Upstream

Dan Heath's book Upstream: The Quest to Solve Problems Before They Happen begins with a parable: A couple of guys picknicking next to a river notice a young child floating down the river about to drown. They jump in and rescue the child, but then see another child coming down the river. They rescue this child as well, but then notice a long line of additional children approaching. One of the guys gets out of the river and runs upstream. "Where are you going?" shouts his friend. "There are still kids here who need rescuing." He replies: "I'm going upstream to stop the person throwing all these kids into the river in the first place!"

As one might guess from this introduction, Heath believes solving problems upstream - at their roots - is a far more effective (and less costly) means to truly improve a situation. As he sums up the US Healthcare system, "We'll pay $40,000 a year for the price of insulin, but we won't pay $1,000 to prevent someone from ever getting diabetes." He brings many examples from business, government and one's personal life, all of which are worth exploring, but for time purposes I will mention just one.

Expedia. When this travel website first started, many customers called the service lines after already purchasing their itineraries, with each call costing the company roughly $5. This added up to a $100 million expense. To save money, the company decided to focus on how they could make these calls more efficient. Streamline intake via an automated system. Have the operators dedicate fewer minutes per call. Outsource the operators altogether. Etc. By making the calls more efficient, they estimated they would save $10 million.

But then the CEO decided to go a little upstream from the problem. What are these customers actually calling about in the first place? An analysis of the data revealed that the vast majority were simply asking the operators to re-send their itineraries, something the customer should have already received but for some reason no longer had saved (or perhaps couldn't find in their e-mails). "What if we simply put a button on the website itself?" the CEO mused, thereby offering the customer self-remedy without ever having to make a call at all. It worked, saving not the estimated $10 million windfall if the calls became more efficient, but rather the entire $100 million cost of fielding all those unneccessary calls in the first place.  

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