Great article Mark. Your example companies are obviously trying to minimize costs but I thought the goal in business was to maximize profits. Cost reductions that drive customers away will help drive costs toward zero, but revenue will soon follow in that same direction. And we customers do have options that enable us to take our business to competitors of American Airlines, Verizon, and other companies that don't treat us as important.
This is just like my favorite Financial Planner (Ric Edelman) asking if I want to avoid taxes or grow wealth. I will avoid taxes when my investments don't increase in value but that won't maximize wealth.
As you stated and as we all frequently experience, 70-80% utilization instead of 100% is often the best approach to maximizing profits.

The cost of an idle rep is easy to calculate but since we can't calculate the cost of an angry customer we just cross our fingers and optimize what we can calculate.

Sometimes you just have to do something because it is the right thing to do, not because you can calculate a cost savings.

Mark,
If you have had to chance to shop at WalMart or Kroger's Fry's stores recently, you would see in fact, that thinking has taken a stranlge hold of their registers. In fact, the 2 sets of 4 self ringing registers watched by a single employee via cameras looking down as you scan your own stuff has just been doubled to 2 sets of 8 self serving registers, again monitored by 1 employee. Wal mart has cut personal, cut benefits, cut hours of employees, made waiting times horrible during hours past 8 PM with only 1 register that is not self serve. I want to blame the stock holders for pushing the managers to increase profits and hold overhead cost to the utmost minimum. In the end, we can only blame ourselves for shopping and supporting these very tactics that should drive us away from this "dis-service". I really do not believe Sam Walton wanted his stores to end up what they are now.
John G.

I LIKE the self-check registers at Walmart. If I have a problem, there is still a person there to help. I find that I get out faster than with traditional check-out. I know Walmart is keeping costs down, which helps keep proces down.

As John G stated, blame the stockholders and ultimately ourselves. After all, it's your 401K manager and the analysts who work in his business that drive company executives to maximize financial performance - all for you. And they'll get fired if they don't do it. Seems like we've got a lot of power and attention as customers now, eh?
I'd love to see the reaction to an executive who says he wants to take the pressure off, decrease focus on financial performance for a while and focus on improved quality and service at a higher cost. As one of his stakeholders who expect your 401K to increase in value you'd be pretty skeptical.

Received a good comment via email:

"I read your article "How to Design Poor Service" and it was a great article.

Always a BUT though. You might want to go read Fredrick Taylor's books (in particular "THe Principles of Scientific Management"), because he was NOT a proponent of 100% efficiency.

He talks at length about machining and the 17 ket sceientific areas and just keepin the machine busy and fastest run time is a mistake.

Good article otherwise.

James Abbott
www.EffectiveCallCenters.com"

I guess I stand corrected. I still would argue that modern "Taylorist" or "Taylor-ish" thinking focuses on keeping everyone and everything 100% busy and that's a problem.