Book Review by Andy Ghillyer
The increasing sophistication of systems technology is giving businesses access to more data on their operations than ever before. But the majority of those businesses use that data to react to problems rather than stepping back and looking at opportunities to proactively respond to what the data is telling them.
In his new book, Upstream: The Quest to Solve Problems Before They Happen, author Dan Heath argues that business leaders are stuck in a problem resolution pattern where they respond in firefighter mode to each problem as it reaches crisis level. By investigating why a problem is happening (“looking upstream”) you can focus your resources on preventing it rather than responding to it once it’s happening.
Barriers to Upstream Thinking
The assumption that a persistent problem is symptomatic of your process or your industry creates what Heath calls problem blindness. You devote time and energy to minimizing the consequences of the problem rather than really ‘seeing’ it and questioning its existence. Added to that is the inherent lack of ownership of the problem. If everyone is busy responding to it, no one really owns it or is assigned responsibility for fixing it.
Heath identifies a third barrier––tunneling––as being far more insidious. It’s not that business leaders are really unaware of the problem, they just don’t have the bandwidth to consider prevention when they’re so busy reacting to hundreds of little problems simultaneously.
Becoming an Upstream Leader
Once you’ve stepped back and identified the problem, the solution can be remarkably straightforward. Whether you call it a project team, a war room, or a skunkworks, the creation of a focused team of individuals is critical to success. As such, the key issues are the same as for any effective team––finding the right people, giving them the authority to change the system, developing clear metrics to track progress, and promoting the successful outcome as a model for others to follow.
With over 300 interviews, Heath presents a fascinating selection of detailed examples for each of the points raised. One of the simplest and yet most powerful examples of “upstream thinking” is the Expedia travel website. For every 100 customers who used the site, 58 of them would place a call to customer support for assistance. The number one reason for calling was to get a copy of their trip itinerary (flight, hotel, car). Twenty million calls for that reason alone, at an average cost of $5 per call made this an annual $100 million problem.
Expedia was experiencing the same problem blindness as many organizations in their situation, focusing on minimizing that $5 cost by reducing call length and diverting traffic through those annoying automated voice menus. Data analysis revealed why customers were calling for itineraries. The itinerary was sent after every transaction––often to an incorrect email address, to a spam folder, or mistaken by the recipient as an assumed solicitation and deleted.
Preventing the problem was simple––put a specific option on the voice menu (“press two to resend your itinerary”); place on option to resend or reprint on the website; change the email format to avoid spam filters. Reducing the average call length might have saved $10 million. Preventing the problem removed those 20 million calls altogether, saving $100 million and simultaneously underlining the simplicity of booking your trip on the internet.
Upstream offers a detailed path to preventing problems before they occur rather than wasting valuable resources constantly responding to them each time they happen.
Andy Ghillyer is a Contributing Writer at Soundview. He lives in Tampa, FL where he specializes in writing for the B2B and academic markets while raising a growing menagerie of cats and dogs. His other reviews are here.
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