Stakeholder Magazine - May

Creating value for customers, employees and shareholders

COMPANIES IN THIS ISSUE Affinity Sutton Cougar Automation Direct Line Johnsons Apparelmaster RBS International Royal Yachting Association British Gas

COUGAR AUTOMATION Enlightened management gets results

May 2010 £4.50

CONFERENCES LATEST THINKING BOOK REVIEW IVR EMPLOYEE MOTIVATION

Half day Briefing

Complaints Understanding dissatisfied customers £155

(excluding VAT)

Tuesday 5th October 2010 9:30am - 12:30pm Central London: Gloucester Road Tube Station

Coffee and Registration Part 1: Who to survey - choices and practicalities · The differences between Complainants and Defectors.

Part 2: Measure Complaints · Measure your customers’ satisfaction and understand the drivers of satisfaction with your complaints process. · Identify the consequences of the silent majority who do not bring a complaint to your attention.

Part 3: Defection who and why do customers defect · Measure satisfaction with the defection process and understand the legacy of defectors and their likelihood to return.

Part 4: Drive improvements · Improve the complaints process. · Encourage complaints. · Improve the defection process. · Customer attitude profiling.

For more information or to book your place visit:

www.leadershipfactor.com/training For a detailed agenda please contact Sandra on 01484 467000 or email sandrabeever@leadershipfactor.com The Leadership Factor Taylor Hill Mill Huddersfield HD4 6JA

Tel: 01484 517575 Fax: 01484 517676

Web site: www.leadershipfactor.com

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News

A more customer focused British Gas? Promiscuous customers and Banks rewarding loyalty.

May 2010 24 Employee Ray Roberston gives his thoughts on the employer - employee relationship here in the UK.

8 Latest Thinking Co-creation - part 3 of the new customer experience.

29 Conference Stephen Hampshire fills us in on the presentations at the ICS Conference.

12 Case Study

33 Case Study

Nigel Hill takes a look at the changes going on at Affinity Sutton.

Cougar Automation.

E nlig htened

Management g et s res ul t s 18 Conference

35 Research

The key topics and discussions from The Leadership Factor’s Annual Client Conference.

Sarah Stainthorpe provides us with part 2 of her summary on different types of research and their purposes.

In this issue...

VOLUME 7 ISSUE 2

37 Book Review Drive: The surprising truth about what motivates us.

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May 2010 Stakeholder

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Monthly online Omnibus Survey customers How often do ain? write to compl How trusted is yo ur brand compared to your competitors?

Which companies do customers recommend?

Do customers really dislike IVR in call centres?

How quickly do customers expect a response to a complaint?

DOES THE INTERNET IMPROVE CUSTOMER SERVICE?

Do customers expect companies to make use of social media?

How do customers like to be communicated with?

A new and highly cost effective method for getting answers you need to know.

On the 1st of every month YourSayPays distributes its online omnibus survey. The survey is live for the whole calendar month as over 3000 panellists complete the omnibus survey. Respondents represent age 18 and over from across the UK. At the end of the month we produce a report showing your results by age, gender and region.

If you need to track customer behaviour or attitudes, adding questions to our monthly omnibus survey is an ideal and inexpensive tool.

BUT, you don’t have to add questions every month. It can be a one off.

Often colleagues or senior management would like to know about customers’ behaviour, spending habits or their perception or awareness of a brand or product. If a whole survey is unnecessary then this could be the inexpensive quick fix you need to get the answers.

Add your questions to our monthly online Omnibus Survey.

Prices start at just £395 (excluding VAT) for 3 closed questions.

To receive a menu of costs and a schedule for submitting questions please email kay@yoursaypays.co.uk and we’ll email something straight back to you.

www.yoursaypays.co.uk

Nigel Hill editor

We’re entering a very interesting period at UK plc. The first peace-time coalition since the Great Depression in the early 1930s, the youngest PM for nearly 200 years and potentially a new parliamentary and electoral system. It’s quite exciting in many ways but coalitions are not the natural order of things in this country. So far, politicians have buried their differences and agreed to collaborate only in extremis. And economically the challenges are extreme. Relative to the size of the economy you have to go back to the Second World War to find a worse position and some of the coalition’s policies will add to Government spending. To avoid the markets losing confidence in us and precipitating a Greek-style crisis, the deficit needs to be tackled with plenty of urgency. Messrs Osborne, Cable and Laws are well aware of this and they are hoping to achieve as much as possible by making savings rather than increasing taxes. Savings from waste reduction and efficiency improvement rather than cutting front line services.

Stakeholder Satisfaction is the magazine for people who want their organisation to deliver results to employees, customers and any other stakeholders as part of a coherent strategy to create value for shareholders. We publish serious articles designed to inform, stimulate debate and sometimes to provoke. We aim to be thought leaders in the field of managing relationships with all stakeholder groups.

Our people and **** ******:

Editor:

Nigel Hill

Production Editor: Chris Newbold

If they want some ideas for reducing costs and increasing efficiency whilst at the same time improving service to ‘customers’, they could do a lot worse than look at Affinity Sutton. Formed as a result of one of the earli-

Designer:

Rob Ward

Creative Director: Rob Egan

est transfers of a large stock of urban housing from a local authority to a Housing Association, the company has driven through a culture change

Advertising:

Charlotte Ratcliffe

from a property-focused to a customer service-focused organisation as well as pioneering in its sector many best practices such as customer satisfaction-related pay for all staff, partners (for operations such as repairs and refurbishment) who are judged and rewarded on customer satisfaction as well as cost savings and a state of the art contact centre.

Reading the Affinity Sutton article (page 12) it’s also interesting to see how many of their customer satisfaction improvement actions have been low cost initiatives based on engaging and motivating staff to get the basics right and do best what matters most to customers. This can also be seen

Printers of Stakeholder Satisfaction www.stakeholdermagazine.com info@stakeholdermagazine.com Stakeholder Satisfaction PO BOX 1426 Huddersfield HD1 9AW Tel: 0845 293 9480

in some of the presentations at The Leadership Factor’s Client Conference (page 18) at companies like Direct Line, RBS International and the Royal Yachting Association, as well as our cover story, Cougar Automation (page 33). And our review of Dan Pink’s latest book (page 37) provides plenty of food for thought about using intrinsic rather than extrinsic rewards to keep staff engaged and motivated.

Best wishes Nigel Hill

NB: Stakeholder Satisfaction does not accept responsibility for omissions or errors. The points of view expressed in the articles by contributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher.

Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without prior written consent of the publisher.

Copyright © STAKEHOLDER SATISFACTION 2010

ISSN 1749-088X www.stakeholdermagazine.com

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News

news

British Gas customer-focused?

Having attracted much criticism for poor customer service, volume of complaints, poor complaint handling etc., it seems that British Gas is making real efforts to become more customer focused. Last November the company invited applications from anyone who wanted to join its new customer panel. Over 500 people applied and the customer panel was launched in early 2010. The panel has already visited customer service head office, a parts distribution centre and been out on service visits as well as having discussions and making suggestions for improvement. One of its successes was to get the bills re-designed to present information (such as how much gas the customer has used) in a more understandable way. Later a second customer panel was launched to accommodate more of the 500 applicants and on April 26th they made their first visit, to a British Gas call centre.

Not representative If, like in the British Gas example, people are asked to volunteer for the panel, you tend to get a certain type of person volunteering. How many people are sufficiently interested in British Gas to give up serious amounts of time to take part in a panel?

Not most people, as evidenced by the miniscule percentage of the customer base that applied. So you are not getting ‘normal’ customers.

Experts The kind of people who are motivated to volunteer for panels tend to be highly interested ‘experts’ – in the particular product or in general customer service / complaints issues. An example would be that the Consumer Affairs Director of uSwitch.com joined the British Gas panel.

Even if panel members are not experts at the outset, they tend to become one because their involvement gives them a heightened awareness of the company, product or subject area.

Misleading feedback Whilst customer feedback is a good thing in principle, it can be dangerous if an organisation places too much emphasis on feedback from non-representative customers. How do you know if they’re suggesting things that are just not what the majority of customers want? You could be taking action and making investments on initiatives that will not improve the satisfaction and loyalty of mainstream customers.

So is this all worthwhile? On the one hand you can never have too much contact with and feedback from customers, but the big concern about panels is how representative they are. There are three main problems:

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Promiscuous customers It’s generally assumed that switching is on the increase especially for products seen by consumers as undifferentiated, such as utilities, insurance, broadband and

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mobile but a survey by price comparison website Gocompare.com casts doubt on this assumption. The most heavily switched product was car insurance but even here only 23% had switched in 2009, closely followed by home insurance at 21% and mobile phone contracts at 19%. Only 14% had changed their broadband provider and 11% their credit card.

Overall, 59% had switched something, but 41% had remained loyal to all their providers. Needless to say, Lee Griffin, Business Development Director at Gocompare sees switching as a good thing and loyalty as a mug’s game, saying “the only reward you get for your loyalty is a higher price”. This is a view that would be shared by many people, emphasising how important it is that companies don’t give new customers better deals than existing ones. In addition, as well as rewarding the loyalty of existing customers it’s essential to promote the fact so that customers understand the benefits of not switching.

THE ONLY REWARD YOU GET FOR YOUR LOYALTY IS A HIGHER PRICE.

News

OFT backs switching

Rewarding loyalty

Another organisation that likes promiscuous customers is the Office of Fair Trading which sees switching by customers as a way to make banks improve their service.

Earlier this week, the chairman of the OFT, Philip Collins, re-stated the regulator's long-standing view that the banking market was still not working well for current account holders. He said it needed to be one in which "properly informed consumers manage their accounts and make active choices about which account provider to use, switching where necessary in response to individual and changing needs and new competitive offers".

Some of the banks do finally seem to be getting to grips with the advantages of rewarding the loyalty of existing customers. This has been driven by three main factors: · The heavy promotion and facilitation of switching by companies such as Gocompare has prompted banks to counter this threat by strengthening their own customer retention strategies. A customer who has several financial products with the same provider is less likely to switch than someone with only one product. · The recession has made the banks much more risk averse. Advancing loans to existing customers whose financial history is a known quantity is a much safer bet than lending money to new customers.

But earlier this year a survey of 1,000 UK adults for the BBC revealed high levels of satisfaction with the service provided by the UK's banks. 92% of bank account holders questioned had not changed their bank in the past two years and 93% of those people were happy with their service. Only 7% of people with bank accounts said they were considering switching in the next twelve months.

To manage these strategies, a key question to add to a customer satisfaction survey is “to what extent will you consider approaching bank X next time you need a financial product?”. This enables you to identify the specific drivers of that customer decision which are often factors like the extent to which they feel their past loyalty has been rewarded and the quality of advice they have received. S

· The financial services industry does seem to have become much more familiar with Service-Profit Chain principles in recent years and has taken on board the link between customer satisfaction, loyalty and profit.

Several of the major high street banks and the Nationwide Building Society are now offering preferential mortgage deals to existing current account customers, with benefits including free valuations, cashback options, better rates or the chance to borrow a higher proportion of the property value. Santander has a current account that’s available only to existing mortgage customers. It’s also a growing trend for existing customers to be offered preferential rates of interest on savings accounts.

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Latest Thinking

Co-creation Part 3: With customers not at customers This article, the third in our series on co-creation is based on Stephen Hampshire’s presentation at The Leadership Factor conference in Manchester in March 2010.

The basic purpose of co-creation is to help all businesses to engage more closely with their customers.

I’m going to focus on three aspects of co-creation: why co-creation is different, in important ways, from service or the customer experience; how social media is revolutionising the opportunities you have to engage with your customers; ways in which any organisation can start to benefit from the lessons of co-creation right now.

What’s special about co-creation?

tomer. At the moment it mostly provides a chance for staff to mitigate any dissatisfaction created by broken processes.

Here’s a definition from Wikipedia. “Cocreation is the practice of developing systems, products or services through the collaborative execution of developers and stakeholders, companies and customers or managers and employees.” I prefer my shorter definition: “Co-creation is doing things with customers, not at them”.

Co-creation tends to be associated with services, which are characterised as intangible, perishable, heterogeneous and inseperable. In other words we’re doing something for the customer rather than handing over a product, the 2.30 hair appointment can’t be sold at 3 o’clock, every hair cut is different and the customer has to be there while it happens. If we made a list of the characteristics that

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Doing best what matters most to customers

make a live performance special it would be pretty similar, which is where the customer experience metaphor comes from...but that metaphor leads us away from the active role that the customer should have in the interaction.

The above characteristics of services don’t cause co-creation...but they provide fertile ground for it. Whenever you have two people interacting to produce something of value it creates an amazing opportunity to provide a tailored solution for each cus-

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The thing is, being good at customer satisfaction is about doing best what matters most. But average importance conceals different needs and, more subtly, different people MEAN different things by “professionalism”, “efficiency” and so on. Being GREAT at customer satisfaction demands co-creation as a way to meet the needs of individual customers. Co-creation works by meeting each customer’s unique needs through involving them in the process of delivery. Good Business to Business relationships are all about co-creation (or you might call it partnership).

If co-creation is so great, why isn’t every-

Latest Thinking

one doing it? Because it’s hard. In order to be effective it has to be real (i.e. unscripted), which means you need great, engaged, staff. The surest way to kill cocreation is to try to fake it by telling staff how to do it. Mass customisation is all very well...but it doesn’t go far enough the essence of co-creation is that it is one on one. But if it’s not simply about customisation, it’s also NOT about choice.

It’s not about choice That’s right, choice can be bad. Choice can be confusing and dissatisfying for customers. One of the benefits of co-creation is that it allows you to AVOID making customers choose by tailoring to a customer’s needs without them knowing it. “Don’t make me think” is a classic text on web usability, which applies just as well to designing customer interactions. The principle is that customers are good at “satisficing”, quickly choosing something that seems pretty close to what they want, rather than spending the time to absorb every detail they need to make a fully-informed decision. This means, for example, that websites work better when they nest choices, rather than presenting all users with all the options.

Let me give you an example. Let’s say you want to buy a new computer. Do you want a Mac or a PC? Okay, so let’s imagine we want a PC and look for one on the PC World website. Next choice - laptop or desktop? If we want a laptop we get another layer of options. Even if you narrow it down to “home computing” you still get 59 laptops to choose between. This is precisely where good staff could step in, in person or through live chat, and co-create a great experience for the customer.

Customers prefer things that are easy and familiar, a principle that psychologists call “cognitive fluency” -

co-created experiences are easy for customers. Tesco are tapping into this idea with the “Your Basket” feature on their website. Apple, by the way, have a choice of 3 types of laptop on their site.

Co-creation is NOT just for services Car dealerships, for instance, have a great opportunity to co-create with customers...but it all hinges on trust. Do customers believe you will find the best option for them? In a co-created situation the customer sacrifices some control to gain ease, so they’ve got to trust you.

Manufacturers can’t often create a uniquely tailored product in the customer’s presence, although when they can the results are pretty spectacular. But let’s look at some trends in manufacturing.

Brands like Nike have embraced the trend towards customisation, and Lego have gone one step further by allowing customers to design their own products (some of which may go on to be retail models). More and more websites like Cafepress, Lulu, Etsy, and Spreadshirt encourage people to create (and sell) their own designs.

The Lean movement emphasises both the importance of giving the customer what they want and the greater efficiency of getting manufacture as close to the customer as possible. Doesn’t that sound a lot like co-creation? The alternative is commoditisation. Even toothbrushes are now trying, rather pitifully, to reflect our need for individual selfexpression.

Using social media for co-creation

before. That includes your customers.

Like it or not we are all going to have to get used to the idea that so called “social media” will be part of the way we talk and listen to our customers from now on.

Aleksandr Orlov has 36,000 followers on Twitter and 706,000 fans on Facebook. Let me say that again - 700,000 people have VOLUNTEERED to receive marketing messages from a fictional Russian meerkat. You cannot afford to write Aleksandr off as some sort of student cult. Every ad and every tweet or Facebook update carries a very clear message—for cheap car insurance use comparethemarket.com.

Here are Google’s stats on people searching for “Moneysupermarket” and “Compare the market”. Look what happens when Aleksandr gets on the scene in January last year.

It’s no coincidence that we needed the internet to open this massive untapped desire for creation and customisation. The web is changing the way we talk to each other, connecting and organising people who had no easy way to communicate

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Latest Thinking

Viral complaining At The Leadership Factor Conference we asked the audience:

“If I posted a complaint about your company on Twitter, how long would it take you to find out about it?”

Here’s the results.

In October last year I had a question I wanted to ask Leica - I wanted to know if they could tell me where to hire one of their mind-bogglingly expensive, hugely desirable, cameras. After waiting two weeks for a response to my email I was getting annoyed, so I posted a whinge on Twitter. Simple reputation management, or listening to customers, is not optional nowadays...and it’s so easy that it’s unforgivable not to do it. Basic competence would be to react to my whinge that

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day...but I never heard a word. Did Leica ever read it? No idea, but I do know that a fair number of other people did, because that post gained me more followers than any other I’ve made. Why? Because they monitor the social web for mentions of brands like “Leica”, “Nikon”, “Canon” and so on. So why don’t Leica?

New technology There’s an ever-escalating growth of new technology than can help you to interact more with your customers. For example, there’s a useful ethnography app for the iPhone, Flip videos are a cheap and effective way to get engaging customer voices right into the heart of your business, and that’s not even getting to voice over IP, social media, webcams or text analytics.

How many businesses even use the potential of SMS text for quick surveys or information alerts? One great use of this technology is for opt-in information sharing. Kirklees Council, for example, set up a “Gritter Twitter” to keep residents up to date with winter road disruptions.

“Crowdsourcing” is a trend that will not (and should not) go away any time soon.

Eric Raymond, talking about software development, puts it this way - “given enough eyeballs, all bugs are shallow”.

Crowdsourcing can cut R&D costs and improve service by using the “wisdom of the crowd” and involving customers at the design stage. A good example is “Womanity” - a new site designed to involve customers in co-creating future Clarins brands and products.

If you’re still resisting some of the new technology, perhaps you should think

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about Douglas Adams’ quote on the subject (above).

The Cluetrain Manifesto made a passionate call for companies to make the most of the opportunity that these new channels provide for staff and customers to have unmediated conversations. This is amazing. Seriously, this should change the world. It means if I’m having a problem with my camera I can chat direct with the people who designed and built it.

Unmediated contact between engaged staff and customers is hugely powerful.

Networks of customers are forming, helping each other, talking about you and your products. The choice is whether you want to make that part of your customer service and marketing strategy, or watch from the sidelines and threaten to sue anyone who criticises you?

Making a start So how can we start co-creating with our customers? The first step is to talk to them, or invite them to talk to us. How often do you make proactive contact with customers (not counting selling)? How easy do you make it for customers to contact you?

A lot of agencies and consultants actively discourage organisations from talking to their customers— “leave that to us, we’re the experts”. That’s a terrible idea—go and talk to customers for yourself as well as researching them. So many organisations have dissatisfied customers waiting on hold or fighting IVR systems and disengaged staff crying out for customer contact...does anyone else find that odd? Call it virtualisation if you want to sound cutting-edge, but why don’t more businesses get ALL their staff talking to customers?

Latest Thinking

Talking to customers is not the same thing as prioritising anecdote over facts, it’s a cultural question about how you see customers. It means talking about customers, not processes. It means customer contact is NOT a cost. How many people do you employ? How many of those people are also customers? Why not? If they are, why not talk to them as customers?

Bullshit pollutes a lot of our communication with customers. According to Harry Frankfurt,

“bullshit is a greater enemy of the truth than lies are.”

Bullshit is so damaging because the bullshitter (unlike a liar) has no regard for the value of truth. It doesn’t matter to them whether what they say is true or false, so long as it sounds good. The Cluetrain Manifesto tells us how to cut out the bullshit - cut out the middle men (and women). Cut out the people who polish all the risk, and integrity, out of every message. Sometimes you have to sacrifice perfection of message for honest communication. This is particularly important at moments of truth, like when a customer has a problem or complaint, and it makes such a difference because customers judge our INTENTIONS at least as much as outcomes. Co-creation means allowing staff to take ownership and deal with a problem in the right way for that customer, at the point of complaint.

to being mindlessly sold to. If you send me a new credit card and ask me to phone up to activate it, that’s great—I like security. If you use that interaction to kidnap me and try to sell me insurance for 15 minutes you lose. I believe this kind of hostage selling does more harm than good. BUT what’s one of the most powerful sales tool there is? Maybe “I’ve got one of those myself”.

Here’s a new sales strategy: S

Stephen Hampshire Client Manager The Leadership Factor Stephen manages customer and employee surveys for RBS, NatWest, Visa and Pace amongst others. He also presents training courses on employee surveys, customer surveys and data analysis.

1 make good products; 2 give them to staff; 3 let them have natural conversations with customers. This is exactly how specialists (climbing shops, running shops, bike shops) sell at a premium to the best customers in their market, who go away happier.

stephenhampshire@leadershipfactor.com

How do you “do” co-creation? Come at every interaction with the aim of adding value for the customer and you ARE co-creating.

The thing is, customers don’t have a problem with talking to you...but they do object

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Case Study

Closer to the Customer 12

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Case Study

our job is to look after our customers Housing Associations have two purposes: 1. To improve the lives of their residents by improving the quality of their homes, neighbourhoods and communities. Some, like Affinity Sutton, even have declared objectives to improve wider aspects of residents’ lives such as helping them with skills training for jobs, child care and access to low cost finance such as credit unions.

2. To invest in developing new social housing, especially in areas where there is a shortage of affordable homes. Affinity Sutton builds over 1,000 new homes each year, a mix of rented, shared ownership and houses for sale. The profits from sales help to fund further investment in achieving objectives 1 and 2.

Affinity Sutton is the product of three separate housing associations coming together – Broomleigh, Downland and William Sutton. The customer service ingredient goes back to 1992 when the London Borough of Bromley instigated the first urban council housing stock transfer in the UK. The transfer of 14,000 properties to what was then called Broomleigh Housing Association was also the largest ever made at that time, so the company was a ground-breaking organisation from the outset. To win tenant support for the change quite a lot of promises were made, so the early focus of the company was property refurbishment and

modernisation but in 1995 when that programme was well in hand, CEO Keith Exford brought in Neil McCall as Operations Director with a brief to modernise the organisation and make it customer-focused.

Not very close to the customer Neil’s enthusiasm for customer service originated during a trip to the States in 1993. As well as being impressed by the

general level of service and attentiveness compared with the current UK norm, he was also intrigued by the systems behind it. He would book hotels through their call centres, for example, and be amazed by how much they knew about him, such as his history of Neil McCall staying with that chain, how they would gather more information about his likes and dislikes, how they would treat him the same across all their hotels. Broomleigh had people on the ground who knew the tenant well but it operated through three local offices that handled their own calls

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Case Study

and effectively did their own thing. There was no information whatsoever to monitor customer satisfaction or even parts of the customer service function. Neil got his first information about what was going on (stats on call volumes and abandonment) from BT! There were plenty of abandonments. Perhaps there was nobody in the office when the phone was ringing, perhaps it was inconvenient so wasn’t answered. With most of the staff having been transferred over from the local authority, it just wasn’t a customerfocused culture. Not on the front line, not in the back office and not even at senior management level. To demonstrate the problem to the Senior Management Team, Neil made a video of a real tenant calling a local office and waiting as he stood there while the phone rang and rang. Neil asked Mark Easton, another new 1995 recruit to run a one-year customer service project to assess Broomleigh’s current service levels, to look at latest thinking and practice, particularly the use of call centres for service delivery and to examine what cultural and communication changes were needed to make the organisation customer-focused.

A call centre for housing Mark decided to set up a pilot call centre in Penge. The small eight people Contact Centre was officially a pilot not just because it was a new thing in housing but also because at that time there was still a lot of suspicion generally about call centres. Criticism included ‘de-skilling’, poor service because the technology wasn’t good enough or the staff lacked the expertise and within Broomleigh because it was seen as a Big Brother approach

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with staff constantly monitored through the contact management stats and the start of a centralisation process that would remove all power from local offices and eventually close them down. In some ways they were right. By 2000 the Contact Centre had 12 staff in a new building and all calls had been transferred to it from local offices. But only because it worked well, had eliminated abandonments, improved response times and was increasingly acting as a spearhead for making the organisation more customerfocused and changing it in other ways too.

A customer culture To take responsibility for the Contact Centre and new customer focus drive, Broomleigh had appointed a new Assistant Director of Customer Service.

Two in fact – Vicky Bonner and Ann Sheckley took on the role as a job share.

They developed ‘Customer First’, a four day customer service training programme for every member of staff from caretaker to CEO. But to change the culture from “our job is to look after our properties” to “our job is to look after our customers” was going to take more than a four day training course, because along with its 14,000 properties, Broomleigh had inherited many of its 200 people from the London Borough of Bromley and a large number of them had little

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exposure to other sectors and although they knew the job, they didn’t like the idea of changing it in any way, and were definitely not ‘close to the customer’. The expansion of the Contact Centre enabled the company to recruit young people, often from the private sector, train them thoroughly in customer service, infuse them with the customer-focused culture and, as they developed, promote them out into the rest of the organisation.

Partnering As the 1990s advanced, customer satisfaction was becoming increasingly important throughout the UK, even in the independent sector, and the Government now required Housing Associations to complete a customer satisfaction survey, albeit only every three years. Vicky and Ann commissioned Broomleigh’s first one in 2000 with high hopes after all the work they had done, but the results were disappointing, especially for repairs. A lot of time and money had been spent improving the properties in the 1990s but this wasn’t reflected in tenant satisfaction.

As Neil McCall reflected on this disappointment, the reasons became clear.

The system Broomleigh had inherited was to undertake repairs and improvements to its properties through a network of local contractors, who were used to working in a very contractual way. Neither efficient nor customerAnn Sheckley focused, the relationship

Vicky Bonner

Case Study

became increasingly confrontational as Broomleigh tried to modernise them and encourage them to get closer to the customer. Neil therefore looked around at what was happening in other sectors and found a civil engineering company called Osborne that was doing a lot of work through a ‘partnering’ arrangement with Railtrack. At the time this was quite a step change involving:

- Open book accounting - Not pricing and quoting every single job but working on an agreed profit margin with the partner - A recognition that the contractor did need to make an acceptable profit - A profit share where both partners would benefit from any underspend on the budget - A customer satisfaction bonus to reward the partner if high levels of customer satisfaction were achieved and to make sure that any underspend bonus was not achieved at the expense of good outcomes for the customers.

Fundamentally it was about both partners working together, looking at the big repairs picture and working out ways of achieving better outcomes at less cost. If that was achieved, both would benefit.

The partnership with Osborne broke new ground in the industry and became an award winning project. Constructing Excellence, a Government funded body with a brief to promote innovation in the

construction industry selected the partnership as a National Demonstration Project. By 2001 the small contractors were all eliminated and for reasons of risk management a second partner, Rydon, had been appointed to work alongside Osborne.

Measuring customer satisfaction By now, Broomleigh was doing a number of innovative things and was well ahead of the housing industry game with its focus on customer service. However, the scores in its annual customer satisfaction survey were not going up. In 2003 they brought in UK customer satisfaction specialists, The Leadership Factor, to undertake a strategic review and recommend how Broomleigh could translate its good work into higher levels of customer satisfaction.

The fundamental problem was that their customer satisfaction survey was not providing clear guidance on exactly what needed doing to improve satisfaction. So in another pioneering move, Broomleigh dropped the rather bureaucratic ‘STATUS’ survey that was almost universally used by the industry and replaced it with The Leadership Factor’s much more actionfocused methodology. This brought several benefits: - A move from 5-point verbal to 10-point numerical scales for more precision and reliability - Questions based on ‘the lens of the customer’ (i.e. the things their own tenants found most important) rather than standard industry questions invented by bureaucrats - An understanding of the relative

importance of customers’ requirements so that Broomleigh could ‘do best what matters most to customers’ - Clear, focused PFIs (priorities for improvement) at the end of each survey so the company knew what action to take and was not diluting its effectiveness by trying to improve too many different things - The introduction of a customer satisfaction bonus for all staff if the targets were hit – quite an innovative move at the time in any sector, let alone housing.

Expansion By now Broomleigh had moved much closer to customers and, due to the success of its sector-leading innovations such as partnering and the contact centre, was a very efficient and profitable organisation.

Deciding that the next challenge was expansion, Keith Exford and the Board looked for opportunities to merge with another Housing Association and identified Downland Housing Association, a company with slightly fewer properties but spread over a much larger geographical area along the south coast. When the merger happened in 2004, management set up a group structure with a parent company called Affinity to take over all corporate functions such as finance, with operational functions vested in Broomleigh and Downland as subsidiaries.

The Broomleigh journey was now repeated in Downland – customer service training, customer satisfaction surveys, customer satisfaction bonus, partnering, winning hearts and minds for a more cus-

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Case Study

tomer-focused, go-ahead culture.

Downland’s incoming calls were routed into the Broomleigh contact centre which was now up to 20 employees. As soon as Downland was assimilated, management were looking for the next merger opportunity and identified William Sutton Housing, an organisation with over 20,000 properties spread all over the country. The 2006 merger transformed Affinity (now renamed Affinity Sutton) into a top 5 Housing Association with 55,000 properties, a national footprint and one of the biggest new build programmes of any social landlord. William Sutton had good customer satisfaction and a century of heritage but had a high cost base. So to speed up the integration Neil McCall moved over to be CEO of the new operating company.

The Contact Centre By 2008, when the William Sutton incoming calls had all been re-routed, the Broomleigh contact centre employed 37 FTEs - mainly full time staff. In many ways it had driven and policed the customer satisfaction journey of the organisation. As well as being a great unit for recruiting and developing new employees that could subsequently percolate out into the organisation, taking their customer-focus with them, the contact centre was at the forefront of adopting best customer service practice.

The journey was very much helped by consistency of senior staff. Both Vicky Bonner and Ann Sheckley were actionfocused, eager for change and determined to base the contact centre (and the customer service function) on the

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best practice to be found in the private sector. The latest CRM and resource planning software were introduced as were targets at team and individual level which were monitored daily and displayed in real time on a Call Board. Not typical Local Authority or Housing Association culture at the time!

Vicky and Ann also played a lead role in driving the organisation closer to the customer by commissioning the customer satisfaction surveys, disseminating the results, managing the action planning process after the survey and organising company-wide customer service training.

Following the Customer First training in 2000, a second module, ‘In the Customer’s Shoes’, was developed and run in 2005, and a third, ‘Closer to the Customer’, is planned for this year. At Vicky and Ann’s insistence, the customer service training courses were also extended to cover all the partners’ employees. Partners were also included in the new complaint handling procedures, targets and training, as well as the development of a culture that embraced complaints, encouraged and captured as many problems/complaints as possible and significantly reduced the average time for responding to and resolving complaints.

Improving customer satisfaction Complaint handling was one of Broomleigh’s first PFIs (priorities for improvement) from the early Leadership Factor surveys. To drive satisfaction improvement by making a difference on the PFIs, the secret is to keep the spotlight on, constantly reminding and

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motivating staff to address the relevant issues. Vicky and Ann kept reminding staff about the customer satisfaction bonus, did countdowns to the next survey and after listening to the Irish Life talk at The Leadership Factor’s 2006 Client Conference, introduced a succession of initiatives to engage staff by bringing customer feedback into the office. (To read more about Irish Life’s customer satisfaction improvement measures go to www.stakeholdermagazine.com/articles).

These included PFI reminders in the lifts, cardboard cut-outs of customers with velcroed comment bubbles from customer surveys and a Pledge Tree in the staff kitchen / restaurant area. In its first week, the Pledge Tree generated 70 pledges of actions staff were going to take to address the PFIs, and the prize for the best one was only an Easter egg. Motivating staff to improve customer satisfaction doesn’t have to be expensive! When one of the PFIs was to improve the general surroundings in people’s neighbourhoods (with litter and dumped rubbish among the main dissatisfaction drivers), another costeffective satisfaction improvement initiative was to put skips on all the estates and encourage residents to have a good clear-up. This involved customers and made it obvious that their concerns were being addressed, and since the Housing Association has a responsibility to remove abandoned rubbish, the cost of the skip hire was no more than they would have spent anyway.

Evolving the surveys As companies become more mature in measuring and improving customer satisfaction, the difficulty of the task tends to

Case Study

increase. The higher customer satisfaction becomes, the harder it is to improve it further. Having improved customer satisfaction very successfully in the early years and established themselves near the top of the housing sector league tables, Affinity Sutton encountered this when the improvement curve began to flatten. To counter this trend they made four changes:

1 2 3

4

The future Affinity Sutton’s closer to the customer journey was to take a mish-mash of inconsistent, uncoordinated customer service provided by a myriad of local offices and replace it with a planned, monitored and consistently good level of service led by the contact centre. This part of the change process is now largely complete but ironically, the next phase is about reversing that trend, but in a controlled way. You

The frequency of survey was increased to monthly. Having results every month keeps the spotlight on customer satisfaction and greatly improves the link between taking action and seeing a change in the results.

The sample size was increased so that results could be drilled down to the lowest possible level. Affinity Sutton has divided operations and service delivery into 21 neighbourhoods. Each neighbourhood now gets its own customer satisfaction results every month.

As well as continuing to score satisfaction with the most important customer requirements out of 10 each month (because you have to have a scorecard that accurately shows whether satisfaction is improving or not), Affinity Sutton has introduced much more focused CEM (customer experience modelling) questions. These provide very tangible data on specific customer experience touchpoints from whether repairs staff showed identification to the length of time it took for a call-back to be made. The advantage is that levels of satisfaction can be specifically linked to staff behaviours that did or didn’t happen.

Since repairs tended to emerge as a PFI on the annual customer satisfaction surveys, and most of the actions to address the PFI were down to partners rather than Affinity Sutton, a separate monthly repairs tracker survey was introduced. Previously, the partners had an obligation to conduct their own ongoing surveys to monitor customer satisfaction, but the results were suspiciously high when compared with the annual Affinity Sutton surveys. When the monthly monitoring of customer satisfaction with repairs was taken over by The Leadership Factor, satisfaction was shown to be much closer to the annual surveys and partners were given a clear objective to improve it. Based on repairs completed in the previous month, The Leadership Factor conducts 100 interviews each month for each partner (1,000 per month in total). The combination of swift information about current performance and transparent benchmarking across the partners (they all see each other’s results), has created a powerful incentive to improve. In the 21 months that the survey has now been running customer satisfaction with completed repairs has improved by over 10% and is much higher than it has ever been in the past.

have to get rid of inconsistent levels of service where nobody really knows what’s going on because that’s rarely good for the customer and it’s almost always more costly than it should be. However, whilst centralisation improves control, reduces cost and improves service, there’s no getting away from the fact that one size doesn’t always fit all and, in a national Housing Association like Affinity Sutton there’s a danger that the landlord is perceived as remote and inaccessible. And that’s not closer to the customer! The next challenge is therefore to develop and implement differentiated service for different customer segments (e.g. general needs tenants, shared owners and retired people) without reducing the quality of service or increasing costs. These objectives as well as perceived accessibility will be achieved partly by improving self-service options on the web – a good model being the way the DVLA has made it so much easier for us all to renew our road tax using their website. But customers can’t do everything themselves on the web, especially when customer requirements are as complex as they are in housing, so there’s a need to improve local service delivery without sacrificing the control, quality and consistency that have been so hard won. It will mean a more mobile, flexible and well equipped workforce. Neighbourhood Housing Officers, for example, will all have to be equipped with laptops, 24 hour remote access to all computer software and files so they can instantly check the status of any of their tenants’ repairs, transfer requests or arrears. Managing all this will be a bigger challenge than managing a contact centre and it will be essential to make sure that it evolves in a way that benefits customers, not just the organisation – hence the brand name for the next customer service training – Closer to the Customer. S

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Client Conference

2010

The

Venue: Radisson Blu, Manchester

On March 18th almost 150 delegates assembled at the Radisson Hotel at Manchester Airport for The Leadership Factor’s 11th Annual Client Conference. With speakers from a diverse range of organisations that have succeeded in improving customer satisfaction, this exclusive focused event is free to The Leadership Factor’s clients and a small number of selected guests but is not available to the public. A combination of latest thinking and real world advice from successful practitioners, the conference provides an exceptional learning and networking opportunity for customer management professionals. The conference was opened

by The Leadership Factor’s own ‘thought leader’, Stephen Hampshire. Always entertaining as well as interesting, and usually a little bit provocative, Stephen’s take on co-creation is published in full on pages 8 to 11 of this magazine. We’ll therefore start this review with the morning’s second speaker, Chris Wilson, Director of Fulfilment and Supply Chain at RBS Insurance.

Green Fluffy Des and Red Anti-Des As well as market leading RBS brands such as Direct Line, Churchill and Green Flag, Chris is responsible for many top partner insurance brands such as BMW,

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Nationwide and Caravan Club. Whilst it’s obviously essential to protect and improve the loyalty of RBS customers, it’s even more critical to deliver a flawless customer experience for the customers of partner companies. With 22 million policies, RBS insures over 20% of the UK adult population and handles over 50 million customer calls every year.

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Conference

When it comes to customer experience, RBS Insurance is now right at the top of whatever benchmarking league table you care to use – The Leadership Factor’s large customer satisfaction league table, net promoter score or specific aspects of service delivery such as keeping customers informed. Their journey from good to great was a combination of some very clever stuff plus a lot of absolute basics, spiced up for employees by a good dose of inspired creativity. First the clever stuff.

Following some complex analysis of thousands of customer interviews by The Leadership Factor, it was calculated that a combination of increased renewals plus cost savings from fewer complaints and inbound calls meant that every 2% improvement in customer satisfaction delivered £1.7 million to the bottom line.

up and perhaps end up making a formal complaint. The differences between Green Fluffy Des and Red Anti-Des were brought to life by recording a percentage of the customer survey interviews and playing back customers’ comments to contact centre staff. But there was also a second key to success.

Focus on PFIs There was now a clear incentive to improve customer satisfaction, but the secret to achieving it was to move away from monitoring a series of complicated operational measures (the lens of the organisation) to focusing on a very small number of usually simple things that were bugging the customer and fixing them (the lens of the customer). Monthly customer satisfaction interviews enabled The Leadership Factor to identify for RBS Insurance four basic things that, if not flawless, would damage the customer experience, slash renewal rates and drive up costs. These PFIs (priorities for improvement) were not rocket science – an example of one is keeping customers informed all the time about what’s happening with their car repair. There were two keys to addressing the four PFIs. The first was making it real, interesting and motivating for the thousands of employees handling those 50 million calls. This was where Green Fluffy Des and Cuddly Calls came in. Christened ‘Engagement for Success’, the initiative that brought the PFIs to life featured Green Fluffy Des (I am Delighted Every time and Stay) and his alter ego Red Anti-Des, a bottom box customer who had been let down on one or more of the PFIs, was very unlikely to renew and would often cause staff a lot of hassle and grief calling in to chase things

It’s our business in your hands Like many organisations these days, RBS Insurance delivers a big chunk of the customer experience through a wide range of partner companies, from a local garage providing roadside assistance for a Green Flag customer stranded on the motorway to a loss adjuster assessing flood damage for a home insurance customer in Cockermouth. Consequently, RBS’ customer satisfaction, renewal levels and business success will be hugely affected by the performance of these many suppliers. Chris therefore assembled all of them at a conference in Edinburgh and told them that since ‘it’s our business in your hands’, ‘here’s the new reality’, and the new reality was delivering a flawless customer experience especially on the four PFIs. Another critical part of the new reality was that the partners’ customer satisfaction performance would be monitored – independently and continuously.

Monthly customer satisfaction interviews would be conducted in sufficient volumes to produce scores for all partners. Getting a high Red Anti-Des count would not be good for their future relationship with RBS Insurance!

Cuddly Calls Partners were educated about the benefits of customer satisfaction (Stephen Hampshire presented to them at the Edinburgh conference) and were encouraged to adopt Des with their own employees. They were also provided with recorded customer comments from their own customer satisfaction interviews and asked to introduce the final piece in the customer experience jigsaw – Cuddly Calls. Again not rocket science, Cuddly Calls are simple follow-up calls following critical touchpoints in the customer experience to check that everything is OK, and if not, what can be done about it. A pilot campaign had demonstrated that Cuddly Calls could increase the customer satisfaction index from 81% to 92% - and remember how much each 2% improvement was worth to the bottom line!

Here are Chris’s six conclusions about how to successfully improve customer satisfaction: 1. Calculate the benefit and spell out the business case. If you can add £1.7m to the bottom line for every 2% improvement it’s a powerful motivator.

2. Understand what really matters to your customers.

3. Make it real for your people.

4. Understand what improvements will have the biggest impact.

5. Build a clear outcome-focused plan that will deliver improvement.

6. Design satisfaction into the process – don’t leave it to chance.

Next up were Affinity Sutton, one of the UK’s largest housing associations. Their story is told on pages 13-16 of this magazine.

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Conference

Who complains most?

Filling the graveyard slot after lunch was Leadership Factor Director Greg Roche.

Perhaps that’s what prompted him to use the technology and get everyone voting on a whole series of questions designed to profile the typical complainer. Based on a YourSayPays survey conducted in February 2010 with a representative sample of the UK population, a complainer is more likely to be:

Why customers don’t complain Didn’t think it would make any difference = 52.2% Didn’t have time = 18.4% Didn’t know who to complain to = 15.5% The complaints process is too much hassle = 14.2%

- Female - 41-60 years old

69.2% 40.2%

Don’t like complaining = 11.3% Didn’t know how to = 9.1%

Moving on to the UKCSI results from January 2010 to explore UK organisations’ complaint handling performance, Greg informed us that:

Other = 8.6%

Staff behaviours

- Problem incidence remains high, with nearly 12% of the population having experienced some kind of problem with a UK organisation in the last 12 months.

- 75% of us do complain to the organisation when it happens.

Dealt with it immediately

8.1

Took responsibility

7.9

Were sympathetic

7.1

Listened carefully/wanted to fully understand the problem

Since it’s now widely recognised that a good complaint handling process will make complainers far more satisfied and loyal than customers who have a problem but don’t complain, it’s really important to encourage everybody who has a problem to bring it to the organisation’s attention.

The good news is that the reasons given by the 25% who didn’t complain are all easy to address, as shown in chart (top right).

The UKCSI is also very clear about the staff behaviours that make the most, and least favourable impression on customers when they do complain. The chart (middle right) shows customer satisfaction with the complaint handling process based on various staff behaviours. The biggest positive differentiator is dealing with the complaint immediately.

And these staff behaviours are really important, because the thing that causes complaining customers the most irritation is a poor staff attitude. (As shown in the graph on the right).

7.0

Told you how long it would take to resolve

6.9

Told you what would happen next

6.6

Apologised

6.5

Acknowledged your complaint in writing

5.8

Passed you on to someone else

3.4

Seemed uninterested

3.0

Made excuses

2.9

Dismissed it

2.5 1

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4

5

6

7

8

9

10

Annoyance by cause of problem (where 1 = ‘slightly irritated’ and 10 = ‘very annoyed’) Staff attitude

8.2

Staff competence

7.7

Cost

7.6

Late delivery or slow service

7.5

Other

7.2

Quality or reliability of goods/services

7.1

Suitability of goods/services (e.g. didn't do what you expected)

6.9

Availability of goods/services (e.g. couldn't find what you wanted)

6.7 5

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Internal benchmarking

New Customer Satisfaction Where are we now?

Making the most of your survey results Following Greg was Paul Stoddart, Customer Service Manager at Johnsons Apparelmaster who are the UK’s leading provider of workwear, renting and laundering over three million garments per month for around 40,000 organisations.

Johnsons did their first customer satisfaction survey with The Leadership Factor in 2004 and identified an unusual outcome – their new customers were less satisfied than longer standing ones. With most stakeholders (customers, employees, suppliers, shareholders) there is a honeymoon period of high satisfaction but in Johnsons’ case the opposite applied. At 72.4%, the Satisfaction Index of new customers was 5% lower than the average for the entire customer base.

2004 customer survey results

Beating the competition Johnsons also used the survey results to gain a competitive advantage. They discovered that they were significantly out-performing their two main competitors on customer satisfaction (see results below) and that they had a particularly marked competitive advantage on the people requirements such as account managers’ performance, helpfulness / responsiveness of staff and complaint handling / problem solving ability. Since the garments and their cleaning can be givens, it’s the people that are often the differentiators.

2009 Customer Satisfaction Score versus key Competitors

Across hundreds of customer satisfaction surveys and clients, The Leadership Factor often finds that one of the most successful methods for improving customer satisfaction and loyalty is internal benchmarking. Nobody wants to be at the bottom of prominently publicised internal league tables. Since producing data to individual branch, call centre, sales team or partner (like RBS above) level will also tell each branch / team what it needs to do to improve its own scores, this is a winwin situation. Analysis of Johnsons’ customer satisfaction results showed that the same people factors that differentiated the company from its competitors also differentiated branches with the highest and lowest levels of customer satisfaction.

This enabled the company to introduce a very successful initiative at its poorest performing site that included new training backed up with NVQ qualifications, new departmental team leaders and team briefings, a re-structured customer service office and improved communications.

Together with the pressure of the internal benchmarking this poorest performing branch improved its Customer Satisfaction Index from 74.6% to 84% and moved up into the top ten branches.

Lost customers

Competitor A

New customers

Existing Customers

Based on the satisfaction gaps identified by the survey, Johnsons made over 30 major operational, IT and procedural changes, introduced new manuals, starter packs and online facilities to help new customers and trained over 600 employees in the new ways of working. Quarterly customer satisfaction surveys were introduced to monitor progress. As shown in the chart below, the result was a massive increase in new customer satisfaction within two years.

Competitor B

Johnsons used the information to develop sales materials and sales training that highlighted the differentiators plus a direct mail campaign focusing on Johnsons’ superior customer service. 100,000 postcards mailed in 2009 resulted in 2,000 appointments and 286 new customers with a contract value of £1.5 million. And all this for a campaign costing no more than £30,000.

Johnson also asked The Leadership Factor to interview lost customers, with some very interesting results. First it provided valuable feedback to combat salesforce assertions that when customers were lost it was almost always on price and therefore couldn’t have been avoided. In actual fact, whilst price was the reason for 28% of customer defections, 48% were down to service. This was consistent with the fact that product and service requirements scored much higher than price for importance on the customer satisfaction surveys. Another very useful finding from the lost customer survey was that 60% of them would consider Johnson again in the future, giving the company a good reason for keeping in touch as well as focusing on service benefits more than price for winning them back.

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Conference

Service Profit Chain (SPC)

Our Customers

Our people Staff

Internal Service

Engagement

Value

Customer Satisfaction

Loyalty

Profitability and Growth

Customer Promises

Becoming the best bank offshore Based in the Channel Islands, the Isle of Man and Gibraltar, RBS International has a clear mission to be ‘the best bank offshore for service’. Stuart Miller, Head of Customer Experience, explained how the October 2008 crash in the financial markets had provided a massive challenge but how RBS International had chosen to respond by redoubling its focus on Service-Profit Chain principles (see the first 6 editions of Stakeholder Satisfaction at www.stakeholdermagazine.com/articles)(See diagram above).

The company’s customer satisfaction surveys had shown, like many others, that improving customer satisfaction was not about massive investment or short term gimmicks, but was down to getting the basics right, consistently, every day. To drive this home, the Customer Promises campaign was developed. The three promises were: 1. I listen, understand and respond to your needs 2. I do what I say 3. I act where problems arise.

To drive home the internal service quality message, monthly internal surveys were conducted with scores out of 10 across all 13 divisions for the three promises. There were league tables, internal benchmarking and, to provide additional insight, employees were encouraged to make verbatim comments as much as possible to explain their scores. The internal surveys showed that all departments wanted to deliver good service but tended to blame each other when things fell short. The surveys resulted in all taking a much more positive approach, stopping the blame game and collaborating much more to improve things. This was helped by the ‘Across the Floor’ initiative where staff were encouraged to personally visit another team (“to get feedback and to understand how we can meet your needs better”). Across the Floor was promoted with the same ‘I U ME’ purple branding but with some new posters. Screen savers have also changed to focus on Across the Floor and internal customers.

The outcomes All the effort certainly made a difference.

Every one of nine frontline RBS International businesses improved customer satisfaction in 2009 and the icing on the cake happened at the end of the year when the Isle of Man Bank, Peel branch, won Customer Service Team of the Year at the National Customer Service Awards.

They particularly emphasised internal service to internal customers because this involves everybody and was good for improving staff morale after the crash.

There was also strong focus on how higher customer satisfaction would improve financial returns. The Vision Pyramid illustrates the three planning levels of vision, strategy and culture.

Service Strategy

The ‘U and ME’ service branding was proliferated around the company on wall posters, screen savers on everyone’s computer, mouse mats and display panels. Staff couldn’t go anywhere without seeing ‘we’re all customers’, ‘I, U, ME’, and the Customer Promises. Stuart called it TOMA – top of mind awareness.

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The company’s not resting on its laurels. In 2010 the customer satisfaction drive has been freshened up with new, blue branding and new posters, plus a custom-made

Conference

DVD showing how an unempathetic branch employee delivers a poor customer experience and subsequently regrets and learns from her behaviour. The DVD was widely used within the company including at group training sessions in all branches.

Charting the candidate experience With a Customer Satisfaction Index consistently over 90%, the Royal Yachting Association is right near the top of The Leadership Factor’s customer satisfaction benchmarking league table. Making the final practitioner presentation, James

Stevens, Chief Examiner at the RYA, explained how they use customer satisfaction tracking to monitor the satisfaction of candidates for Yachtmaster qualifications. Echoing comments made by Chris Wilson earlier in the day, James pointed out that the continuous tracking surveys also help the RYA to assess the performance of their partners – in their case, examiners who work part time for the RYA and conduct Yachtmaster exams all around the world. The exam is a full day affair, with a large yacht or motor launch, often in difficult seas. Nobody doubts the technical competence of the examiners, but one-to-one in close confines, and maybe in stressful situations, communication skills and empathy can make a big difference to the candidates’ customer experience, pass or fail. The survey, which interviews candidates all over the world, does ask questions about non-personal requirements such as booking procedures, fees and credibility of the qualification, but the differentiators are strongly driven by examiners’ relationship skills. It’s things like the examiner’s helpfulness, friendliness, willingness to explain things properly that make the difference. A random sample of examiners’ candidates is enough to flag up any examiners who are coming towards the bottom of the internal benchmarking league tables. A census of their candidates can then be interviewed for a period to verify whether there’s a real problem. The fact that examiners know that the satisfaction monitoring happens is enough to focus them on the

importance of the candidate experience as well as the technical requirements of the examination.

Intrinsic or extrinsic rewards?

The conference was closed by Leadership Factor Client Manager, Richard Kimber who pointed out that most organisations still attempt to motivate most employees using traditional ‘carrot and stick’, ‘if – then’ rewards; basically extrinsic reward systems, but if they switched to an intrinsic, self-motivated mind-set, could it revolutionise their ability to deliver great customer service? For details of intrinsic rewards see Richard’s review of Dan Pink’s book, “Drive: the surprising truth about what motivates us”, on page 38.

Conference feedback Feedback from delegates illustrated some valuable benefits from attending the conference. As well as meeting and benchmarking with new people from different industries who may have completely different ideas, delegates took away a lot of value from listening to the speakers. New, ‘latest thinking’ ideas are always welcome, but the main benefit for most people was listening to customer management practitioners from successful companies who have driven real change that resulted in tangible and often quantifiable benefits for their organisations. S

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Employee

Work According to the results of research from global professional services firm Towers Watson, the economic downturn has fundamentally altered the way employees view their work, the organisations they work for and their business leaders, shifting the whole employer-employee relationship in the UK. Unsurprisingly, employees don’t like what has happened compared to pre-recession times when jobs and career opportunities were plentiful and employees often held the balance of power in the employer-employee relationship.

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Employee

Attitudes The Towers Watson Global Workforce Study 2010, “a survey of employee attitudes and workplace trends”, was based on more than 20,000 private sector employees in 22 countries, including over 1,000 in the UK, surveyed between November and December 2009. In stark contrast to earlier studies, the latest survey found that the recession has made employees more realistic, more likely to stay with the same company, more likely to work hard and to accept that their rewards should be judged on performance.

But the survey found that organisations have many frustrated employees who can see no opportunity for career advancement in the organisation. That suggests that while career development may be on the back burner, it’s still an aspiration for many employees. However, some of the actions companies took during the economic downturn, such as organisational restructuring, fewer tiers and the cancellation of training and development programmes, are likely to have reduced the options available during the upturn.

Priorities The downturn has changed employees’ priorities. Job security and workplace stability are now more important to most employees than career advancement.

Only 12% are currently ‘looking’ for another job and only 4% have made active plans to do anything about it. However, the latest CIPD quarterly employment outlook report suggests 22% are looking, although this is slightly down from the previous three surveys (25%). For 18-24 year olds (the “lost generation”) the figure rises dramatically to 43% of UK employees and, according to Towers Watson, this group are now more interested in career advancement opportunities, work life balance and flexible work hours. Enthusing the lost generation and giving them hope of a future at work through training, work placements, internships and apprenticeships should be a priority for all HR Directors and CEOs. While public sector employees are least likely to be actively looking for a new job currently, they are the group that ideally would most like to change jobs in the next year (42%). It wasn’t long ago that some surveys were predicting a mass exodus from the private to public sector. How times have changed!

Towers Watson reports that UK employees appear to be redefining “career advancement” – it’s more about acquisition of new skills and less about a traditional progression through the hierarchy of the organisation. 53% of employees define career advancement as being about acquiring new skills to do

kforce 2010

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Employee

their current job better and to make them eligible for other jobs. That’s especially important for two employee groups: first, the lost generation; and, second, those who have been employed in the same job for many years, sometimes decades. For both groups, seeking work is unfamiliar territory and demands a high degree of drive and self-belief.

Engagement

There’s been a big shift in employee mobility too. 50% of employees want to work for one company for life and most of the remainder no more than three.

PriceWaterhouseCoopers’ (PwC) 2009 survey of millennials at work (millennials are those who entered the workforce after 1st July 2000) has a similar finding – 75% believe they will have between two and five employers in a lifetime. However, millennials want the opportunity to experience overseas assignments – 80% would like to work abroad and 70% expect to use another language during their career. Maybe the expanding economies of Brazil, China, India and Russia will be their oyster.

Unsurprisingly, employees are conscious of the need to help their companies survive the recession and to achieve this 62% are willing to put in effort beyond what is normally expected. Such discretionary behaviour and effort is at the heart of employee engagement, so it will be interesting to see if this translates into higher engagement levels in the upturn. But, what’s been the impact of the downturn on employee engagement, about which so much has been written over the last 5 years? The latest CIPD quarterly employment outlook report provides some useful insights about “job satisfaction, attitudes towards management, and communication and advocacy”. Overall, job satisfaction now runs at a net score of 35, although the figures differ markedly by age groups. There has been a dramatic drop in job satisfaction among 18-24 year olds, from a score of 28 last quarter to just 5 this quarter. In contrast, 55+ year olds scored 54. Satisfaction is highest among the charity/voluntary sector (55) and sole traders (60) and lowest in medium and large businesses (more than 250 employees).

At the opposite end of the age spectrum, older employees seek job security and better pensions even more now than they did pre-recession. As life expectancy increases and pension deficits continue, this is unlikely to change significantly.

Employee attitudes towards their immediate manager continue to be generally positive and have changed little over the last 12 months. Employees are most likely to feel that managers always/usually treat them fairly (68%), are supportive if

Mobility

Such potential scenarios pose some intriguing questions: How will organisations maintain the morale of a new breed of c Ò ompany people ” who have nowhere to go?

What should organisations do to mitigate a potential brain-drain of talented employees who realize they are in short supply and want to / decide to jump ship for a better future when the economic recovery has been secured?

To what extent will employees in new, expanding sectors for example, green energy, digital and bio-technology, still feel this way towards one employer when a brighter future beckons?

What talent management strategies do organisations need to put in place to balance the globally-mobile few and the stay-put majority?

Will the tarnished reputations of some organisations make more talented people want to run their own businesses?

How should organisations respond to the aspirations of an aging workforce?

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they have a problem (62%) and listen if they have suggestions (61%). On the other hand, employees are most likely to say their manager never/rarely coaches them on the job (45%), discusses training needs (40%) or gives feedback about their performance (28%). If managers are to reconnect with many demoralized and demotivated employees, the latter three perceptions need to improve rapidly.

Performance management must ensure these are delivered.

Net satisfaction scores about employees’ perceptions of senior managers are much less positive, especially over consultation about important decisions (-28), trust in them (-1) and confidence in them (2). Again, this has changed little over the last 12 months. Perhaps the recession has reinforced rather than changed perceptions.

Employer advocacy, an oft quoted important aspect of engagement, appears to be on the decline. Employees are less likely (27) to recommend their organisation as an employer than last quarter (33) and they are increasingly unhappy with their opportunities for feeding back their views to senior managers. Are perceptions of the latter the root cause of the decline in advocacy? .

Building spirit and motivation 66% accept that their pay should be determined by personal performance.

That’s unsurprising, because most surveys which include a question about this issue find that. But that’s not the point.

The real issue is “how” should they be linked and that’s when trust and fairness in performance assessment rise to the fore.

This is why the Towers Watson study’s finding about what employees want from their leaders is particularly important.

Trustworthiness (71%), care about the well-being of others (62%), being highly visible to employees (56%) and encouraging the development of employees (50%) feature highly. For organisations that do a good job satisfying these “wants”, the future looks promising; for organisations that don’t, the future is less certain. When we look, in 2-3 years time, at organisations that win the “Employer of

Employee

Choice” accolade, we will find that they have delivered on these top employee priorities and “done best what matters most to employees”. It will be interesting to compare the lists of Best Companies to Work For in 2008 and 2012!

While we’ve seen and survived the worst of the economic crisis, there still remains one very real danger ahead, according to Scott Blanchard, Vice President of Client Relations for The Ken Blanchard Companies. That danger is complacency about meeting the motivational needs of employees. As Blanchard explains, “I think that there have been some organizations who felt that the recent lack of options for employees let them get away with less than great practices with their people. And so I think that people are at a pretty low level of trust and excitement with many of the organizations they are working for. So the challenge right now is for leaders to

build spirit and motivation, energy, commitment, and innovation in their organizations.”

· 78% plan to change their talent management strategies in the wake of the financial crisis

Changing the talent culture

The PwC report goes on to say “The scale of anticipated change suggests that for whatever reason, existing HR practices did not support the businesses when the crisis hit. The past year has demonstrated that many reward models are broken, CEOs did not have sufficient flexibility to redeploy talent when the crisis hit and that different skills will be needed to compete in the new landscape.” We will have to wait to see how the HR function in organisations responds to this challenge. S

According to the PwC 13th Annual Global CEO Survey of 1,198 business leaders from around the globe between September and November 2009, including 69 from the UK, the signs are encouraging. PwC believe success in 2010 will in part be dependent on how companies motivate, manage and reward their talent pool. They found that: · 42% of UK CEOs expect headcount numbers to increase in the next 12 months · 52% of CEOs plan to make significant changes to their staff morale/employee engagement programmes · 65% plan to increase investment in leadership and talent management

Raymond Robertson Director, Strategic Reward

Managing during the upturn: Top 5 tips 1. Communicate, positively, a picture of the future: tell all employees where the organisation is heading – its vision, goals and values – and the part employees can play in helping the organisation to succeed. Be open, send a compelling message and build trust.

2. Leadership development: define the behaviour and competencies that will help drive success in the new world. Develop leaders at all levels, from the top team to team managers. Give them the skills, tools, knowledge and confidence to manage a sceptical workforce that is seeking direction. Judge leaders by their behaviour and how it translates into business results.

3. Collaborative, energised, innovative culture: build a culture where teamwork and group cooperation counts and is recognised. Live by your organisation’s values. Implement a new reward model that balances individual, team, short term and long term elements. Look at what you can do to provide growth opportunities and give people the opportunity to rise to the challenge.

4. Customer service excellence: deliver excellence in everything you do for customers. Never forget they pay the bills. Hold customer days, involve your employees in them and introduce smarter ways of working with customers. Celebrate customer satisfaction success stories – they are infectious.

5. Stay energised: maintain momentum during what looks like a prolonged rather than a quick recovery. Employees will understand the challenges the organization faces. Keep them informed and listen to their concerns/ideas – through for example, roundtables and never take them for granted. Treat them fairly at all times.

Consultant, Visiting Lecturer, Guest Speaker and Author

Tel: 01425 612789; email: team@strategicreward.com Ray works with a wide range of organisations to develop and implement HR practices which drive employee engagement and business success. His clients include Manchester United, Whitbread, Siemens, ABB, Northumbrian Water, Porsche, Miller Insurance and Ralph Trustees, owners of one of the largest independent 4* and 5* luxury hotel groups in the UK. Ray is a visiting lecturer/guest speaker at several business schools and conferences.

He facilitates HR/Board away-days, in-company events, focus groups and workshops. He is the author of a major book The Together Company – Rewarding what matters most to people and organisations.

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Conference

The green end of a hard winter ICS annual conference 2010

IN ESSENCE THE RENAISSANCE WAS SIMPLY THE GREEN END OF CIVILIZATION’S HARDEST WINTERS.

The economy, predictably enough, was high on the agenda at this year's ICS conference. That didn't mean that it was depressing, with one exception, but it did make you wonder about the "green shoots" featured on the front of the delegate pack. The conference was entitled "a new beginning...the renaissance of customer serivce", and I think an important message was that customer service may be one way for organisations to weather the financial crisis and emerge stronger than ever. Interestingly the speakers focused on simple things rather than big splashy investments. Frankly I think that's good news—it has never been possible to buy your way to great service, though many organisations have been deluded by the claims of people with a product to sell.

Great service is usually cheap (often cheaper than dealing with the fallout from bad service) if you can figure out how to do it right.

a new beginning... ...the renaissance of customer service

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88% OF PEOPLE BELIEVE THAT THEIR BOARD SEES A LINK BETWEEN CUSTOMER SERVICE AND PROFIT.

Jo Causon—ICS Jo used her Chief Executive spot to position the ICS at the forefront of a "renaissance in customer service", starting with a need to demonstrate return on investment in the customer with the economic climate as it is.

Where is customer service today? Jo used figures from the January 2010 UKCSI (see last issue for more details) to argue that the recession has galvanised competition for footfall in retail, and other sectors, leading to a greater focus on the customer and gains in satisfaction. Jo also

reported on an ICS survey of members which found that 88% of people believe that their board sees a link between customer service and profit—people are at least saying the right things at board level.

What keeps chief execs awake at night?

From conversations Jo has had, she believes the main things are technology and the need to personalise service. I wonder to what extent these two things are complementary opposites? In other words, if we provide effective automated or self-service options, where appropriate, does that free up time for better personal service when it matters?

Where does the ICS fit into all this? Using research into member priorities last year (including focus groups moderated by yours truly) Jo has made some radical changes to the organisation in the past few months, restructuring the organisation to offer members a simpler route into ICS, improving communications, and positioning ICS as the place to go for information on customer service. Backing this up is a programme of literature reviews and research, including some new research aiming to prove the ROI of investing in customers.

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Roger Martin-Fagg—Economist Roger gave us his thoroughly depressing, though entertainingly and clearly explained, vision for the future of the UK economy, entitled "why a sustained recovery is highly unlikely and what the coming year will look like". I'll leave Roger's explanation of how we got into this mess to one side; even though he gave the clearest explanation that I've heard of the national economy, how credit relates to GDP, and why the extent to which banks are leveraged matters. His prognosis is that we are in for a seven year period during which "it will feel tough" for individuals and businesses, a period during which we will all have to get used to working from equity again.

What does that mean for customers and employees, I wonder? Roger didn't really touch on this, but I think it's likely to mean that employee satisfaction may suffer (though job security is likely to be more important than ever). Data from the UKCSI has so far shown an increase in satisfaction during the recession...but will that last? Even if suppliers realise that customer service is vital during tough times, they will need to achieve that service with fewer resources. One likely outcome is that consumer choice is reduced—not necessarily a bad thing.

Julie Southern—Virgin Atlantic Julie talked us through the way Virgin Atlantic coped with 2009—a traumatic year for the airline industry. She summarised the industry as consisting of a mix of perenially hopeless, state-supported, airlines with a scattering of profitable ones, and asserted "never has an industry existed which has routinely destroyed so much shareholder money."

A large part of the painful process Virgin Atlantic had to go through was losing a lot of staff (from 9,000 at the beginning of 2009 down to 7,500). Interestingly, they started this process at a time when revenues were ok, but they knew trouble was on the horizon. This meant they were in the difficult position of dealing with redundancies whilst announcing profits and

even paying bonuses. They knew that the future of the business depended on keeping the cash position healthy, but they also had to look after staff morale and, of course, the brand.

The new concept that Virgin Atlantic is pinning its sales on is "discounted decadence", in other words "it's okay to treat yourself, because you know it's fantastic value". Fundamentally, though, despite an investment in new planes, Julie sees the key differentiator for the Virgin brand as its people. In the interview which followed her talk, Chris Daffy asked Julie how they "hire for attitude"—something which is often easier in theory than in practice. The answer, in Virgin Atlantic's case, is a mixture of formal psychometric methods (I'd be interested to know which ones— there's a lot of pseudoscience in this field) and informal methods based on analysing

load (does the work go away just because you've made redundancies?) and a long hours culture. Lynne quotes stats showing that we work 46% longer hours than EU countries, and we're 27% LESS productive because of it. Long hours is "the only addiction we reward", and one that has a direct correlation to illness. It also leads to reduced innovation and efficiency as well as poor service. Ultimately, Lynne argues, the price is increased absenteeism which means increased costs, leading either to cuts in service or another round of downsizing—a potential death spiral.

So what's the future? Lynne hopes that the pendulum is swinging towards a focus on people—flexible working, worklife balance and so on. The goal is an "engaging culture", which has the same four dimensions as the performance culture, but a different starting point.

Engaging Culture

PEOPLE

QUALITY

the background of stars (e.g. apparently people from divorced parents are better at customer service).

RESULTS

PRODUCTIVITY

Start with a compelling vision, then ask yourself what kind of people you need.

Following that, some of the essentials for creating an engaging culture:

Lynne Copp—The Worklife Company Lynne started with a simple question— why do people dread coming to work on a Monday morning? She took the platitude that most people come to work to do a good job, and turned it into a subtle and insightful point—people's work ethic, like any other characteristic, is normally distributed. Managers spend up to 85% of their time on the bottom 3% of that distribution (what we might call the actively disengaged). The big question is whether we set up our organisational cultures to manage the 97% or the 3%.

The current paradigm, Lynne argues, is "performance culture"—managers' job is to stare at numbers all day. People are referred to as "headcount" or even, at one organisation, WCRTs—"walking cost reduction targets". Companies want more for less, which results in increased work-

· External focus · Innovation and collaboration · Play to strengths (focusing on weaknesses just makes everyone average) · Flexible mindset—what are you doing to keep yourself ahead?

The payoff is that 75% of current processes are waste. As Lynne puts it, "imagine if you had 75% of your time back. Imagine if you had a third!"

Steve Settle & Jo Tomb—Toyota Of the first day's breakout sessions I chose to attend the one by Toyota, who threw out their original talk ("From measurement to action") and tackled their recent recall crisis instead. It was an interesting use of an existing platform as part of a strategy of tackling a difficult situation, in which the company clearly feels it has been unfairly treated.

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Ashridge Business School

WHAT HAPPENED IN THE US WAS COMING THROUGH THE PRESS QUICKER THAN THROUGH THE COMPANY. Steve began by outlining what lay behind the recall—in a handful of cases (20 reported across the whole of Europe) the accelerator pedal could stick. He also wanted to place this in context—in the last 2 years there have been 300 safety recalls in the UK, of which Toyota have had 4. He encouraged us to have a look at the VOSA site to understand the severity of some of the others by comparison. The unspoken point? This was a press-fueled storm in a teacup. He went on to say that the Pius recall was not for safety reasons, in fact VOSA refused to allow Toyota to register it as a safety recall, but just that the braking system "felt funny" to some drivers under some circumstances.

According to Steve the most accurate reporting during the crisis was in the Sun. The impact of the press on their business was very tangible—the day after the most alarmist headline in the Daily Mail ("Don't drive your Toyota") call volumes rose from an average of 700 to 14,000.

Interestingly, the impact on staff morale seems to have been basically positive— pulling together in the face of a crisis.

During the crisis everyone worked weekends, extended opening hours, and all hands manned the phones. The network was challenged to handle 6,000 repairs a day, wihle Toyota had to source 50,000 parts (in three different sizes) in three days and train 1,200 technicians in making the repair in the right way.

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For my second breakout session, I chose the session by Ashridge Business School discussing their research for ICS into the return on investment in customer service.

They had little to say so far—this was more of a launch than a presentation of findings—but this is definitely a programme to watch. Having completed a literature search to build a theoretical model and a survey, they plan to move on to detailed case studies. Head to the ICS website to find out more.

Usefully, and unusually, their conceptual model starts with what they call "activities" rather than "drivers"—in other words they want to be able to quantify the impact of things that organisations DO, rather than the impact of outcomes such as satisfaction.

Her talk was littered with gems, some of which you can see above, but perhaps my favourite was "I don't think you ever stop selling to a customer"—you have to work constantly to understand their needs, have the courage to sit down with them when things go wrong and talk about it. S

I DON’T THINK YOU EVER STOP SELLING TO A CUSTOMER.

The ROI of Service?

ACTIVITIES

DRIVERS

RETURN

Liz Jackson—Great Guns Marketing You might recognise Liz's name from her appearance on The Secret Millionaire. Liz shared her life story, starting with 1 GCSE in Drama. Discovering that, though she might be rubbish at spelling and grammar, she was great on the phone Liz went on to found Great Guns Marketing in 1998. Her advice for personal success? There's no such thing as luck. Don't be the nearly man or woman ("last year I nearly sailed around the world"). If you think you can, or you think you can't, you're right! What about running a business?

"SMART goals are absolute pants."

"You don't learn anything from success."

"There's no such thing as a perfect person, but there is a perfect team."

"When you recruit people who are better than you it can make you feel inadequate."

www.stakeholdermagazine.com

Stephen Hampshire Client Manager The Leadership Factor Stephen manages customer and employee surveys for RBS, NatWest, Visa and Pace amongst others. He also presents training courses on employee surveys, customer surveys and data analysis.

stephenhampshire@leadershipfactor.com

Case Study

En li gh tened

Management ge ts r e su l ts When Clive Hutchinson bought Cougar Automation 8 years ago, the company was in trouble. Six months after he took over, they posted a substantial loss. Clive started addressing the issues step by step and once the financial situation was sorted he focused on customer service. From 2003 to 2009 turnover has increased by 168% and profit by 245%. When Cougar entered The UK customer experience award in 2004, 80% of the entrants were better than Cougar. A year later they won their category.

Improving customer service

Enlightened people management

What had happened in that year? No customer service initiative, no change management programme, no extensive customer service training, but many small concrete actions. The senior management team launched the focus on customer excellence at their Annual Company Day and overnight put up posters in the company, so when people walked in the next day something had visibly changed. Clive and his leadership team constantly talked about customer service and when making decisions asked “Does this deliver customer excellence?” All customer feedback is shared with all employees and so is financial information. Cougar organised internal training to help staff to understand and interpret customer survey data and financial information. “When the assessors for the customer service excellence award came to visit Cougar, every one of the 56 employees was encouraged to talk to them freely and give any information they felt appropriate. The assessors were impressed with the access to information that staff had.” says Clive.

Parallel to the focus on customer excellence Clive introduced some radical people management concepts into the company. People are encouraged to play to their strengths using Marcus Buckingham’s strengths inventory and strengths based recruitment. Cougar has no annual appraisal but a development review which involves no judging or measuring of past performance as that is covered throughout the year by customer feedback. The conversation invites the employee to identify what drags them down and actions to reduce this; what they enjoyed and how they can do more of that. It is the employee’s responsibility to re-organise their work so that they play more to their strengths.

These re-organisations happen mostly within the project teams. People have total flexibility when and where they work and decisions are made at the most appropriate level. Clive for example does not get

involved with customers as that is the role of Cougar’s sales people and project managers while he sees his role as the “guardian and architect of the philosophy and structure of Cougar”.

Ensuring performance In Clive’s experience people’s performance varies in the short term mainly due to external circumstances outside of their control but is consistent over a longer period of time. When things go wrong, people make mistakes or don’t perform to the required standard, the question asked first at Cougar is “Are they playing to their strengths?” and help is offered to explore how they could operate differently, rearrange their work or find a partner to learn from.

Employees can choose a sponsor that supports them in their development.

People who have not performed have tended to leave of their own accord because they did not want to let their col-

“If people love what they do, they like coming to work and will give their best”

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Case Study

Uta Langley, founder of 2 the point training, is an experienced trainer, facilitator and coach and has been working with groups for over 20 years. She has a record of success in initiating and carrying through a wide range of change management and management development projects involving all levels within an organisation. Uta has a background in international sales and marketing and has been working with a wide range of individuals and businesses from owner/managers of small businesses to senior executives in blue chip companies and public bodies.

Uta is also tutoring the Women into Enterprise course at the University of Bath.

leagues or customers down. Cougar does have a disciplinary process, but it isn’t used often. Absenteeism or negative morale are not issues at Cougar. “If people love what they do, they like coming to work and will give their best” is Clive’s experience.

Management and Leadership Four out of the six senior leaders are elected at Cougar, an idea taken up after two members of staff saw a speaker from WL Gore. Team members can select the project team they want to work on, if there is requirement for their contribution.

Cougar’s philosophy changed from “Selldeliver-collect” to a vision of “10/10 for customer service; Happy cats (the name for cougar staff) and Zero waste” and can be communicated in one picture. New regional offices are opened when members of staff present a business plan to the board and show that they have researched the area and are prepared to take a personal risk by for example moving into the area. They then need to find people who want to work for them either internally or externally. Decisions in their office are up to them.

Does it work then this enlightened management?

Cougar has won customer service awards in 2005, 2007, 2009 and was among The Sunday Times best 100 SMEs to work for in 2009.

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In employee surveys employees say that: Colleagues go out of the way to help

(87%)

Managers share important information

(80%)

Employees feel happy with the balance of work and home life

(79%)

Staff are happy with pay and benefits

(73%)

Hutchinson runs Cougar Automation on sound moral principles

(80%)

Staff love their jobs

(80%)

From 2003 to 2009 turnover has increased by 168% and profit by 245%. Customers rating Cougar’s work 7 and over have increased in that period from 37.5% to 95.7% and Customers rating Cougar’s work 9 and over from 0% to 63%.

Could you do it in your company?

Cougar so far has been the only company I have encountered that has implemented some well researched but still radical principles on people management. “When I go to networking events, I am the alien” says Clive. We would love to support other businesses putting these principles into practice. If you run a company or division and can influence strategy and people management, if you are successful but your people could be happier, or if the recession has left your company in a weak position and you would like to implement some of these principles – give us a call.

www.stakeholdermagazine.com

Are you doing it already?

We are also interested to hear from other leaders who implement some of these principles in their business to organise a get together to share ideas and inspiration. Please get in touch with either Uta or Clive. S

FREE For a FREE report on how to implement some of these principles, please e-mail uta.langley@2thepointtraining.co.uk and put Enlightened Management in the subject line.

Clive Hutchinson has been interviewed by Uta Langley from 2 the point training.

Uta Langley, www.2thepointtraining.co.uk ; Clive Hutchinson, www.cougar-automation.com

Research

Sarah Stainthorpe Research Manager: The Leadership Factor

Sarah specialises in using data mining to provide customer insight to Direct Line, Churchill and RBS amongst others.

email: sarahstainthorpe@leadershipfactor.com

In the last edition of Stakeholder Satisfaction we discussed the pros and cons of different survey methods. In this article, we will go into more detail about some of the latest self-completion methods, which we had said were useful for conducting transactional customer experience research in particular.

The three types of self-completion survey method we are going to cover here are: · IVR (Interactive Voice Response) · Text · Point of sale With IVR surveys, there are two main ways of administering the survey. Firstly, customers can be given a freefone telephone number to call where they connect

to the survey and answer pre-recorded questions, using the buttons on their phone or speaking. This telephone number can be given to customers on a one-to-one basis, for example sent through the post to them or at a face to face point of sale, such as on a till receipt.

Alternatively, the survey telephone number can be publicised en masse, for example, on a company’s website. The second way of administering an IVR survey is to trans-

fer customers to the survey from the call centre after they have called your company. If this happens the customer would not have to pay for the cost of the survey call.

This second way also has different options as to how the customers’ call can be transferred to the survey.

The most straightforward option is that customers are manually transferred to the survey after their call. This is done by the member of

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Research

staff who has been speaking to the customer, who first needs to ask if they are happy to take part in the survey. However, one obvious problem with this option is that the staff member could choose not to ask certain customers to take part, for example if they felt that the customer was not happy and may give a poor score. Transfer rates by staff member can be monitored though, allowing you to see if certain staff members were transferring fewer customers to the survey than others. It should be noted that staff selecting the respondents does encourage ‘buy in’ from staff as it is difficult for them to challenge the results when they themselves have selected the respondents.

To overcome the problem of ‘cherry picking’, rather than manual transfer by the staff member the customer can be asked if they would like to take part in the survey before the call, via a pre-recorded message before their call is connected to a staff member. If the customer has indicated that they would like to take part, they are told to hold the line once they have spoken to the staff member. However, the problem here is that customers may forget to do so. An alternative option is that instead of holding the line at the end of the call, the customer is offered a call back facility if they want to take part in the survey. They are then called back and automatically connected to the pre-recorded survey.

With text message surveys, customers are sent survey questions via text message to their mobile phone. Questions can be closed, or open-ended to obtain comments. One question is asked per text and as with other surveys, questions can be routed so that the customer gets asked different questions, depending on the responses they have given. As an alternative to sending out specific survey questions, like with the IVR option, a text message number can be advertised, inviting open-ended feedback from customers, for example at an event.

Point of sale surveys capture customer feedback at the point of sale where the customer interaction is face to face.

Customers access the survey at kiosks and fill in the survey immediately after the interaction they have experienced.

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The advantages of these survey methods outlined are...

The disadvantages of these survey methods are ...

3 Real-time reporting is usually available.

2 There is a fairly limited number of questions compared to other self-completion methods such as postal and email surveys. The surveys really need to be restricted to a duration of a couple of minutes. IVR surveys should be no more than ten questions and text surveys should have a maximum of five questions. However, there is the opportunity to rotate the questions asked to cover a wider number of questions across the survey.

3 The experience is still fresh in the customer’s mind, particularly for point of sale and IVR surveys where the customer is transferred straight from their call to the call centre.

3 These type of surveys tend to be cost effective, particularly to obtain enough surveys to measure individual staff member performance.

3 You don’t need to have a customer database, customer feedback can be captured face to face at the point of sale, or a text message number or IVR survey telephone number can be advertised. In this way, IVR could in fact just be used as a means of allowing customers to register their interest in taking part in research, such as a telephone survey or focus group.

3 Good for engaging staff and motivating them to understand what customers think of their organisation and specifically to understand their ‘own’ customers’ satisfaction, as the lower cost allows for results at an individual staff member level. As IVR provides ‘vox pops’ or ‘sound bites’ from real customers, it is a useful tool for ‘bringing the customer to life’ for staff.

3 Useful to measure the incidence of certain actions or staff behaviours that have been identified as having a positive impact on customers’ satisfaction.

For example, the survey could ask whether the staff member had offered to pack the customer’s shopping for them at a supermarket. This type of measure was often traditionally tracked by mystery shopping, but is obviously more credible if the findings are from real customers.

3 Good for getting customer feedback from people without internet access.

3 These surveys are often completely anonymous.

www.stakeholdermagazine.com

2 To measure the true end to end customer experience the surveys that take place at the point of interaction, or immediately afterwards, may be too soon to measure customers’ true satisfaction.

For example, at point of sale, the customer has not yet got the product home to see if they are happy with it and that it does meet the requirements outlined by the member of staff. The customer hasn’t yet found out whether the promises staff made were kept or the advice given by staff was correct.

2 Text message surveys are limited to people who have mobile phones and use text messaging which may limit input from the older generation.

2 Text surveys cost the customer to send responses, but as many people are on packaged deals with a certain number of free texts, this should not affect too many people.

These survey methods often represent a trade off, where greater volumes of response are gained at the expense of reduced quality and depth of information, and therefore understanding. One of the main benefits of these methods is the lower cost allowing for greater volumes to obtain individual staff member results. They are perhaps therefore often functioning more as a staff engagement tool than a replacement for statistical customer experience measurement. The ‘vox pops’ captured can also be relayed back to employees to bring customer feedback to life, further boosting employee engagement. S

Book Review

Cannongate Books, £12.95

Drive: The Surprising Truth about what motivates us Daniel H Pink

Motivating people

FORGET EVERYTHING YOU THOUGHT YOU KNEW ABOUT MOTIVATING PEOPLE - AT WORK, AT SCHOOL, AT HOME. IT’S WRONG. These are the first words you will read on the inside front cover of the latest offering from Dan Pink, author of ‘A Whole New Mind’. Since managers striving to improve customer satisfaction and loyalty are constantly trying to motivate employees to keep promises and commitments, to go the extra mile to help customers, understand customers, keep them informed, take ownership, solve the problem etc etc, it’s very relevant to anyone in a customer management role. Have they been doing it wrong for all these years? Let’s find out.

Intrinsic or extrinsic rewards?

The Leadership Factor Client Conference was closed by Richard Kimber who wondered whether there’s a disconnect between ‘what science knows’ and ‘what business does’. Richard pointed out that most organisations still attempt to motivate most employees using traditional ‘carrot and stick’, ‘if – then’ rewards; basically extrinsic reward systems, but if they switched to an intrinsic, self-motivated mind-set could it revolutionise their ability to deliver great customer service?

Pink lists seven problems of traditional carrot and stick motivation systems:

· · · · ·

They can extinguish intrinsic motivation They can diminish performance They can crush creativity They can crowd out good behaviour They can encourage cheating, shortcuts and unethical behaviour · They can become addictive · They can foster short term thinking.

Continuing in challenging vein, Richard suggested that management is unnatural, leadership is natural. Putting people in an unnatural management situation therefore creates inter-personal tensions, resulting in most employees who leave their job actually leaving their boss rather than leaving their company. Extrinsic rewards only work with a narrow range of repetitive tasks such as piece-work or traditional product line manufacturing.

In “Drive: the surprising truth about what motivates us”, Dan Pink highlights three key human attributes that make most of us more intrinsically motivated: Autonomy Most of us want to direct our own lives, to be in control of what we do and how we decide to do it. A significant cause of stress is said to be ‘role conflict’, where people are forced into situations, tasks or roles that are outside their comfort zone or alien to their personality and beliefs. This is exacerbated if they have make no-win choices between conflicting roles e.g. a boss who wants them to work long hours and a partner that wants them to come home early to help with young children.

‘mastery’, whether it’s playing a musical instrument or being the best brick layer on a building site. It makes them feel good.

Purpose People also feel good about spending their time doing something that’s important, useful or beneficial in some way.

Autonomy Mastery This is the urge to be really good at something. People are always proud of

Organisations and managers often grapple with the trade-off between autonomy

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and control. Pink is convinced they err far too much towards the latter, so trying to take some steps towards more autonomy for employees would be a positive move.

Pink suggests several practical ideas such as…

Encourage peer-to-peer rewards Introduce a budget where employees can award a small monetary bonus or prize to colleagues for going the extra mile to benefit customers.

Conduct an autonomy audit Do a really quick survey asking your department or team to score four simple questions on a 10-point scale (where 1 means ‘hardly any’ and 10 means ‘a huge amount’) asking employees how much autonomy they have over: Your tasks at work – what you do on a given day Your time at work – how you allocate your time each day Your team at work – to what extent you can choose the people you collaborate with on tasks Your technique at work – how you perform your tasks Introduce DIY report cards Ask your team members to specify their top objectives at the beginning of each month. At the end of the month ask them to score themselves on the extent to which they have achieved their objectives.

If not why not and what they plan to do differently next month. Have monthly oneto-ones with team members where the employee’s and the manager’s report cards for the employee are compared and discussed.

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Stakeholder May 2010

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Mastery If Pink is correct, mastery has major implications for maximising employee engagement. One implication is that organisations should trust people to do their jobs how the employee thinks best.

This is ‘autonomy’, and Pink splits it into four elements, the 4 Ts: Task = what Time = when Team = with whom Technique = how.

Fedex gives employees one day per month when they can do whatever they want, but they have to make a presentation about it the next day. Other companies have copied this idea, sometimes with fantastic results. Google got Gmail out of a ‘Fedex day’. Other companies let employees organise themselves into project teams or replace production lines by manufacturing cells where teams of employees carry out a much bigger part of the manufacturing process, organising themselves in their own way.

ment culture. If Pink is correct, employee engagement will not be improved by management implementing a series of measures to ‘make’ employees more engaged, but by liberating employees to manage themselves and consequently become more engaged as a by-product.

Employee surveys One good starting point is to include autonomy, mastery and purpose questions on your employee survey and in all employee appraisals, personal reviews or one-to-ones. Autonomy questions can easily be split into the 4 Ts. Typical questions that relate to mastery include being proud of your job, being proud of the organisation you work for, having the right skills for the job, having the right tools / equipment for the job, having sufficient training for the job. Purpose can be covered by questions such as understanding the purpose / mission of the company, doing worthwhile work, how you / your job helps the organisation to achieve its objectives, how the company or its products / services benefit society. S

Richard Kimber Richard is Client Manager at The Leadership Factor, working with companies such as VW / Audi, Co-op Business Banking, Xerox, Hilti, Principality Building Society and Lombard Vehicle Management.

The bigger implication for organisations striving to improve employee engagement is whether they seek to do it through an intrinsic or extrinsic reward and manage-

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Richard can be contacted on 01484 517575 or email: richardkimber@leadershipfactor.com

Half day Briefing

Co-creation

Delivering the customer experience the customer wants £155

(excluding VAT)

Tuesday 12th October 2010 9:30am - 12:30pm Central London: Gloucester Road Tube Station

Coffee and Registration Part 1: “With customers, not at customers” · An overview of co-creation and what it has to offer any organisation.

Discussion/workshop on how we could start using co-creation

Discussion/workshop on achieving a culture that delivers Part 3: "Co-creating complaints" · Why the lessons of co-creation are even more important at moments of truth, and how to take advantage of that.

Part 2: “Co-creation & culture” · Co-creation only works when you have good, engaged staff...but culture is about boards as well as the coalface - what are the links?

For more information or to book your place visit:

www.leadershipfactor.com/training For a detailed agenda please contact Sandra on 01484 467000 or email sandrabeever@leadershipfactor.com The Leadership Factor Taylor Hill Mill Huddersfield HD4 6JA

Tel: 01484 517575 Fax: 01484 517676

Web site: www.leadershipfactor.com