Document Name: Chapter 3 -- Putting Customers First
Date: 09/07/95
Owner: National Performance Review

Chapter 3

Putting Customers First

Who'd have guessed the Social Security folks give better customer

service on the phone than Corporate America's role models?

Business Week, May 29, 1995

William Festag will stand behind Business Week's assessment of Social Security's new phone service. When his wife died in December 1994, Festag had a lot of calls to make. One of them was to Robert Allen at the Social Security Administration. "Mr. Allen sensed my emotional and mental state at the time of the call and somehow managed to strike the proper balance between being businesslike and sympathetic," Festag wrote later. "His professionalism and skill in performing that job is not only a credit to his ability, but reflects the high standards that your agency must be maintaining."

An isolated example of an exceptional employee in a lumbering bureaucracy? Not according to a major national survey. When researchers from Dalbar Financial Services, North America's biggest financial news publisher, went looking for the best 800-number customer service in their "World-Class Benchmarks" survey this year, they didn't find it at folksy L.L. Bean. They didn't find it at Disney World. Or at Nordstrom, the retail chain so famous for customer service that stores take returns of things they don't even sell. They didn't find it at "When you absolutely, positively have to get it there overnight" Federal Express.

They found it at the Social Security Administration.1 Dalbar rated the organizations it surveyed for attitude, helpfulness, knowledge, the time it took to answer the phone, and the time it took to reach a personal representative. While SSA lagged considerably behind other organizations in the amount of time callers were on hold, once the agency staff came on the line, they were tops in the nation for being "courteous, knowledgeable, and efficient."2 The result? Some of these companies are now studying SSA for ideas. Meanwhile, the agency is training 3,300 more people on its own staff to cut that "on-hold" problem.

At a time when government agencies are trying to be as good as private businesses, the way SSA handles its telephone customers isn't as good--it's better. A federal government agency is setting the standard.

This is no fluke. Last year, President Clinton told the federal government to ask its customers what they wanted, listen and respond, and keep checking back with them. And that's exactly what SSA did. It also asked its front-line workers who serve customers every day how they would redesign the system if they had the chance.

The agency got an earful. Folks said that after working hard and paying into Social Security all their lives, they didn't think they ought to have to work just as hard to get their benefits out when they retired. Yet when they called the agency, they said, they got the bureaucratic runaround--plus, they said, they had a hard time getting through at all.

SSA heard these complaints and responded. The agency studied the best in the business of customer telephone service--American Express, Saturn Corporation, AT&T, the GE Answer Center--and then set out to beat them.

It was a tall order. SSA maintains earnings records on almost 140 million Americans and pays out social security insurance and supplemental security income benefits totaling nearly $300 billion to nearly 45 million people every year. The agency receives 64 million calls each year on its toll-free number, sometimes peaking at 1.7 million in a single day.3 For many Americans, Social Security is the difference between a home and homelessness, between food and hunger, between reassurance and worry. A lot of people depend on Social Security. Their number will grow even more as the baby boomers age.

And SSA isn't alone. The Internal Revenue Service gets nearly 96 million calls a year. Until recently, it too had a pretty bleak record. Taxpayers complained constantly about having trouble getting answers from IRS--and even more trouble getting correct answers.

The IRS Guarantee
If you provide sufficient and accurate information to our tax assistors but are given and reasonably rely on an incorrect answer, we will cancel related penalties.

1995 Individual Tax Packages

IRS got the message. Now, for the first time, the agency has customer service standards with a simple objective: the right answer the first time. It used to be that your chances of getting the wrong answer the first time from IRS were about one in three. Today, you can count on getting the right answer the first time 91 percent of the time--and the agency is working on doing even better. In the meantime, if IRS's representatives make a mistake, you pay no penalty.4

The Service Revolution

"We've always had our telephone lines open from 8:00 a.m. to 5:00 p.m., five days a week.

Well, guess what? Everybody in this country works during those hours! It was ludicrous."

Larry Westfall, IRS Modernization Program5

Just a few decades ago, life was simpler than it is today. There were three TV networks. Four car makers. One phone company. If you wanted to see a movie, you went to a theater. Ours was a mass production economy. You could get pretty good products, though there weren't a lot to choose from. You could get pretty good service, as long as you weren't in too much of a hurry.

Those days are gone. The explosion of information in the last decade or so may have complicated our lives, but it's also given us an explosion of choices--and a lot more power as consumers. So now our expectations are higher. We want quality, value, and variety. We want things customized to our individual needs. And we want convenience and timeliness. Federal Express (now called FedEx--even its name is faster) taught us to take overnight delivery for granted. But even that's old news: with faxes, we want it now.

You can't provide this kind of service with an old-fashioned, top-down corporation. So, many large corporations "atomized" into small ones with fewer layers of management. Now, employees--like the folks who work for Southwest Airlines--work in flexible teams and do a little bit of everything. Customers--not executives and engineers--determine what products and services will be offered. Producers and suppliers work together as partners, not adversaries. Companies that may be competitors in one line of business co-operate in others.

In short, companies adapted to consumers' demands for better products and services. The federal government, on the other hand, didn't.

Until reinvention began in 1993, most federal government agencies were like the big corporations of the 1950s: vast, slow-moving, resistant to change, virtually impervious to us lesser folk. But dinosaurs like these can't meet today's needs--either in the private sector or in government.

Government had another complication: many government services are monopolies. If you need a passport, for example, where else are you going to go? With little or no competition, agencies had gotten used to taking their customers for granted--or simply assuming they already knew those customers' needs.

That's changing, and the reason is the agencies are listening now. What Americans are telling them is that when we want service from our government, we ought to get it.

Now, in many places, we can.

President Clinton's
Executive Order 12862

"Setting Customer Service Standards"

* Identify customers who are, or should be, served by the agency.

* Survey customers to determine the kind and quality of services they want and their level of satisfaction with existing services.

* Post service standards and measure results against them.

* Benchmark customer service standards against the best in business.

* Survey front-line employees on barriers to, and ideas for, matching the best in business.

* Provide customers with choices in both the sources of service and the means of delivery.

* Make information, services, and complaint systems easily accessible.

* Provide means to address customer complaints.

What Americans Say Good Service Means

The kind of service Americans want from the government is pretty basic--fast, accurate assistance; readily available help; options for where and how to get services; clear advice, letters, publications, and forms; and friendly treatment.

Last year, as mentioned above, federal agencies asked their customers what they wanted, how they defined good service. Here's what they said, and how agencies are responding.

Ask Us What We Want

When you walk into Burger King, the people at the counter don't tell you what you'll have for lunch--you get to choose. And you get to choose from much more than hamburgers--chicken, salads, and more. If you want a hamburger anyway, you get to choose what's on it. The folks at Burger King don't do anything by accident. Each new product or service they introduce is the result of careful analysis of customers' needs and interests. They survey, they test, they survey again, and then they roll out something new. And they evaluate how it does. The idea is not so much that "The customer is always right," as "If we're here to serve customers, we'd better know what they want."

In the past, it seemed as though the government rarely gave any thought to what people wanted--or, rather, it assumed that it knew. But it's often been wrong. For example, people at the Department of Veterans Affairs often assumed that vets didn't mind sitting around in waiting rooms at VA hospitals because it gave them a chance to swap war stories. But when they finally talked to their customers, they found that vets disliked waiting as much as everyone else does. So VA set out to reduce waiting times.

The Social Security Administration also got a surprise when it made assumptions about what the public would want. SSA already knew that its longstanding policy of mailing everyone's checks on the same day each month caused some problems: it swamped front-line SSA workers and the post office. It created lines at the banks. And it made elderly customers vulnerable to robbery because every petty crook in town knew they'd have their checks that day. The obvious solution, SSA decided, was to spread the mailings for different individuals throughout the month--making sure that the day of payment would be consistent as far as each customer is concerned. But when SSA made this proposal to its customers, it found that people didn't like the "obvious" solution one bit. Even though they weren't pleased with the monthly crunch, most had arranged their lives, and their cash flow, around that beginning-of-the-month Social Security check--and they didn't want their routine to change. So SSA modified its solution. Starting next year, the agency will stagger the payment date for new beneficiaries only; it won't mess with current recipients unless they volunteer to participate.

The federal government is finally getting it right. It's asking us what we want, instead of telling us what we need. It's listening to what we say, and then acting on it quickly and flexibly. It's treating taxpayers like valued customers.

Don't Tell Us "That's Not My Department"

People hate getting the runaround. And the more precious time becomes to busy people, the more they dislike getting bounced from office to office when they call or visit a federal government agency to get something done. There may be no statement in our language more frustrating and less helpful than "Sorry, that's not my department."

And yet, the way the government has been organized for years--with solid brick walls between agencies, and even between divisions inside agencies--that was often the only answer federal government employees could give. Even if they were able to breach those walls (and often they couldn't), they seldom knew much about what was on the other side.

Compare that, for example, to shopping at Nordstrom, the department store chain that prides itself on its customer service. If you buy a dress or a suit at Nordstrom and need several kinds of accessories to complete the outfit, the staff won't send you from department to department. Instead, a cross-trained employee will do the running for you, returning quickly with several choices pulled from several different departments.

Why can't the government have the same attitude? The issues that matter to people don't have nice neat walls; they're complicated and involve lots of players. Americans want these issues--big and small--solved, not frustrated by bureaucratic barriers.

Since the reinvention initiative began in 1993, those barriers have begun to fall--and the first to fall are those that matter most: the ones closest to the customer. Consider Miami International Airport on June 29, 1995--the day, according to Art Torno, managing director for American Airlines in Miami, "that things fell apart in Immigration." Incoming flights swamped the Immigration and Naturalization Service, which is responsible for checking passports and clearing passengers. As the wait approached three hours, fistfights broke out among tired, frustrated travelers in the terminal. Meanwhile, more arriving passengers waited, fuming, in their planes.

Airline and airport officials were ready to complain to Washington--but they didn't have to. The government was already listening. Dan Cadman, the local INS director, and Lynn Gordon, the local Customs Service director, working with their partners in the American Federation of Government Employees and the National Treasury Employees Union, brought together an emergency coalition of customers and officials to solve the problem locally--and fast. In two weeks of brainstorming, the airlines, airport officials, and several government agencies worked out an entirely new passenger handling system.

Two weeks after that, as the vacation travel season peaked, the new system was in place. The three-hour waits were gone. "It's the first time I've seen the airlines and the agencies cheering each other and patting each other on the back," says American's Torno.6 But now the airlines had a new problem: passengers were clearing Immigration so quickly they were reaching the baggage hall before their bags!

Clearly, if government agencies are freed to respond to customer needs, not just agency directives, they can break down the walls and get things done . . . and quickly.

Treat Us With Courtesy, Respect...and Enthusiasm

Federal employees take a lot of heat for what's wrong with government, but the plain truth is that it's the system in which they work, not the workers themselves, that's the main problem. It is so rigid, so rule-bound, so inflexible, so inherently unfriendly that they themselves are frustrated and angry. They want to help customers, to tailor services to their needs, to treat them as individuals--treat them, indeed, as what they are: not only the government's customers, but also its stockholders. But too often the system doesn't permit it. Government workers signed on to be public servants, but ended up program servants instead. And they don't like it any more than their customers do.

Now that's changing...even in the Postal Service. Around the country, customer advocacy councils are suggesting how post offices can best serve local customers. In Houston post offices, for example, officials asked some of their customers to create a sort of "shoppers' checklist" that summed up the kind of service they expected. These volunteers described not only how they wanted to be treated, but also everything from the speed of service to the way postal clerks should dress. Then the post office posted these standards, re-trained its workers, and encouraged the volunteers to act as "mystery shoppers," checking up from time to time.

The employees didn't take this as a new imposition; they saw it as finally being judged on how well they treated their customers, not how well they followed the rules. Not only did physical appearance at the post office change, attitudes changed. Employees were courteous, friendly, prompt. They began to take pride in their job and treat their customers with the respect they deserved. In short, they treated them as they would want to be treated themselves.

Not surprisingly, customer satisfaction soared. An independent company, Opinion Research Corporation, has been measuring customer satisfaction at post offices for years. In 1991, Houston's average customer satisfaction score was 79 out of 100. Today, it's 88.7

These kinds of changes are happening not just where services are retailed "over the counter," but throughout the federal government. All it takes is giving workers the freedom to do what needs to be done. "People say I don't act like I work for the federal government because I'm nice to them," says Brenda Oesterheld, an information assistant in the Washington, D.C., Customs office. "But I'm a taxpayer too. I expect the best from the government and I'm going to give the best back."8

Make It Easy

Americans have a simple question: if the government works for us and we've already paid for its services, why is it so hard to get anything out of it?

The government has an answer: increasingly, it won't be so difficult to deal with anymore. Agencies are letting people know what help is available and making it accessible through as many means as possible--in person, by phone, by fax, on the Internet. And this is happening throughout the federal government.

For example, to get medical care at a VA hospital, you have to spend an hour with an intake interviewer answering 93 questions to prove you are a veteran and needy. Questions like this: "During the last calendar year, did you have any unmarried children or stepchildren who were under the age of 18 or between the ages of 18 and 23 and attending school or any unmarried children over the age of 17 who became permanently incapable of self-support before reaching the age of 18?" Assuming you understand and answer this and the other 92 questions, the VA then double-checks all your answers with your Social Security records and triple-checks them with your IRS records.

But soon that will be history. In the coming year, there will be only three questions: How much do you make? Do you have any dependents? Would you mind if we checked your IRS records? That's it. All the VA has to do is trust its customers to give honest answers.

Another way to make things easy is to make them convenient. The Forest Service had the right idea: if you want to cut down a Christmas tree in a National Forest, you need a permit. That makes sense; we can't have people chopping down trees willy-nilly. What doesn't make sense is having to make a special trip to some distant Forest Service headquarters to get the permit, or having to do it by mail. One office's solution? Sell the permits where people rent chain saws. Now, that's convenient.

The irony here is that when the federal government responds to what Americans want--a simpler, easier government--it also makes things easier, and cheaper, for itself.

Provide Reliable, Timely Help

Americans are reasonable people. We'd like to have our questions, our applications, our permit requests, and the like answered immediately (and preferably in our favor). But in the event that an answer or a decision may take a little time, we'd like to get what we're used to getting from the best private businesses: an indication when we will get an answer, a promise that someone will follow up, and the name and phone number of someone knowledgeable and reliable who we can check with in the future.

It's the waiting that's so annoying. There is no reason--other than sheer bureaucracy--why the government can't be as responsive as the best businesses. When a good business has a defective product, it replaces it immediately and at no cost to the customer. Now the federal government has demonstrated the same kind of service.

STAT-USA, the Commerce Department's one-stop shop for business and economic information, regularly updates the National Trade Data Bank, a CD-ROM database that contains enormous quantities of data vital to exporters. The disks go to some 1,600 subscribers who, in turn, may serve hundreds of others. A few days after it mailed the July 1995 trade data update, STAT-USA started getting calls about a problem with the software. Because STAT-USA's staff knew how time-critical the information was, they didn't wait to go through a complex approval process. As soon as they determined that customers couldn't work around the problem, they immediately shipped replacement disks--despite the fact that, as a self-supported organization, STAT-USA would have to swallow the cost.

The response was dramatic. STAT-USA received scores of calls and letters from customers thanking them for their quick response. Wrote Richard Jurek, an officer at National Trust in Chicago, "STAT-USA is good government: cost-effective, efficient, responsive, and value-adding!"

We have already mentioned the Postal Service--the organization we love to complain about. For years, it seemed like hardly a day went by that there wasn't some postal horror story in the news. But hard as it may be to believe, things are improving. During the first quarter of 1995, the independent American Customer Satisfaction Index surveyed 10,000 customers about the quality of 200 communication, transportation, utility, and service companies they used. Only one showed improvement over the preceding quarter: the U.S. Postal Service. Customer satisfaction with the U.S. mail jumped 13 percent from 1994. Satisfaction with the rest--hotels, long-distance services, and airlines, among others--either declined or remained flat. Postal officials credit the rise to changes such as extended hours, a 24-hour help line in major cities, a five-minute service guarantee at many branches, and a record 85 percent on-time delivery record. Says Claes Fornell, the survey's economist, "You don't see many companies improve an image that quickly."4

The Results: A Government That Serves

"Tell your CEO that the federal government may be outclassing your company

... For once the federal government is ahead of the private sector."

Lawrence Magid, Information Week magazine10

Last year, in response to President Clinton's directive, agencies established standards for the service they provide to their customers. The standards address a wide range of customers: the general public, businesses, law enforcement officials, travelers, tourists, outdoor enthusiasts, veterans, state and local governments, natural resource users, and federal employees themselves, among others.

Then the government did something even most businesses don't do. More than 150 agencies published the standards and distributed them to the public.
They consist of simple, straightforward statements that spell out, in plain English, exactly what Americans can expect from their government. Since then, 50 more agencies have added their own standards. (For a comprehensive list of these standards, see the report Putting Customers First 1995: Standards for Serving the American People.5)

Finally, this year, the government set about the task of surveying its customers as the first step in measuring how well the agencies were actually living up to those service standards. This is the way the best businesses are run, but in government it was virtually unheard-of.

Just as America's corporations realized they had to change their corporate cultures in order to compete in a globalized economy where the consumer was the boss, rather than a domestic economy where the producer was the boss, so too must the government shift from a restrictive culture to a responsive culture. It doesn't happen overnight, and it certainly doesn't happen just because you've published some service standards. Still, there is steady progress on every front.

Progress Report: Asking and Listening

It seems simple, asking the customer--but it's not. For one thing, sometimes customers don't know what to ask for. They know what they need, but they don't know the solution or where to find it. For another, not all federal government programs know who their customers are, how to reach them, or what to ask them.

For example, for years the Department of Housing and Urban Development has seen local public housing authorities as its principal customers. That approach has frequently failed to deliver decent housing for low-income people. Now, HUD proposes to make residents their customers, and to provide these people with vouchers for government payments so they can make their own choices about where to live. "Who are we to say...people ought to have to live in those God-awful conditions?" says HUD Secretary Henry Cisneros. "We're putting power with the people to make those choices."12

Often, however, the government's customers are easy to identify. They let the government know who they are and what they need. The difference today is that the government is listening.

State and local government officials complained that the process of applying for federal government grants was so time-consuming and costly that it diminished, rather than enhanced, their ability to meet the needs of their jurisdictions. In response, agencies throughout the federal government are consolidating grantmaking programs. For example--with support from Alice Rivlin, Director of the Office of Management and Budget--the Department of Health and Human Services is consolidating 107 health service grants into six performance partnerships and 11 consolidated grants, and giving its state and local government partners more flexibility in the bargain. Part of the motivation is overall governmentwide streamlining, of course, but it is driven by a new awareness of and responsiveness to customers. "The reinventing government effort has been a special opportunity to bring about changes that make sense, and to try new approaches," says HHS Secretary Donna Shalala.

Businesses complained that while they knew there was government help available for small businesses, there was no easy way to get access to it. Time is money, they said, and it's just too time-consuming to figure out what help is available, where to get it, and how to use it. What was needed was a way not just of making more information accessible in user-friendly ways, but of eliminating the artificial (and, for customers at least, irrelevant) distinctions about which agency produced what information.

The result is the U.S. General Store, opened as a test project in Houston on July 6, 1995. Prompted by the reinvention movement to do whatever best served their customers, some 14 federal agencies created a one-stop business assistance center. You go to (or call) one place, and you deal with one person cross-trained in the information, services, and regulations of all the participating agencies. That person can provide loan information, assist with tax problems, help you comply with regulations (a request that came up often in discussions with businesspeople), explain federal contract bidding procedures, and more. The store plans to have all the agencies' databases merged and accessible in one place. Parking is free. It's open some evenings and weekends. Better yet, it required no new funding; it was simply a matter of making what was already available easier to use. "Our goal is 100 percent customer satisfaction, and we ask each customer if they are satisfied with service they received. We hear great things from customers everyday," says store manager Sandra Ellison.

"Starting a business is like walking into a forest of redwoods," says Houston business owner Alan Bergeron. "You don't know what direction to go....It's great to be able to be able to knock on one door and get a whole library of answers." Next step?--if customers approve, the General Store will become a national chain. Call it "Gov-Mart."

Listening also can be lifesaving. The Consumer Product Safety Commission's job is to protect Americans from dangerous products, provide information on product recalls, and gather reports on product-related injuries. To help its customers, the commission has reinvented its consumer hotline. The line is open 24 hours a day, seven days a week. Information is available in English or Spanish and, during regular business hours, in other languages as well. In the first year after the upgrade, the commission received more than a quarter-million calls--nearly 80 percent more calls than before--and double the number of product complaints. And the cost per call dropped sharply.

Asking and listening is making a difference to customers--often desperate ones--of the Federal Emergency Management Agency. A survey of 1.2 million disaster assistance applicants revealed that agency representatives' compassion and willingness to listen was the most important aspect of FEMA's services for 38 percent of those surveyed.13 That's more than twice as important as the things FEMA assumed were the most important, like the amount of assistance dollars received, the fairness of home inspections, or the length of time to apply for and receive financial assistance. So FEMA is working to balance staff members' financial skills with people skills.

And here's perhaps the most interesting thing about asking and listening to the customer: for the first time in years, public servants are doing what they have always wanted to do--serve the public. Unchained from the system, encouraged and rewarded for service by President Clinton, they have become wellsprings of ideas for making government work better and cost less.

Progress Report:

Establishing Customer Service Standards

So far, 98 percent of all federal agencies have talked with their customers--something they were discouraged from doing until President Clinton made it possible--and all have developed standards in response to what their customers said. In many cases, these service standards don't look like anything you've ever seen before from the government:14

* They're specific, not vague ("Lobby service in 5 minutes").

* They're personalized and aim to meet customers' expectations ("We will respond to your application within one business day").

* They make firm commitments ("You'll only have to make one stop").

* If an across-the-board commitment is impossible, they pledge to make that commitment when you contact the agency ("We will tell you if we can't give you an answer right away and tell you who will respond to your request and when").

* If customer expectations can't currently be met, they say how or when they will be ("We now process fingerprints in 21 days; by 1997 we will process them within two days of time of receipt").

* And they provide specific avenues for complaints ("If you have a problem that has not been resolved through normal processes, you may contact our Problem Resolution Office").

It isn't surprising that Americans are responding favorably to standards like these. Here's just one fan letter, from one taxpayer in San Francisco: "The Pension Benefit Guaranty Corporation has succeeded in a superior mission...few companies can establish and pledge service standards for customers."15

Progress Report: Benchmarking the Best in Business

President Clinton directed federal agencies to examine and learn from "the highest quality of service delivered to customers by private organizations." This process is called "benchmarking." That's the name industry uses for the process of continuously learning--"stealing shamelessly"--from the best, not just in your own industry, but in any industry that has functions like yours.

Highlights from Customer Service Standards

Social Security Administration

* 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 information we need. If you have an urgent need for the Social Security number, we will tell you the number within one work day.

* When you make an appointment, we'll serve you within 10 minutes of the scheduled time.

* We'll provide you with our best estimate of the time we need to complete your request, and we'll fully explain any delays.

Department of Agriculture food stamp program

* We promise to let you know if you're eligible for food stamps as soon as possible, but no later than 30 days after you file your application. You'll need to fill out your application as soon as possible, but you can start counting the days as soon as you contact the food stamp office and give us your name, address, and signature.

* If you qualify for immediate assistance, we promise to give you your food stamp benefits within five work days.

* We promise to let you know at least one month before your food stamp benefits are due to stop. If you apply to continue your food stamps by the 15th of your last monthand you still qualify we'll make sure your benefits are not interrupted.

Consumer Product Safety Commission

* Call the CPSC Hotline at 1-800-638-2772 to report an unsafe product, report a product-related injury, receive information on product recalls and repairs/replacements, and learn what to look for in purchases. Customer service standards are:

* Answer your call 7 days a week/24 hours a day.

* Provide easy-to-follow instructions in English or Spanish, or in another language during working hours.

Social Security, determined to make dramatic improvements to its "800" telephone service, helped lead a multi-agency study--the first of its kind--to examine the phone service methods of such industry leaders as American Express, AT&T Universal Card, Citibank, Bell Canada, Duke Power Company, the GE Answer Center, the Saturn Corporation, and USAA Insurance.

Sometimes the best in business isn't business at all. This year, Business Travel News, the newspaper of the business travel industry, looked for the best business travel management operations in the country--the "Master Tacticians," in their words--and chose four. The winners were Hewlett-Packard, Bankers Trust, Texas Instruments and...the National Security Agency.16

NSA, a National Performance Review "Reinvention Laboratory," had found that its travel operation took 79 days to process the paperwork for the average business trip and cost more than $8 million a year to administer. To find a better way, agency staff visited the travel offices of Allied Signal, Apple Computer, The Aerospace Corporation, Conrail, IBM, Sun Microsystems, Texas Instruments, US West, and the World Bank. Then they sat down to design a better system than any of them.

Thanks to the benchmarking process, NSA is bringing the time required to administer the process down 93 percent, travelers' form-filing time down 74 percent, and total processing costs down 75 percent. Now, you may think $8 million isn't a lot of money to the federal government, but when hundreds of subdivisions of the federal government get the "best in the business" religion, those $8 million pots really add up.

Progress Report: Using Technology to Serve Customers Better

These days, being as good or better than the best in business--best both in quality and cost--often means making the best use of available technology. And driven by the twin incentives of reinvention and the need to economize, people have brought a lot of technology, especially information technology, to the service of the federal government's customers.

This year, for example, IRS made all of its forms and publications available to taxpayers electronically, through the Internet or simply by modem from one computer to another. What's more, the quality of IRS's presentation earned it ranking by PC Computing Magazine as one of the top 101 Internet sites.17 In its first month, IRS's offerings increased the traffic on FedWorld, a government Internet information source, by 400 percent, making it the most popular service in the system--and it wasn't even April!

In addition, IRS now makes it possible for taxpayers to file electronically and for employers to submit employee tax and wage reports at one time, to one place, electronically. And employers can now deposit federal payroll taxes automatically, instead of making special trips to their bank. More than 25,000 employers signed up for this service in the first half of 1995 alone. Finally, next spring, some 5 million 1040EZ form users will have the option to file their taxes simply by using their touch-tone phone.18 IRS estimates that 3 million will do so.

SSA has also won awards for its Internet information services and, at the same time, is testing public electronic information access kiosks, or booths, so people without computers and Internet access can still get SSA information and assistance quickly.

And in the nation's crowded airports, the Immigration folks are trying to one-up themselves. Not only do they not want you to stand in line a long time, they don't want you to stand in line at all: they've created INSPASS, a sort of "automatic teller machine" for frequent international travelers. You insert an ID card, slip your hand in a slot, are recognized by the system, and you're cleared in about 30 seconds. It's also a bargain for taxpayers. Each $35,000 inspection machine, operating 24 hours a day, seven days a week, replaces 4.2 inspectors and saves $1 million in five years. If the tests now underway at Newark and JFK airports in metropolitan New York and at the Immigration facility in Toronto are successful, the program will soon be expanded nationwide.19

Finally, sometimes you can improve service dramatically simply by using existing technology more efficiently. On August 30, 1995, Trans World Airlines held a ceremony in St. Louis to honor the Federal Aviation Administration's Service Improvement Team for helping restore the financially troubled carrier to profitability. By rethinking aircraft climb and descent profiles and simplifying the arrival system, the team enabled planes to land quicker than before, speeding turn-around and increasing profitability.

Progress Report: Measuring and Rewarding Service

To continuously serve customers well, you have to keep asking them what they want, assessing whether they're satisfied with what they're getting, and revising your standards and services accordingly. Businesses do this to keep from losing their customers to competitors. Government, which seldom has competitors, needs to do it too, however--because it's right. Because it owes it to its stockholders.

So on March 22, 1995, President Clinton issued a new directive not only reinforcing the requirement that agencies develop and publish customer standards, but also directing them to survey customers and their own front-line employees about how to improve service, measure customer satisfaction, integrate their customer service activities with all other performance initiatives, and identify activities that cross agency lines in order to better coordinate and deliver service. In addition, the agencies were asked to go where the need was greatest: the areas with the most customers and transactions, those that customers and employees had already suggested mattered most, and those that had suffered the most service problems.

But measurement can be tricky. For years, for example, the U.S. Postal Service has measured its efficiency, which is a good idea. And the measurements said it was efficient, which is also good. Problem is, a lot of customers didn't agree. It turns out it was measuring the wrong thing. What it was measuring was the time between when a letter is postmarked in one post office branch and delivered to another. Very useful for the agency, perhaps, but completely irrelevant to its customers, who care about what really matters: the time between when they put a letter in a mailbox and when the little devil actually is delivered. We don't care about the internal workings of the post office; we care about whether the letter we mailed gets where it's going.

The moral of the story: measure what matters to your customers. Now, the Postal Service does just that. And that's one reason why its customer satisfaction ratings are starting to rise.20

Americans don't care what goes into the process (unless it costs too much); that's the government's business. They care about what comes out the other end. They care about outcomes. But government agencies are used to measuring inputs: the amount of money spent on some task or the number of people assigned, not whether customers are satisfied with the result.

But that's changing quickly. IRS, for example, measures outcomes that matter: for example, how long it takes to get your refund in the mail. A little over a year ago, IRS promised taxpayers that if we filed by mail, the agency would send our refund out in 40 days; if we filed electronically, it would respond in 21 days. Results? Ninety-eight percent of all refunds in 1995 went out on time, as promised.

Some agencies are even asking their customers to measure them. SSA uses "How Are We Doing?" comment cards in its field offices and teleservice center to get customer feedback on overall service, length of wait, courtesy, and whether they received the service they desired. Similarly, the National Park Service and U.S. Fish and Wildlife Service have begun a pilot project to use customer evaluation cards to collect customer comments in two national wildlife refuges.

The Office of Thrift Supervision has asked its customers--the savings and loan institutions it regulates--to evaluate OTS's examiners and exam procedures. More than 300 thrift institutions have responded, and the agency has responded in turn, reforming its own procedures. "It's a great idea," says Robert Morrison, President of Suburban Federal Savings in Landover Hills, Maryland.21

And the Department of Veterans Affairs has established a National Customer Feedback Center to provide customer satisfaction information to VA hospitals. Focus groups of patients and their families identify what they define as priorities for high-quality service and the employee characteristics that would embody those priorities. Their work is turned into standards, and then into questionnaires. The results are analyzed and sent to hospital administrators who, in turn, make service changes accordingly.

Finally, if all this measuring is to amount to anything, agencies have to reward individuals and programs that are truly superior. That too is underway. Nationally, more than 180 groups of federal employees who have developed pioneering reinvention innovations have been given Vice Presidential "Hammer Awards"--named, with intentional irony, after the legendary $600 Pentagon hammer purchase.

In addition, individual agencies are coming up with their own awards for creative problem-solving--like the "Giraffe Award" at INS's Albuquerque office, given to employees who "stick out their necks" and take risks, and the VA's "Scissors Award," for employees who cut red tape and improve efficiency.

There are some monetary awards as well. Increasingly, agencies--like the Consumer Product Safety Commission--make small, symbolic on-the-spot cash awards for exceptional customer service. The Tennessee Valley Authority, which operates in a more commercial manner than traditional government agencies, provides "gain-sharing" bonuses based on customer satisfaction results.

The Road Ahead

The odd thing about finally focusing on serving customers is that it radically changes how Americans feel about and respond to their government. Frustrated, disillusioned, expecting the worst, we approach the government with trepidation and, increasingly in the last two years, come away delighted.

For example, on July 1, 1995--Saturday evening on a holiday weekend--Leah Lenox, a 16-year-old member of the U.S. National Tennis Team, was on her way to a competition in Europe. Then her purse, with her passport inside, was stolen at John F. Kennedy Airport in New York. After airport officials told her father that there was no way Leah would be permitted to leave the country, he called the State Department in Washington, D.C. He reached David Gooding, who abandoned his own weekend plans and spent the next several hours working with Leah's airline to permit her to depart while the passport issue was being resolved. She was on a flight the same night.

This winter, Tom Pajkos, claims representative in Chicago's Social Security Office, offered to pick up a Social Security application from an elderly woman at her home.22 When he got there, he found her swathed in layers of clothes in a frigid apartment, huddled next to a small space heater. She had no water, no gas, no heat. After failing to get help from her family, he arranged for the local emergency housing department to reconnect her utilities.

Government agencies are made up of people, and people routinely go out of their way to help others in need. It's one of the things that makes us human. Nobody expected David Gooding to set aside his weekend plans, or Tom Pajkos to take an interest in a poor, elderly woman on a cold night. They just did. Just as people always have. Is it possible for a government to encourage such exceptional service? Is it possible to turn the federal government around so that Americans can come to expect exceptional service? Not only is it possible, but it's happening. People are actually writing their government thank-you letters--thousands of them:

People may rant and rave about bureaucrats, but I think

[the Customs Service] is absolutely first rate.

Col. Arnold J. Celick (USAF Ret.)23
Foresthill, California

I want to congratulate you for another significant improvement in [the VA's] service to its policyholders. By comparison to all others, the VA insurance program is a true winner--not only because it returns significant value to its policyholders but because it truly gives excellent and accurate service.

John R. Graham24
Bellevue, Washington

[The employees of the National Climatic Data Center] literally changed my thinking about federal employees. . . . I must confess complete (but pleasant) astonishment at the competence and efficiency exhibited by your department.

Michael Seidel25
Asheville, North Carolina

I want to take this time to thank and applaud one of your employees [at the Federal Student Aid Information Center]. . . . Never before have I had such quality help and attitude from a government office. She was patient, knowledgeable, and clear about the steps.

Judi Glenn26
Cincinnati, Ohio

If talking to customers is the beginning, it's also the middle and the end. Agencies ask, respond, and survey to see if the response meets the need and whether new needs have arisen. Then they respond again, measure again, and so forth.

In the last year, this continuing process has brought about improvements to services that were already doing well. As mentioned above, the Consumer Product Safety Commission's popular consumer hotline has been upgraded to meet increased customer demands. The Labor Department's Wage and Hour Division has measured the customers' satisfaction with its new standards and found remarkable approval--in the 65 to 90 percent range.27 Now it's working on the lower end.

Measuring what matters is crucial. The agencies are using focus groups, surveys, workshops, questionnaires, comment cards, and more to gauge customers' needs--and their customers, far from being annoyed, are responding loudly, clearly, and helpfully. And agencies are continuing to seek out businesses against whose services they can benchmark--and exceed. They're "stealing shamelessly" from the best in the private sector. They're examining complaint systems to ensure that complaints can be made by unsatisfied customers, and that the complaints will be acted upon.

The goal is to exceed customers' needs, wants, and expectations for service and, in so doing, rekindle their faith in their government. To achieve that goal with sharply limited funds, agencies--like private companies--are employing the latest technologies: online access, electronic retrieval, phone systems, access through the Internet, electronic benefits transfer, and more. As private industry already has discovered, it's the only way to keep up with change and with customer demands.

Imagine this: a recent retiree goes to a government services kiosk at his local post office to get information on his retirement benefits. After providing his Social Security number and other personal identification information, he gets a printout that summarizes his Social Security contributions as well as the benefits to which he's entitled as a veteran. His annuity distribution options appear on the printout, along with the rules governing how much additional income he can earn while collecting benefits. The kiosk also asks whether he'd like other information on retirement and on senior citizens groups.

Is this fiction? Nope: it's a pilot project called WINGS (for Web Interactive Network of Government Systems), already being tested by the Postal Service. And it's just the beginning. The plan is for WINGS to provide citizens access to a wide array of government services, from Social Security to reservations for camping space at a national park.

Turning the federal government into a world-class customer service organization won't happen overnight, but it is happening. It is both a technological challenge and a human challenge. It involves changing the culture of large organizations. The good news is that the front-line employees of those organizations, the ones who serve us every day, are enthusiastic participants.

The people's government is listening and responding at last. It will never be the same again.


1. "Social Security Administration Tops in Customer Service," Dalbar Financial Services, Inc., Boston, Massachusetts, press release, May 3, 1995.

2. "Stop Bashing Social Security; Its Customer Service is Tops," Mutual Fund Market News, May 3, 1995, p. 14.

3. National Performance Review (NPR), Serving the American Public: Best Practices in Telephone Service, Federal Consortium Benchmark Study Report (Washington, D.C.: U.S. Government Printing Office [GPO], February 1995), p. 2.

4. Internal Revenue Service, Customer Service Plan, Pub. No. 959,

August 1994.

5. Teleconference between Jody Patterson, IRS Public Affairs, and Candy Kane, NPR, August 25, 1995.

6. Ted Reed, "Airport aims to cut wait at Customs," Miami Herald, August 1, 1995.

7. Teleconference between Olga Rodriguez, Houston Regional Office, U.S. Postal Service, and Valarie Kaplo, NPR, August 25, 1995.

8. Lisa Daniel, "Heavy Duty Answers," Federal Times Supplement, May 8, 1995.

9. "Post Office Licks Image Problem," USA Today, May 24, 1995.

10. Lawrence Magid, "The Unlikely Trailblazer," Information Week, October 31, 1995.

11. NPR, Putting Customers First Ô95: Standards for Serving the American People (Washington, D.C.: GPO, due for publication in 1995).

12. Henry Cisneros, Secretary of Housing and Urban Development, White House briefing, Washington, D.C., December 19, 1994.

13. The survey was a statistically valid sample of 5,000 of the 1.2 million disaster victims. See Federal Emergency Management Agency, Customer Service Survey, Final Report (Washington, D.C.: Human Technology, Inc., October 1994).

14. See NPR, Putting Customers First: Standards for Serving the American People (Washington, D.C.: GPO, 1994).

15. Letter from Walter Kordas to Insurance Operations Department, PBGC, November 3, 1994.

16. Judi Bredemeir, "Best Practitioners: 4 Who Raised the Bar," Business Travel News, June 19, 1995, pp. 26-30.

17. Liesl LaGrange and Neil Randall, "101 Best Net Bets," PC Computing Magazine, May 1995, p. 171.

18. Report of the Internal Revenue Service, U.S. Department of the Treasury, to NPR, August 1995.

19. Memo from Steve McPeak and Bob Diegelman, Department of Justice, to NPR, August 1995.

20. "Post Office Licks Image Problem," USA Today.

21. Joseph B. Cahill, "OTS Asking Thrifts: How Are We Doing?," American Banker, May 9, 1995.

22. Bob Miller, Executive Officer, Chicago Regional Office, Social Security Administration, "Public Service Anecdotes," undated. (This is an internal compilation of human interest stories for the Commissioner of Social Security. For more information, call Miller, (312) 353-1734.)

23. Letter from Colonel Arnold J. Celick, USAF Ret., to Director, Auburn Teleservice, March 4, 1995.

24. Letter from John Graham, Bellevue, Wisconsin, to Chief, Policyholder Services Division, January 14, 1995.

25. Letter from Michael Seidel, Seidel Claims Service, Glen Falls, New York, to National Climatic Data Center, Asheville, North Carolina, March 24, 1995.

26. Letter from Judi Glenn, Cincinnati, Ohio, to Federal Student Aid Information Center, February 1, 1995.

27. Report of the Wage and Hour Division, U.S. Department of Labor, to NPR, August 7, 1995.

NPR Home Page Search the NPR Site NPR Initiatives Site Index Calendar Comments Awards Links Tools Frequently Asked Questions Speeches News Releases Library Navigation Bar For NPR site