What Call Center Outsourcers Can Learn from Toyota

By Dennis Adsit

Here’s a challenge: try to be unimpressed about what Toyota has accomplished. From one small California dealership in the late 1950s, Toyota has just surpassed General Motors (GM) as the number one car manufacturer globally. Not only is this a stunning progress in gaining market share, Toyota’s operating margins are three times the industry average. Until the recent market carnage, Toyota’s stock was up over 200 percent since the early 1990s, while Ford and GM’s stocks were down 50 and 75 percent respectively. GM’s stock is now trading at the level it was in the 1950s.

The dissimilar results between the companies are even more stupefying when you realize that every car company in the world has had Toyota’s playbook for two decades. The Toyota Production System is known in every detail. Toyota even runs joint ventures with GM, showing them exactly what they do and how they do it. Despite this, no car company in the world can keep up with them.

What’s the secret?  I can tell you that it’s not the plays they run or the players who run them. Think about it: if an opponent hands you their playbook and they still run you over, can the secret be in the plays?  If their coaches worked shoulder-to-shoulder with your coaches and players, showing you exactly what they do, and still crush you year after year with different players, can the secret be the players?

Yes, Toyota makes good cars. But anyone who has worked in other manufacturing environments and then worked at Toyota quickly realizes that Toyota is doing something way beyond making good cars. They have developed an organizational capability that is continuously learning how to make cars better while continuously teaching every employee how to make cars better.

Cut to the global call center outsourcer and BPO (Business Process Outsourcing) world. There are dozens of global BPOs providing call center services. They are all global. They all have the latest call center technology stacks. They all have hiring processes designed by industrial psychologists. And they are all one-trick ponies when it comes to trying to improve the outputs of their agents: they monitor and coach. In other words, they are all the same.

A friend of mine, Alan Madison, who runs H&R Block’s customer service operations, states unequivocally, “I can safely say it’s a level playing field out there among the top ten BPO companies. Most are executing the same basic blocking and tackling game plan – some better than others – but there isn’t anyone bringing a new game to the field. The objective is to pick a BPO that has a solid blocking and tackling game, because you are definitely not picking a BPO due to its unique capability.”

This isn’t an article about Toyota. My intent is to highlight how a company can separate from the pack and totally dominate. So the real question here is: if an outsourcer actually wanted to develop a source of competitive advantage, how would they do it?  In my view, the success at Toyota suggests an answer.

If an outsourcer wants to pull away and dominate, the answer is not in adding more geographical locations, fine-tuning their technology stacks, adding a new agent selection test, or scheduling more coaching. Instead, they have to build a unique organizational capability that not only handles calls better but continuously improves call handling.

There are technologies available to support this effort. You can now clearly define a call handling process and get the agents to follow it using preprogrammed system actions and prerecorded audio files. Once you have a single process that all agents use, the focus is on continuously improving the process, not trying to improve each agent individually.

To do what Toyota has done, technology is not enough. A BPO must change its culture, teaching the leadership in all its centers how to continuously improve call handling across every call type on every account. This, in part, means restructuring to create a process engineering function that:

  • studies phone calls
  • continuously develops and tests hypotheses for improving those calls
  • rapidly cascades their knowledge across the entire organization

What could be won if an outsourcer developed an organizational capability like this?  To the victor go the spoils. Just compare the portfolio of Toyota’s shareholders to those of GM and Ford.

Dennis Adsit is vice president of business development for KomBea Corporation; he can be reached at dennis.adsit@kombea.com.

[From Connection Magazine November 2009]