had been right: endless busy signals on the 800 number damaged the agency's reputation with its customers."Our data showed that access was the single biggest driver for customer satisfaction," says Lenane. "Getting through to the 800 number influenced the public's perception of our competency and knowledge and their overall satisfaction."

One of the surveys said, "From the time someone first tries to call the 800 number, it would be good service if he/she is able to get through within (blank)." The median answer was five minutes. If callers got through in two minutes, the agency could please nine out of 10 people.

"We knew we wouldn't be able to hit two minutes," says Lenane. "So we chose this median." In 1994, as Woods prepared a progress report on the customer service initiative, she negotiated to change the standard.

Woods pushed hard, telling Lenane, "You can't give ground on this, this is very visible in our report, from the vice president's office." With Gore's authority behind him, he had real leverage. "We went over and over and over it," he remembers. "Finally, we kept some things as standards and others as goals. What was essential-what I hung on to-was that they were committed in writing to someday get there."

The NPR's September 1994 report listed a series of new commitments from the Social Security Administration (SSA)-more specific this time and again featured prominently in the book. They included the following:

  • If you request a new or replacement Social Security card from one of our offices, we will mail it to you within five work days of receiving all the information we need....
  • When you make an appointment, we'll serve you within 10 minutes of the scheduled time.
  • SSA knows that you expect world-class service in all your dealings with us. Today we are unable to meet your expectations in all areas, but we are working to change that. When we redesign our processes, you can expect that when you call our 800 number, you will get through to it within five minutes of your first try. Today we often are not able to meet this pledge. During our busiest days, you will get a busy signal much of the time.

Almost no one familiar with the 800 number thought meeting the five-minute standard was possible. The number of calls kept rising, and Congress kept giving the agency more responsibilities. To make matters worse, downsizing was now under way, thanks to the president and Congress's agreement to cut federal employment. The agency was no longer even allowed to replace teleservice representatives (TSRs) who left. The "busy rate" was going up, not down: in fiscal 1994 the monthly low was 28.4 percent, the high 53 percent.

Yet because of their surveys, the agency's leaders knew how important access to the 800 number was to their customers. They knew the NPR was pushing for good reason. So they got to work. They led a benchmarking study the NPR did on telephone service, looking for operational changes and new technologies they could use. They considered hiring temporary employees for peak periods but decided their limited use would not justify the high cost to train them. Finally they began increasing the number of people from their Program Service Centers (PSCs), which did back-office processing of individual benefit cases, who also handled phone service when volume spiked. They knew full well that benefit processing would suffer, so at first they went slowly.

At this point, the new Republican Congress weighed in. In his budget hearings in April 1995, Congressman John E. Porter (R.-Illinois) extracted a series of performance commitments from the SSA, as part of the Government Performance and Results Act (GPRA) process. One was that 85 percent of calls to the 800 number would be answered within five minutes during fiscal 1996, and 95 percent in fiscal 1997.

Agency leaders had concluded that hitting the five-minute standard on the highest-volume days, on every call, would cost a fortune. "We had to say, the rule of common sense has to apply," says Jack McHale, deputy regional commissioner for the Philadelphia region. "Every hour [that] one of those benefit authorizers is on the telephone answering calls is an hour away from their regular work." Beneficiaries would suffer in other ways, by not having their claims processed on time. Greg Woods also agreed to the 95 percent goal.

But the fact that congressional appropriators were taking the standard seriously changed the stakes. Money talks. "We call it a Porter commitment," says Steve DeMarcos, then deputy director of the Mid-Atlantic PSC. "This is a commitment we make to Congress, where we say, we will deliver this level of service, and thereby continue to be able to receive budgetary considerations." GPRA "not only gave it teeth, but it made it a very, very clear and focused goal that everybody knew and everybody was shooting for."

Just as Porter was extracting his commitment, the agency received a huge shot in the arm. In April 1995, Business Week reported that Dalbar Financial Services Inc., after an independent survey of customer service over the phone, had rated the SSA's customer service the best in the country. It topped that of L.L. Bean, Federal Express, Disney World, and every other private corporation tested.

Dalbar placed calls to measure performance, explains Lenane. "We did very poorly on access but very well on competency and knowledge. And in their scoring, those were the things they valued."

This was a huge boost for those pushing for the resources necessary to meet the 95 percent standard. "It helped a great deal," says McHale.

While as an agency we were struggling to get the budget commitment for the TSR replacement and get the spike commitment, boy, did that get us favorable attention. That got us in the headlines. It was much easier to say afterward, "If we want to continue in our world-class status, we have to do these things."

The employees loved it. We had a celebration. Every employee got a copy of the Dalbar letter, and of course the agency got a Hammer award [from Vice President Gore] out of that. We were able to say to employees, "Hey, we're better than Disney World, you know!" It really was a boost in morale for employees.

Unfortunately, the access rate was still going south. In fiscal 1995, only 73.5 percent of callers got through in five minutes, the worst rate yet. The monthly busy rate went from a low of 35.5 percent to a high of 61.8 percent.

Finally, agency and administration leaders bit the bullet. First, they agreed to replace teleservice representatives when they left, despite the downsizing effort. Then they converted two Data Operations Centers (DOCs), with about 700 people, to full-time telephone work.

These two centers had low-level employees who spent their days keying information into computers. It was not clear that they could handle telephone work. "There was a reaction: 'You're going to do what?'" remembers Janice Warden, then the deputy commissioner for operations. The agency did have to spend more time than usual training them, but it worked. "It changed a lot of people's mind-sets about what we could do, because we found out that these people were perfectly capable of becoming teleservice representatives."

Finally, agency leaders decided to expand teleservice responsibilities to virtually every technical person who worked in a PSC, starting in January 1996. They trained 3,700 people in six large processing centers to handle calls when volume spiked-more than tripling the number of "spikers."

"We worked out a sophisticated call routing system, with the ability to quickly bring these people on during peak calling periods," says Jack McHale. "When calls fell off, they went back to their work."

This required a mammoth training program and a long effort to win the support of the union, part of the American Federation of Government Employees. The key factor was job security: automation was expected to do away with some of the processing center jobs, so shifting to telephone service saved people's jobs. Once they had won union support, Warden, Larry Thompson, and the union council president spent two months visiting the PSCs that were going to have to change.

These folks "did not do public contact work," remembers McHale, "and many of them were not at all interested early on in interviewing the public on the telephone. A lot of them resisted."

We spent "an enormous amount of time with employees, talking about the reasons we were doing it, and relating it back to the customer: customer expectations, the results of our survey," adds Warden.

Managers followed up in their own facilities. Larry Massanari, regional commissioner for the Philadelphia region, remembers those meetings. "The key is always to keep people in an agency like this one focused on customer service," he says. "Because the employees in the SSA, not surprisingly, are very much moved by serving people. And when you can put this in terms not of a number but what it means for people-who are like our parents, our brothers and sisters-then it takes on more meaning."

Meanwhile, the agency restricted leave for teleservice reps and spikers at peak times and accelerated use of overtime. It worked with employees to come up with changes in processes and rules that would improve performance. And because calls peaked after people received payments at the beginning of every month, it began staggering monthly payments for all new recipients. (Surveys had revealed that existing recipients would not take kindly to shifting away from the beginning of the month.)

The transition was hardly smooth. As the agency retrained thousands of people, customer service suffered-both in the processing centers and on the phones. November 1995 was the low point for 800-number access: only 57.2 percent of callers got through within five minutes. Then, on the first morning back to work in January 1996, as the agency put all the new spikers on to handle the post-holiday surge, AT&T's SSA 800 system crashed. Hundreds of thousands of social security recipients called in, and for several days they all got busy signals. The media gave the agency a drubbing, and agency leaders lost a lot of credibility with their employees.

But once AT&T fixed the system, the numbers began to turn around. By February the five-minute access rate was 92.1 percent, and it stayed in the 80 and 90 percent ranges for the rest of the fiscal year. In November 1996 it hit 95.9 percent, and it has stayed above 95 percent every year since. Meanwhile, customer ratings of the courtesy and knowledge of the agency's teleservice reps remained more than 95 percent positive.

It hasn't been easy. "We still really torture ourselves in terms of trying to make up for a very few days of the year [after holidays and long weekends] when you can't do 95 and five," DeMarcos told us in mid-1999. "You just can't do it on some days, and because those days come out so much lower than 95 and five-and because they're so high volume-it takes you forever to make up for them."

Agency leaders acknowledge that the improvement in 800-number service has come at the price of decreased performance in benefits processing. Many believe the agency has gone too far-that it would be much better off with a lower standard for the 800 number and faster turnaround in benefits processing. Others defend the standard, pointing to the customer surveys that prove how important access to the 800 number is to the agency's customers.

When you do it one year, two years, now into the third year, it really becomes a part of your culture. Internally, if you were to talk to all the people on the network ... they know the 95 and five commitment. People know that, and that's what people work toward now. That's what drives us.

Agency leaders also agree that it would not have happened without the service standard. Jack McHale, who was then in charge of the 800-number service, had been lobbying for many of the changes for a long time. "We had to improve, because we were so bad," he says.

But I don't think we would have stretched as far as we did. As someone who was asked what we needed to do to meet this standard, I would come up with these recommendations, and I could always lean on the standard. I could always do calculations of how short we would be. Had the standard not existed, we would have improved, but not as much.


The SSA story demonstrates how powerful service standards can be in driving public organizations to deliver what their customers want, when those organizations take them seriously. In September 1993, a few days after Gore presented his report, President Clinton followed through on its recommendation to issue an executive order requiring all federal agencies and departments "that provide significant services directly to the public" to identify and survey their customers, set service standards, and measure progress against them. The order proclaimed that "the standards of quality for service provided to the public shall be: Customer service equal to the best in business."

By fiscal year 1998, according to the NPR (now the National Partnership for Reinventing Government), 570 federal organizations had created 4,000 standards. But they measured performance for only 2,800 of them, and unlike the SSA's standards, the vast majority were quite vague. So in 1998 the president ordered the agencies to talk with their customers about their service and standards and to use what they learned to improve both.

Though progress has been gradual, the entire process has clearly had an impact. In a survey of federal managers conducted by the Office Of Personnel Management in 1991, only 36 percent agreed that their organizations had "service goals aimed at meeting customer expectations." When the National Performance Review asked the same question in a 1998 survey, 80 percent of supervisors agreed.

By 1998, according to the NPR:

  • The National Archives and Records Administration met this standard 99 percent of the time: "Within 15 minutes of walking in, you'll have either the information or the help you need."
  • The Occupational Safety and Health Administration had reduced a one-month turnaround time for responding to worker complaints to one day.
  • The Bureau of Land Management had trimmed turnaround time for permits from 15 days to a few minutes.
  • The U.S. Postal Service had boosted on-time (three-day) delivery of first-class mail from 79 percent in fiscal 1994 to 92 percent in fiscal 1997, though it was doing far less well on Priority Mail and Express Mail.

Every public organization can use quality assurance tools: customer service standards and guarantees, redress systems (to provide compensation to customers for failure to meet standards), complaint systems, customer service agreements, and customer councils and boards. Customer quality assurance is much like performance management, but it makes public organizations accountable to their customers, not just to their superiors in the chain of command. Like performance management, it creates less pressure-and thus slower improvement in most cases-than other approaches, such as competitive customer choice. But it works.

In the U.K., which pioneered customer quality assurance, the Labor Party conducted an in-depth review of the Citizen's Charter in 1998, after it came to power. By then there were some 200 national charters and an estimated 10,000 local government charters, each setting service standards, most outlining complaint systems, and a few promising redress to customers if the chartered organization failed to meet a standard. The review found that although many standards "were vague, unclear and missed the issues that were most important to users," as in the United States, others were quite effective. It quoted several other positive assessments:

  • "The Charter programme has provided both a stimulus and a means for organisations to raise their performance," the National Audit Office testified.
  • "The Citizen's Charter is an important initiative in making public services more responsive to consumers and should be retained," added the National Consumer Council.
  • "There are tangible benefits from the Charter programme which have persuaded at least some of the original sceptics," concluded Parliament's Public Service Committee. "There have indeed been real improvements, a 'change of culture' in public services."

The Labor Party pledged to continue and strengthen the program, though it made sure to remind citizens that "the Charter idea was pioneered by Labour local authorities in the 1980s." It also gave the initiative a new name, "Service First," as political parties often do when they embrace the opposition's ideas.

The basic tool of customer service standards makes so much sense that at least 15 countries have adopted it in some form, including Australia, Canada, Belgium, France, Ireland, Italy, Finland, Norway, Sweden, Portugal, Spain, Singapore, and, of course, the U.S. Some, like Australia and Canada, have done so in both national and state or provincial governments.

Survey research in Canada demonstrates why customer service standards have such appeal. The Canadian Centre for Management Development's Citizen-Centred Service Network surveyed 2,900 Canadians in 1998. After asking about 30 different aspects of service delivery, it found that "Citizens' assessments of service quality are determined primarily by five factors: timeliness, knowledge and competence of staff, courtesy/comfort, fair treatment, and outcomes.... Timely services is the single strongest determinant of service quality across all services across three levels" of government. As we saw with the SSA, it is precisely these factors that service standards can improve, when used well.

Customer quality assurance has one final advantage: employees usually welcome it. Unlike managed competition and competitive choice, it is rarely threatening. Most employees genuinely want to provide excellent service.

The Key to Success: Making Customer Service Consequential

Perhaps the most important lesson learned by the pioneers of customer quality assurance is this: when you create standards, guarantees, complaint procedures, and the like, create rewards for fulfilling them and penalties for failing. As with customer choice, consequences give this approach its teeth. Service standards, complaint systems, service agreements, and customer councils will help managers and employees understand what their customers want, but consequences will give urgency to the challenge of providing it.

Consider the Social Security story. Though the SSA's leadership understood that service on its 800 number was critical to customer satisfaction, answering every call within five minutes-or even 95 percent of all calls within five minutes-seemed impossible. If Greg Woods had not used Vice President Gore's authority to cajole the agency into publishing a standard and then reported its performance every year, it would never have committed to the standard. If Representative Porter had not demanded that the SSA meet the standard or suffer budgetary consequences, the agency might never have gone to the extraordinary lengths it did to reengineer its work.

Or consider the U.K. When the Labor Government reviewed the Citizen's Charter, "Many said that, at present, the public can feel frustrated when they discover that little can be done to enforce charter targets." Without enforcement of consequences, in other words, standards pack much less punch. There are several ways to create this enforcement-all of which have been used by at least a few organizations in the U.K.

  • Create guarantees and redress policies. Guarantees commit public organizations to give customers who are not satisfied-or have not been delivered the quality of services promised-either their money back or free redelivery of the services. Redress gives customers some form of compensation-financial or otherwise-if the organization fails to meet its service standards. We discuss these tools in detail later.
  • Build service standards into your performance management system. The Social Security Administration holds some top managers accountable for meeting its service standards; if the organization fails, it affects their pay. Many of the U.K.'s executive agencies, which we discuss in Chapter Three, have begun to include key service standards among their annual performance targets-which also affect top management's performance bonuses.
  • Publicize and compare performance against the standards. NPR's annual publication of the SSA's results was a big part of what kept it from abandoning its 800-number standards. "I think part of what helped transform them was we kept reporting on it," says Candace Kane, who succeeded Greg Woods as head of the NPR's customer service team. "They knew that they were going to be publicly humiliated if in fact they hadn't delivered what they needed to deliver."

    In the U.K., the Citizen's Charter led to the publication of comparative data on local governments, schools, hospitals, and passenger rail lines. This, the government concluded after its review, "was considered by many respondents to the consultation exercise to be a major success of the old Charter programme." The Labor Government promised to expand public reporting on performance. "The key is for standards, and performance against them, to be regularly published, so that they are available to all," it said.

    When there are problems with service delivery in the U.K., the published information gives the media, the government, and interest groups the facts they need to press for improvement. The performance of privatized rail lines has been disappointing, for example. Virtually every time the press or a politician calls attention to the problem, they cite the number of complaints against the rail line, the numbers of delays and cancellations, and the amount of redress money paid. The private railroads are required to provide this data by the charters they inherited from the public sector, and the government posts the information company by company on the World Wide Web. Though the railroads have at least seven-year monopoly franchises on individual lines, publishing their performance against service standards keeps significant pressure on them to improve.

  • Create awards for meeting tough customer service standards. The Social Security Administration gives awards to teleservice centers for outstanding service. Vice President Gore gives out Hammer awards. The U.S. Department of Education has an "honor roll" to recognize achievement in "satisfying customers." The IRS awards a "Seal of Approval" customer service award. The Federal Emergency Management Agency (FEMA) allows employees and customers to nominate FEMA workers.

    Many other organizations have done likewise. One of the most successful elements of the Citizen's Charter was its Charter Mark: a seal of approval for customer service that winners are allowed to display on their buildings, stationery, and other materials for three years. The criteria for receiving a Charter Mark are demanding, and the competition is fierce: in 1998 there were 1,202 applications, from all levels of government.

    The Labor Government's review found broad support in the public sector for the Charter Mark awards. And surprisingly, 29 percent of the public was aware of them. Prime Minister Tony Blair takes the awards so seriously that he speaks at the annual ceremony.

    One of the Charter Mark award's best features, in our view, is that organizations win the right to display the Charter Mark for only three years; to win again, they must continue improving their customer service. By 1999, only 18 organizations in the country had won Charter Marks three times in a row. The threat of losing a Charter Mark puts real pressure on winners. British Gas won in 1993, then saw its customer service slip after it was privatized and began downsizing. Rather than suffer the embarrassment of losing it three years later, it handed its Charter Mark back to the government-which of course attracted great publicity.

    Kent County Council's Arts and Libraries won in 1992. "I think we felt much more anxious about it this time," Development Manager Maggi Waite told the Charter News in 1995, "because in 1992 we had nothing to lose by applying. This time our reputation was at stake.... The suspense in the fortnight before we received the results was awful-just like waiting for your exam results."

Customer Quality Assurance in Compliance Organizations

Some public organizations don't primarily deliver services; they enforce compliance with rules. These include police forces, court systems, corrections systems, environmental protection agencies, permitting agencies, tax collection agencies, and the like. Their activities may include services-such as a 911 emergency phone system for the public or free help lines for taxpayers-but their core missions are the enforcement of laws and regulations. (Occasionally, the same people are both customers and compliers. Welfare recipients, for example, are compliers with state and federal laws about who is eligible for welfare, but customers of welfare services such as monthly checks, job training, and job placement. As we discuss in Chapter Three, welfare departments should separate their compliance functions from their service functions, because the two roles conflict so much that one staff person cannot effectively play both.)

Can compliance organizations use the customer quality assurance tools? Yes, with some adjustments. Normally, their customers are not the people they deal with directly but the community at large, represented by elected officials-as we explain in the introduction to Part Three. We call the people that these organizations deal with day in and day out-taxpayers, suspected criminals, polluters, and so on-compliers. Compliance organizations can use quality assurance tools to improve their service to compliers, as a way to improve voluntary compliance. They can treat compliers as if they were customers. But when they do, they must balance the interests of compliers against those of their true customers. Tax collection agencies don't want to please taxpayers by letting them off the hook for taxes they owe, for example.

Many compliance organizations are now using the quality assurance approach as part of what we call "winning compliance." They have shifted some of their energies from catching noncompliers to encouraging voluntary compliance-which is the cheapest form of compliance. Quality assurance is harder to use in most compliance organizations than in service organizations, because their employees don't (and often shouldn't) think of compliers as customers. They more often see them as "deadbeats," "criminals," "polluters"-or other words we won't print. Hence it is harder to get them to buy in. "They have the enforcement mentality," says Peter Hutchinson, president of the Public Strategies Group. "Since all they see are deadbeats, day in and day out, they can't imagine treating them like valued customers."

But it can be done, and increasingly it is being done. The Public Strategies Group defines eight steps that go into winning compliance:

1. Build support for standards, if possible, by involving compliers and other key stakeholders in helping to make or even enforce the rules.

In the early 1990s, the Massachusetts Department of Environmental Protection (DEP) accomplished a sweeping reform of its permitting systems, including dramatic reductions in the time required, one-stop shopping for most permits, and reduction of the number of permits required. The crucial ingredient in its success was the inclusion of environmentalists and business leaders in a series of stakeholder groups to redesign the state's rules and processes. The first group began by doing an inventory of all 137 permits required by the state and describing the processes associated with each. This pinpointed where backlogs were occurring, where too many steps were required, and where permits were unnecessary. When business and environmental leaders agreed on solutions, the legislature was often willing to act.

The federal Occupational Safety and Health Administration went even further: it gave control over enforcement to large businesses that developed teams of managers and union members to perform inspections and solve problems. Workplace safety improved dramatically in those plants. The Vermont Department of Corrections even let some nonviolent offenders negotiate with community boards to define their penalties-and how they would make restitution to their victims and the local community. Recidivism rates fell.

2. Focus regulations on results, not process.

Many regulations prescribe exactly how compliers have to comply with the law, particularly in the environmental arena. They tell them what technology they must use, how it must be installed, how often it must be inspected, and so on. Often compliers know there is a better way, but the law won't let them use it. Reinventors have begun to substitute regulations that define the outcome required, but leave it up to compliers to figure out how to produce it. If a new technology will meet the goal at a lower price, they are free to use it. This not only makes it easier for them to comply, it stimulates innovation to find better and cheaper methods.

3. Educate compliers about what is expected of them.

When the Minnesota Department of Revenue shifted hundreds of employees from enforcement work to educating businesses about how to pay the proper amount of sales tax, it increased sales tax collections dramatically. The U.S. Customs Service similarly shifted part of its staff from inspecting goods brought into ports and airports to working with importers "so we can rely on their internal control processes," as former commissioner George Weise put it.

"Those out to break the law will continue to be apprehended," explained Dennis Murphy, then director of the Norfolk, Virginia, Customs district, "but we're moving from what you might call a 'gotcha' focus, in which we just try to catch somebody, to one of trying to make sure that the people we deal with understand what's required of them so they don't make mistakes based on ignorance, sloppy work or poor communications."

4. Make compliance easy, by providing services that facilitate it.

The Massachusetts DEP invited businesses planning large projects that required multiple permits to come in early in their planning process. Businesses would map out what they intended to do, and the department would help them design the project to minimize the number of permits required. This worked so well that the department decided to establish four regional service centers. It hired new staff to act as lead contacts, to shepherd businesses through the process. They and others used analytical techniques drawn from Total Quality Management (TQM) to find out who had the most permitting problems and then invited those businesses, municipalities, and consultants in early in the planning process.

Other states have since taken similar steps. California introduced "tiered permitting," replacing one-size-fits-all permits with different types based on the level of environmental risk involved. The California Environmental Protection Agency also established ten "one-stop" permitting centers around the state, to help developers get all the permits they needed for a project in one place.

5. Establish quality guarantees, standards, and redress mechanisms for service to compliers.

The first stakeholder group at the Massachusetts DEP recommended a money-back guarantee. Permits would have to be issued within strict time limits, and if the department missed a deadline, it would return the fee. The legislature passed the necessary legislation, and "it was the single best thing we did," then-commissioner Dan Greenbaum told us.

It created a dynamic like a business trying to collect a fee for a service. It provided impetus for management reforms, like a real tracking system so you would know what was happening with each permit.

Staff told us they'd need lots more people to meet the time lines. We managed to get a few new people from budget, but then further cutbacks frustrated even that. We got like a tenth of what people thought they needed. But we met the deadlines the first year; it turned out there was a lot of slack in the system. Part of it was poor management: for example, no tracking system. And part of it was that the department had people who were environmentalists and believed that by delaying things they were protecting the environment.

Greenbaum used a two-stage process to give the organization time to improve: after the first year, the deadlines automatically tightened by 30 percent. But over the first four years the department missed only 75 deadlines out of 14,000. Word got around about which regional and program offices were refunding the most fees. "There's a certain pride in not being the one to show up as doing the worst," said Greenbaum's successor, Thomas B. Powers.

6. Report to the public on compliance levels, and give compliers feedback on their level of compliance.

If taxpayers are told that they have filed incorrectly, or businesses are informed that they have violated an environmental rule, most will correct their mistakes. Even police forces use feedback to change the behavior of citizens. Captain Michael Masterson of the Madison, Wisconsin, police department describes a particularly good example.

Instead of going out and writing tickets in one neighborhood, we went out and set up individual speed display boards and took neighborhood residents with us. We did a little poster, a little warning notice that talked about fines for speeding. It was during the holiday, so we [gave] people a holiday greeting. But anybody that speeded, not only did the cop talk with them, but the resident talked to them too. In a very cordial, nonthreatening way, we said, "Look, this neighborhood is important, our children play here, they use this sidewalk, and the speed limit is 25."

They got off with a warning. We got an incredible response. The people that were stopped felt it was great that the police dealt with people in this manner. The neighborhood thought it was a great effort working with them, helping them create an awareness of the problem. And the officers thought it was great. Officers have hearts; they don't like to be laying $100 tickets on somebody around Thanksgiving and Christmas.

7. Treat compliers differently, based on their past performance, competence to comply, and motivation levels.

There is little sense in treating law-abiding citizens who have made a mistake the same as habitual lawbreakers. The police don't do it, the courts don't do it, but many compliance agencies do. Before it reengineered its sales tax process, the Minnesota Department of Revenue sent the same nasty letter to any business that missed a deadline for payment of the tax. After the reforms, it reacted very differently, based on the past performance of the business. If it had a perfect record, it sent out a very nice letter noting the missed deadline, mentioning that the check was probably already on its way, but reminding the business owner of the oversight. A series of other letters, each slightly tougher, went out to those with less than stellar records. And state revenue collectors visited habitual nonpayers-sometimes with police protection.

8. Employ a continuum of incentives and consequences for compliance.

Refunds and other forms of redress help salve the wounds inflicted by poor service, but they don't create incentives for people or businesses to comply. Governments usually use sticks, not carrots, to do this: they create stiff penalties, including fines and jail time, for failure to comply. Reinventors don't abandon the sticks, but they add carrots. The Minnesota Revenue Department announced that if you got your tax return in by a certain date, for example, you would get a refund within 48 hours. Normal turnaround was 24 days.


Because using service standards, guarantees, and redress has a lot in common with using other performance goals, we recommend Chapters Six and Seven as well as this one for guidance. Many of their lessons apply here as well. In addition, the following lessons apply to all or most of the customer quality assurance tools.

1. Involve customers in the creation of guarantees, standards, redress policies, complaint systems, and customer service agreements.

If you don't, you won't know what is important to them. When the Oregon Division of Motor Vehicles was reengineering its offices, its leaders "knew" their customers' main concern was long lines. They planned to add clerks and automate the process. But when they surveyed those customers, it turned out that their top complaint, by a wide margin, was unflattering pictures on their drivers' licenses. So they reengineered that too.

"Never assume what people want," says Steve DeMarcos at the Social Security Administration. "Find out from the customers. You can kill yourselves to do something that you find out people think is a yawner."

In both the U.S. and the U.K., many organizations have neglected this step-and paid the price with worthless, or even harmful, standards. "The place agencies have had the most trouble is the idea that they have to ask their customers what they want and whether they're getting it," says Greg Woods. "They revert to the Washington mentality: we figure it out in D.C. So they always get it wrong."

Customer surveys are useful here, but face-to-face contact with customers is even more important. Customer councils are perhaps the best tool, though you can use many of the customer voice tools outlined later in the chapter. "It is really valuable for people to see and speak directly to their customers," says Laurie Ohmann, a Public Strategies Group partner who has helped several organizations do this. "Get the people who are charged with doing the improvements to look at people they're serving square in the face and ask the questions." You can even videotape the sessions and show them to the rest of your organization.

This not only helps generate standards that are meaningful to your customers, it helps convince your employees to take them seriously. They have to be "connected to what the customer has actually told you in the surveys and from discussions," says the SSA's Janice Warden, who now works on these issues as a deputy director of the NPR. "You have to be able to point to that, to make it credible to the entire organization." Otherwise, she says, you will run smack into this attitude: "Let's not kid ourselves. Are we doing this because it's important or because Vice President Gore told us to?"

2. Educate customers about your services, so they will have realistic notions of what is possible and will understand their own responsibilities.

If people think it should be simple for them to call the SSA's 800 number and reach a knowledgeable employee right away, they will be disappointed if they have to try for five minutes. If they know, on the other hand, that the SSA runs the world's largest toll-free service and that it gets more than 65 million calls a year, they may feel differently. So tell them. Put an explanation on a tape that plays as they wait on hold. Send one out with their monthly checks. Put signs and pamphlets in your offices.

Often, services won't work unless customers uphold their end of the deal. For example, tax agencies can't send speedy refunds if taxpayers don't fill out their returns completely and accurately. Permit offices cannot process permits rapidly if developers hide information from them. In cases like these, add customer (or complier) responsibilities to your service standards and guarantees-and publicize them.

3. Keep pressure on from outside the organization to create meaningful guarantees, standards, redress policies, and complaint systems.

As we saw at the Social Security Administration, setting meaningful standards and then fulfilling them can take almost heroic efforts. Most organizations won't do that-or will only do it until the leader who drove it moves on. So you need some external force that keeps the pressure on-forever.

In the U.S., the NPR played this role, as best it could. In the U.K., publication of performance data kept external pressure on railroads, schools, local governments, and hospitals. Another good method is a customer council or board with real power-a tool we discuss later in this chapter. Diana Goldsworthy, former deputy director of the U.K.'s Charter unit, says the British would have benefited from the presence of such a customer council:

The truth is that the Charter unit itself, inside the Cabinet office, is all civil servants reporting to a minister. It's very difficult for us, credibly, to present ourselves to the tabloid press as people who go and kick down doors. But that role ought to be exercised by somebody. We could have had this outside panel being the nasty guys, in the press and on the TV, saying, "I'm just going to make sure that Charter does this and Charter does that, and I've told John Major today ..." I think it's difficult to have people who are inside the machine, if I can put it that way, also be the people who are beating your sheet to death, publicly.

Even an elected minister or vice president cannot really do this, she points out. Imagine the media flap if Al Gore had publicly criticized Education Secretary Riley's or Labor Secretary Reich's department, and you can understand why.

4. Create an outside review process to approve guarantees, standards, redress policies, complaint systems, and the performance measurement processes associated with them.

Just as you need outside pressure, you need an external body to review and approve standards, redress policies, and the rest. Otherwise, vague standards that cannot be measured and have no means of redress attached-"We will do our best to provide timely, courteous service"- will be the norm. The review process should involve both customers (ideally through a customer council or board) and a neutral reinvention office such as the NPR or the Charter unit. In the U.K., the Labor Government has asked departments to review all charters at least once every two years, and the Cabinet Office has set up an audit system to check on the quality of charters and intervene when necessary.

When private contractors deliver public services, this is equally important. Because some private rail operators in the U.K. made their charters less uniform and harder for customers to decipher after they took over, the Cabinet Office had to force them to use a standard format. Many organizations, public and private, have quietly redefined what "on time" or "a 30-minute" wait means, as well. In the National Health Service, for instance, some clinics began to measure waiting time not when the patient arrived but when he or she first talked to the receptionist. Because this kind of fudging is inevitable-as with any kind of performance measure-an outside body also needs to review definitions, indicators, and measures to keep them honest.

5. Publicize your standards, guarantees, redress policies, complaint systems, and results.

If people don't know about these policies, they will have far less effect than they should. For example, the U.S. Postal Service has publicized its first-class on-time delivery standards (three days within the continental U.S., one day locally) and reported quarterly on its performance. The results have generated front-page newspaper stories, creating useful urgency within top management. But the postal service has been silent about another standard: "You will receive service at post office counters within five minutes." If you look hard next time you go into a post office, you may find a tiny, 4-inch by 5-inch sign announcing the standard. But you've probably never noticed it. As a result, it is meaningless to the customer. Nor does it seem to have had any impact on employee behavior, from our observations. It is, sadly, a wasted opportunity to win over the public.

Publicizing your progress is also necessary, at times, to convince your employees that you can improve. It was only when the five-minute-access rate at the SSA began inching up that employees started to believe the goal was possible, for example.

6. Involve frontline employees in creating standards and other tools-and in figuring out how to meet them-to help them buy in.

If standards and redress policies are simply imposed on employees, few will respond to the challenge. At the SSA, says Janice Warden, "I don't think we could have done it without really engaging the employees in discussions, getting their ideas about how we could do this better. We talked with thousands of them." The commissioner made the decision to set standards, but employee input was critical in figuring out how to meet them.

The British also learned this lesson. Their review pointed out that frontline employees had "often been ignored in the past." The government's guide, How to Draw Up a National Charter, added, "They are the people who will have to deliver the standards in your charter, and they are often well placed to offer practical suggestions for improvements, and to identify people or organisations who should be consulted."

7. Involve the union, if there is one.

To improve services, you will often need to redesign work processes, change work rules, change job descriptions and classifications, and the like. Unions can block such changes. Hence it is critical to get them on board. In the SSA, this took months of discussion, but it was worth it, says Janice Warden.

8. Empower frontline staff to make decisions.

When organizations fail to deliver the quality of service that they have promised or customers have legitimate complaints, frontline staff need to be able to make it right, immediately. If you have to wait three weeks for management to make a decision, you will alienate your customers. Lesley Harvey at British Gas, a privatized company with a charter, remembers a customer who ordered a new oven that turned out to be defective. "I just agreed to change it," she says. "Before, I would have had to refer it to a senior manager." But "there's nothing more annoying for a customer than to be told you can't make a decision, you have to refer it upstairs. This way, the customer has more faith in you."

9. Use standards, guarantees, complaints, and customer councils to drive redesign, reengineering, and restructuring.

There's only so much improvement you can produce by changing attitudes and getting employees to work harder. If customer quality assurance doesn't lead to reengineering work processes and restructuring organizations, as it did at the SSA, then it won't be worth using.

Customer-driven agencies typically organize around customers' needs, not organizational functions. They create single points of contact for customers, one-stop services, and integrated work teams to handle all of a customer's needs. They use TQM and business process reengineering to redesign their work processes and organizational structures. They use internal enterprise management to get better value from their suppliers, so they can serve their customers better. Sometimes they even convert their service systems to give customers more choices-or vouchers they can use to choose their own providers.

10. Study other organizations, including private companies, to see how you might rethink, redesign, and reengineer.

Studying the best in business gets you out of your box. "We would not be where we are with the 800 number if we had not participated in benchmarking, primarily with the private sector," says Toni Lenane of the SSA. "It just opens up this whole world that you never even contemplated might be there."

11. Back up your quality assurance approach with training, mentoring, learning networks, and other support for employees.

To improve customer service, your employees will need much more than "smile training." They will need new skills: the ability to do customer surveys and focus groups; the ability to analyze, improve, and redesign work processes; the ability to build teams. You will need to support them with training, expert consultants-and if you're smart, mentoring, learning networks, and site visits.

When John Christian took over the Parks and Recreation Department in Sunnyvale, California, he sent six people to Disney's customer service training program in Anaheim: clerical, frontline, and managerial staff. When they came back, they became the Customer Action Service Team-an internal training unit for customer service. Then he took a team to the Granite Rock Corporation, a California construction company that won the Malcolm Baldridge National Quality Award in 1992, "to see what we could learn from private companies." That was so effective that he institutionalized regular "benchmarking trips" to cutting-edge parks and recreation departments as well as private corporations. The key is to send not just managers, he told us, but also professional, frontline, and clerical staff. "That's very, very powerful."

In the U.K., the Charter unit has helped build 25 "quality networks" around the country, with over 2,000 public sector members that share what they are learning. It also sponsors an annual conference and a best-practice quality forum, which brings network leaders and Cabinet Office staff together to learn from one another. There is a mentoring system, through which Charter Mark holders provide support to other organizations in their regions. And finally, the renamed Service First unit is creating a self-assessment package based on the Charter Mark criteria so that organizations that aren't ready to apply can still use the criteria to figure out what they need to do to improve their customer service.

12. Don't create a separate unit to do this; integrate customer quality assurance into your strategic and performance management systems.

If you create a separate unit to handle service guarantees and standards, redress policies, and complaint procedures, then your line operations will see these things as headquarter's agenda, not their own. They may go through the motions, to comply, but they won't build their own work around customer service. You may need a reinvention office to catalyze action, but development of standards and the like should be done by line organizations-with review by a reinvention office and customers, as we argued in lesson four. Then make sure the standards are an integral part of your strategic and performance management systems, like any other outcome goals and performance targets. Don't treat them as something separate from your performance goals.

13. Make sure your leadership is seriously committed.

To succeed, you need commitment from your organization's leaders, their leaders, and your top civil servants. "If Shirley Chater and Larry Thompson had said to me, 'You've got to do this,' and Larry had then walked away from it, it would not have taken on the power it did," says the SSA's Janice Warden. It also helped that the vice president and president talked about service standards and the SSA's 800 number.

Then, says Warden, you have to "get the buy in from the top career executives-that layer that remains in place when the administration goes away. And you know, you do that through discussions. And there's the same credibility issue in terms of how the standards were established"-are they rooted in real customer needs?

What do you do if your organization's leader is not committed? Toni Lenane has a good answer:

I teach customer service at the Western Management Development Center run by the Office of Personnel Management, and what I frequently hear from agency people is, "I'm interested, but I can't get my boss to be." My advice is, find out the thing that'll make it worthwhile to them, so they'll get some kudos and some recognition. All it takes is your boss getting some success, and they'll become a believer.


Q: When the needs of different customers conflict, what do you do?

Often, public organizations have multiple sets of customers. Public schools, for instance, have parents, the community at large, and the future employers of graduates. Compliance organizations have both customers and compliers. Sometimes the needs of different customers conflict, and the needs of customers and compliers often conflict.

The first step is to carefully define your primary and secondary customers and compliers. Then ask each group what they want. When their needs conflict, you can sometimes work out win-win solutions. For example, if the public wants less pollution but business wants less burdensome regulation, you can reinvent your regulatory system, as the Massachusetts DEP did. The best method is often the one the DEP chose: create a customer or stakeholder council, which includes all major perspectives, and ask them to help you craft solutions.

Q: When more than one organization is involved in delivering the service or producing the outcome, what do you do?

Many outcomes that are important to the public involve the work of multiple organizations. Even some distinct services involve more than one organization. For example, when a public works department sweeps the streets, it usually relies on a police department to have the streets clear of parked cars. Often, this is so low on the police's priority list that it doesn't get done. The result: dirty streets and dissatisfied customers.

When customers tell you what is important to them, if it involves services from multiple agencies, bring the agencies together to develop mutual standards and policies, as well as reinforcing standards and policies. Have them report to a mutual customer council, if that is practical.

Prime Minister Tony Blair in the U.K., aware of how often this problem frustrates citizens, has made a priority of what he calls "joined-up government." "We are encouraging the development of new cross-cutting charters, which bring together information on related services," his government announced after its review of the Citizen's Charter.

When you create mutual charters-or even when you can't-another useful tool is a customer service agreement between agencies. For example, the public works department could negotiate a service agreement with the police department, specifying the level of service the police would provide in ticketing and towing illegally parked cars as well as the consequences if they failed to meet those standards.

Q: Won't guarantees, redress, and a complaints system cost too much, taking money away from investment in real customer service?

In a word, no. In fact, they will probably save your organization money. Budget offices may assume that money-back guarantees and financial redress will cost money, but if the funds come out of the organization's budget and the incentives in the