Performance Management and Improvement at the Automobile Association

Introduction

Focused measurement of performance of the right things is a key issue for all businesses. Yet increasingly, managers find their world is awash with data that is difficult to use as a route to improvement actions. All too often they waste time chasing routine variation in a search for meaning. Employees, particularly those managing customer relationships, are frustrated that their managers do not understand how their performance has been constrained by circumstances outside their control. Nor do employees have a consistent and open framework for sharing their huge knowledge about performance. In such circumstances it is difficult to build trust between people, departments and operating units. The AA has tackled and conquered many of these issues.

In 1997, the AA was making large investments in new computer systems, new flexible working practices and increased front line resourcing. To coincide with this they sought a top quality mechanism for managing and tracking the improvement process.

Background

In 1993 Don Wheeler published “Understanding Variation”. This book gave a good steer on how to interpret management information using Statistical Process Control (SPC). In late 1997, the Automobile Association (AA) embarked on an SPC performance strategy that embraced the organisation from patrols (over 3500 in number) to the operations board. Many of the principles highlighted in Don Wheeler’s book were deployed in this initiative. The project had a rigorous financial justification with benefits estimated to be in excess of £10m over 5 years.

The AA, now acquired by Centrica (a FTSE 100 company), is a large and highly successful service organisation operating throughout the UK. Patrols are car mechanics with good customer skills, qualities that are paramount in “roadside” automobile breakdowns. Calling the Association can often be at a time of high stress, particularly if the breakdown is associated with a road traffic accident.

Encouraged by the consultants working on this scheme, the AA was “heretical” with some of the standard SPC terms. Past experience had shown that much of the language surrounding SPC seems to be a “barrier to entry” for many people. For example the XmR chart was the key analysis tool used but some people find this type of name scary, so the chart was renamed the iChart^[1]. This terminology found rapid acceptance. The use of iCharts in a balanced set of measures provides a simple yet powerful solution to the problems associated with the “snowstorm of data” found in many businesses.

The AA has introduced iCharts throughout the operations side of the business. This system involves a synchronised set of measurements from Operational Executive Board (OEB) to iCharts associated with service delivery at individual patrol level. In the latter case the charts are used to identify special causes which are discussed directly between manager and patrol. The application of iCharts at OEB level, coupled with cascading them out to service delivery, represents an opportunity to separate events requiring special attention (Signals) from the normal everyday fluctuations (Noise). Detecting and separating “Signals from Noise®” permits the more efficient, effective and economic use of resources. Signals and Noise may both need attention but the timescales and responsibility for action are different. Overall, iCharts focus attention on fruitful areas for improvement. At the AA the project is named “Signals from Noise®”

Special emphasis was placed on employee buy-in at all levels, as well as training and rollout. Throughout the project the vital link between measurement and culture was observed. iCharting and paretos gave very visual and clear outputs. The iCharts were strong at detecting “out of the ordinary results” and longer term “performance shifts” (both good and bad). Used in the right way they create a dialogue that helps identify potential process improvements. The intelligent performance discussions associated with this form of management have proved to be highly motivational as improvement actions resulted and the input from the parties concerned was acknowledged.

It is recommended that measures are rolled-out from the boardroom to the point of service delivery. In clear cascaded systems everybody becomes aware of the contribution they are making to the organisation’s aims. iCharts are statistically based but very easy to use and apply. It is a form of performance measurement and management that anyone and everyone can become good at. Mathematics often gives people a headache – and even the mere mention of statistics can induce a migraine. Fortunately, the first maths underpinning iCharting takes only minutes to teach in iCharting seminars, thus creating a “headache free zone”!

iCharts are used as part of a strategic armoury. On one A4 page, previous history, future aims and how they are going to be achieved can all be shown. iCharts help companies to detect and respond effectively to any emerging difficulties – “the bells ring at the right time”. Also variability in performance is clearly identified. Often performance management restricts itself solely to recording averages. It seems to go unnoticed that the average of two customer calls of 5 minutes’ duration gives exactly the same average as one call of 1 minute and another of 9. However understanding this type of variability can be a vital ingredient in a company’s customer relationship management.

The iChart

For each measure, an iChart is constructed that tracks performance over time (see figure 1). An Average is computed, along with two additional lines either side of the Average, known as Calculated Performance Guidelines. They reflect the amount of variation inherent in the business process. They are not targets, and are not imposed by management^[2].

The upper and lower calculated Performance Guidelines give the data context and are used to detect single point signals and runs of results indicating a performance shift (see figures 2 & 3).

The Project

After seeing how the iCharts worked with AA data from the Woking and Basingstoke teams it was decided that a pilot should be undertaken. The data analysed for patrols in the Woking and Basingstoke areas was the “call to complete time”. This is a measure of the time between the member calling the AA and the completion of the job by the patrol. The calculated performance guidelines were exceeded at a rate of 18 per 1000. This was equivalent to 24 per patrol per year, which is 84,000 per year for the whole of the AA Membership. This is more than enough for any organisation to use as its basis for improvement action.

An interesting feature of the AA performance is that significant numbers of long jobs are not failures. In fact it is quite often the reverse with respect to delivering customer satisfaction. For example, if the patrol was unable to fix a member’s car the Relay service would be ordered (if the member had this level of cover). In general, the patrol would leave the Member for the time between the Relay service being ordered and its arrival. However, judgements are made in this situation. For example, if a woman was involved late at night in a badly lit remote location the patrol would stay to see that everything was OK. As we will see later the “Signals from Noise®” process highlights these events and helps the Manager identify the regular occasions where praise is due.
 
For the pilot:

• A project executive and project manager were appointed. 
• A high performing team was selected.
  (A team has a Field Service Manager who has, on average, 25 patrols in his team.)  

As a first step, data was obtained for the team and the resulting iCharts were discussed with the Field Service Manager. The Field Service Manager absorbed the method very quickly.

The iCharts used were in colour and A4 in size. It is hoped that some of the essential detail can be seen in the scaled down version (see figure 4).

 This iChart shows the “Arrive to Complete” measure. This is the time taken between arriving at the scene and completing the job.

It can be seen that the patrol’s average for the first week was 24 minutes and for the second 22 minutes - a pretty good going by any standard. It was displaying the successes alongside the “failures” that was key to the success of the project. It could be clearly seen by patrol and manager that performance was generally good “job in: job out”. This, with the cultural training adopted, made it possible for manager and patrol to discuss jobs that had not gone so well, particularly when these jobs mostly involved some process issue and not a mistake by the patrol. As a result “gold nugget” information could be fed into the whole business improvement process.

At this stage the calculated performance guideline was based on team performance and set, for all patrols in the team, at 50 minutes. It can be seen that this guideline was exceeded on 6 occasions. To aid the discussion with respect to these “signals” some further detail was provided (see figure 5).

2001 Wood, Williams, Anker & Gardener

Figure 5 

The Field Service Manager undertakes a monthly review and the above events are discussed. The essence of the discussion is to establish whether the time for the job was satisfactory. If not what can be done to achieve improvement. This might entail:

• Local problem resolution with respect to the spare parts carried etc.
• Training needs identified
• Escalation to a higher level where investment cases are formulated to see whether a satisfactory payback can be achieved.

The trial proved to be a tremendous success and fifteen more teams were added to the trial. The success continued and after a rigorous financial approval process it was decided to roll out “Signals from Noise” to the whole patrol force.

The Field Service Manager/ Patrol Reviews were incorporated into a newly formed “Signals from Noise Improvement Process” (see figure 6).

The iCharts are originally formed using an IT process that capitalises on information fed into the mobile data terminal contained in the patrols’ vehicles. The iCharts and extra detail is then transmitted to the Field Service Managers’ lap top computers.

The Field Service Manager holds a review with the patrol and “gold nugget” improvement information is discussed. The results of the discussions are coded and transmitted back to headquarters. For those issues that cannot be resolved locally further analysis takes place. National and regional patterns are studied and extensive use of Pareto techniques is made. If the benefits seem sufficient for particular problem resolution a formal investment case is prepared. The improvement cases fall into three types:

• T.I.P. (Technical Improvement Process). This includes spares, tools and training, etc.
• S.I.P. (Supplier Improvement Process). This includes talks with suppliers such as Partco who supply automotive spare parts to AA patrols.
• D.I.P. (Deployment Improvement Process). This is measured by the time it takes a patrol to get to the member in a breakdown situation (speed of response). The improvement process would include items such as map references and gazetteer information.

Once a change is planned there is a feedback process that keeps the patrols informed of developments. This is an absolutely vital part of the motivational aspect of the method. A way of showing that the input made at the review session is being acted upon.

While the iCharts are working at the point of service delivery the Operations Executive Board (OEB) is monitoring overall performance in the same way. Once a month the OEB meets and is led by the charismatic Operations Director, Alistair Cheyne. The OEB reviews a balanced set of measures. At the front of the report is a “Dashboard” representation of the measures.

The “dashboard” serves as a one-page performance overview of all OEB level indicators, as well as an index. It also serves as a pointer to where further investigation is required to understand any signals or performance shifts that have occurred in the review period.
 
The dashboard is made up of a series of dials with the latest performance result signified by an arrow. The grey shaded portion represents the area between the upper and lower calculated performance guidelines. In the hypothetical dial (see figure 7) the calculated performance guidelines are 131 and 137, and the result for the November period under review was 134.

The associated iChart is at figure 8.

The iCharts at the AA covered the following on one A4 page.

• Performance history.
• Current performance and a way of distinguishing whether a result or a series of results bore any special meaning.
• Improvement projects.
• The future plan.

This proved to be a great communication medium and a way of making the meetings much more focused.

The two key analysis tools on this project are the iChart and the Pareto chart. As mentioned before a heretical act was performed in getting the name iChart in usage. For the purists the “i” stands for individual values (i.e. “one at a time” data such as monthly finance figures). However the “i” nicely fits with other relevant “i” starting words such as:

• Intelligent interpretation of data.
• Integrated performance improvement through cascaded iCharts.
• Insights.
• And I = eye for visibility.

Conclusion

• From Fixing Cars to Fixing AA Members’ Needs

The business impact of adopting this performance review system and linking it to the front line staff (patrols) adds value to the AA’s Road Services in a multitude of ways.

The Automobile Association has a complete business performance management system, which links the service delivered to its members with performance management decisions made at the Operations Executive Board. Dramatic improvements have been achieved in key indicators. The approach goes hand-in-hand with a service ethos that is based on delivering tailored solutions to each AA Member’s particular need when they need help; resolving the consequences of the breakdown as well as fixing the car.

• Speed of Response – A Five-Year Best

In addition to radical improvement in time to arrive at the breakdown location (average 35 minutes), Call Answering (i.e. calls responded to in 15 seconds) is the best for 5 years. Another Key Performance Indicator showing dramatic improvement is the frequency of Call to Arrive times in excess of 60 minutes. The reduction in 60-minute delays is particularly significant in performance improvement terms as it is closely linked to reducing member dissatisfaction.

• Members’ Needs – Improvement Despite Tougher Expectations

A large and positive improvement shift has been achieved, against a background of increasing expectations set by a generally more demanding public and tough competition.

• Employees’ Needs – A Motivational Performance Management System

A more coaching and supportive style of management is achieved using iCharts. Patrols view the approach as more constructive and motivational.

Ultimately the Customer Decides

In 1999 J.D. Power and Associates undertook a UK Roadside Assistance Study which involved almost 25,000 drivers who needed roadside help. Based on responses, the AA was ranked first overall, seven index points ahead of its nearest rival.

In its summary of results, J.D. Power said: “The AA sets a new industry benchmark and provides its customers with the highest level of satisfaction of any major provider”. In 2000, the AA was again voted No.1 motoring organisation by JD Power. The AA has, in excess of 10 million members. All this is being achieved with the project yielding benefits estimated to be in excess of £10m over 5 years.

Notes

¹ The name iChart for these type of initiatives is credited to Alan Meekings, Chief Executive of The TrainLine.com

² For details on how Performance Guidelines are calculated and an introduction to these type of charts, see Wheeler, D.J. (1993), “Understanding Variation", SPC Press.

About the Authors

Brian Wood MBA is a director of Optimisation Ltd., a company that helps organisations develop and implement performance optimisation techniques. Brian's key experience includes performance improvement management, change management and project management. He spoke at The Economist Conference: Implementing Performance Measurement: Liberating the Potential of People and Organisations and at Qualitex 2000:Managing Data for Maximum Benefit. Brian can be contacted at 01737-370061 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

Richard Williams FIPD is responsible for strategic planning and development for the AA’s Road Services business. From an HR background, Richard has been responsible for shaping the customer service strategy that has contributed to the AA being recognised as the UK’s leading motoring organisation. Following a period at the sharp end that included running call centres and road services operations, Richard is now responsible for a strategic change programme that will deliver further competitive advantage

David Anker PhD is a founding member and director of signalsfromnoise.com Ltd., a company that specialises in a portfolio of performance improvement techniques known as signalsfromnoise, incorporating the use of iCharts. David has over 20 years’ experience in leading business performance improvement projects. His recent speaking engagements include the Henley Management College, St. Gallen Business School and the Asset Management for Railway Infrastructure Conference. David Anker can be contacted at 01491-638500 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .