Creating value for customers, employees and shareholders
HULL FC Listening to Fans
UKCSI | CASE STUDIES | ECEW CONFERENCE EMPLOYEE ENGAGEMENT | TALENT MANAGEMENT
COMPANIES IN THIS ISSUE Hull FC Microsoft Nationwide EAL O2 Zappos Barclays Pizza Express
October 2010 £4.50
How do you
improve your customers’ complaint experience? USE A COMPLAINT EXPERIENCE SURVEY FROM
T H E L E A D E R S H I P FA C T O R The complaint process is a key moment of truth for customers of any organisation. When the complaint experience is managed well and customers are satisfied (sometimes more satisfied than if they’d never had a problem), customers stay and recommend you. Complaint processes that are not very good lead to a poor complaint experience and customers that are extremely dissatisfied and vocal about their poor experience. For more information about how you cost effectively measure your complaints experience to get actionable data and improve customers’ complaint experience
01484 467014 or email stephenhampshire@leadershipfactor.com
call Stephen Hampshire on
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We’re happy to email you a ballpark cost and ove rview of the proce ss fo your compa r ny.
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YourSayPays
Results showing people’s use of social media and what do us Brits think of France?.
October 2010 21 Case Study EAL - a customer satisfaction success story.
8 Case Study Hull FC, using results to engage their fans in all aspects of the club.
25 Employee Employee engagement updated research findings.
12 Customer
29 Employee
UKCSI - The national measure of customer satisfaction.
Talent management has rarely been more critical to business success.
17 Conference
34 Latest thinking
The key topics and discussions from the ECEW Conference.
Customer service leadership in tough times.
In this issue...
VOLUME 7 ISSUE 3
38 Book Review Authenticity What customers really want.
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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
In this edition of Stakeholder Satisfaction, there are some very interesting facts that demonstrate why organisations should be taking social media much more seriously than many do at the moment. Supporting this assertion at the European Customer Experience World conference (see page 18), Moira Clark from the Henley Centre pointed out that 1 in 8 couples in the USA now meet online, that LinkedIN is used by a large and growing percentage of employees and employers for career advancement and recruiting purposes and that if Facebook was a country it would have the fourth largest population in the world! Which might explain why employees spend so much of their employer’s time at work using it! A web survey of a representative sample of 1,000 UK adults, conducted by YourSayPays for MyJobGroup.co.uk (see page 6), revealed that 55% of employees spend some time every day using social networking sites at work. 16% spend over 30 minutes and 2.3% devote over two hours of their employer’s time every day to using social networking sites. And
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
they’re not very keen on their employer knowing what they’re saying on there. Over 80% thought that their employer should not be allowed to look at their social media postings or use them in any formal workplace
Designer:
Rob Ward
Creative Director: Rob Egan
meeting such as a disciplinary hearing. Advertising:
Charlotte Ratcliffe
Hardly surprising since Stakeholder Satisfaction’s employee engagement survey (page 25) has revealed that the proportion of disengaged employees has risen during the recession from 18% to 21% of the workforce. Combine this trend with the growing usage of social media sites and there’s probably much more negative word-of-mouth proliferating on the internet about most organisations. Do they seem concerned? Not in the slightest. According to the YourSayPays survey, only 16% of employees stated that their employer has a policy about employees’ use of social networking sites at work. Embracing all channels of communication hasn’t been a problem for Hull FC. Contrary to some people’s image of northern flat cap rugby league, Hull FC uses all possible media to encourage two-way communication with its fans. And they’ve taken a lot of other enlightened steps to improve the customer experience. Go to page 9 to find out. Best wishes Nigel Hill
Printers of Stakeholder Satisfaction www.stakeholdermagazine.com info@stakeholdermagazine.com Stakeholder Satisfaction PO BOX 1426 Huddersfield HD1 9AW Tel: 0845 293 9480 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
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October 2010 Stakeholder
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YourSayPays
Social Networking
Results Social Networking
Chart 1: Negative word of mouth
In April 2010 YourSayPays conducted a survey into people’s use of social media on behalf of MyJobGroup.co.uk. The web survey involved a representative sample of 1,000 UK adults from the YourSayPays panel. Some of the information that has emerged from this survey is very relevant to the employee engagement article on page 25 and although it is true that not everyone uses social media websites, most young people and many older people now use Facebook and / or Twitter, and a significant percentage of employees of all ages use business networking sites such as Linkedin.
Yes, I have been very negative about my workplace on a social network I don't use social networking sites Yes, I have talked negatively about my workplace but it was implied and not openly critical Yes, I have been slightly negative about my workplace on a social network No, I have never talked negatively about my workplace on a social network 0 50% Chart 2: Lost productivity
100%
Over 2 hours Over an hour to 2 hours 31 to 60 minutes 11 to 30 minutes
As we can see in Chart 1, over 30% of employees say they have spoken negatively about their employer to a greater or lesser extent.
Up to 10 minutes No time/I don't use social networking sites 0 20% 40% 60% Chart 3: Company policy on use of networking sites No they do not have a policy regarding social media
In Chart 2 a staggering 55% of employees spend some time at work each day using social networking sites. 16% spend over 30 minutes every day and an amazing 2.3% over two hours on a daily basis, although only 10.5% of respondents claimed to be less productive as a result. In view of the potentially high costs to organisations in terms of lost productivity and reputation damage you would think that they would be making considerable efforts to control employees’ use of social networking sites at work, but this doesn’t seem to be the case. As shown in Chart 3, only 16% of employees say that their employer has a policy about use of social networking sites at work. Whilst it’s true that only 13.8% stated that their employer definitely does not have a policy and 70.2% that they didn’t know, there’s obviously little point having a policy if your staff are oblivious of it!
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Yes, they do have a policy regarding social media No, I don't know if they have a policy regarding social media 0 50% Chart 4: Control of social networking use
100%
Employees should have freedom to use these sites at their discretion without being monitored Employees should be barred from using social network sites at all times whilst at work Employees should be able to use them, but use should be limited e.g. at lunch times
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0
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Chart 5: Can you trust social media profiles ? Strongly disagree Disagree Agree Strongly Agree 0%
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YourSayPays
A very telling statistic in Chart 4 is that less than 14% of employees think they should be free to use social networking sites at work without any control. The majority (54.7%) thank that they should be allowed to go on the sites at work but in their own time, e.g. at lunchtime, but almost one third of employees (31.6%) stated that companies should completely ban the use of social networking sites from the workplace. A much more general point that emerges from the YourSayPays survey on social networking sites is whether they serve any purpose for the reader, or just the writer. According to most of the respondents you can’t believe a word people write on there! As shown in Chart 5, virtually two thirds of people don’t think employers could get an accurate picture of an employee by their social networking profile. So who can get an accurate picture? Can your parents? Can your friends? If friends can, but employers and parents can’t, how can that be possible? You can’t be two different people. If your profile for friends is truthful it must also be truthful for employers (even if you don’t want them to know it), or perhaps it’s just not truthful at all but is how the author wants to be seen rather than how they are? Whether it’s truthful or not, people certainly don’t want their employer judging them by their social networking profile. As shown in Chart 6, an overwhelming 82.2% were against this idea. Very similar percentages also thought that potential employers should not be allowed to look at your personal profile and that they should not be allowed to use it in any formal workplace meeting, e.g. an appraisal or disciplinary meeting.
What do us Brits think of France? The short answer seems to be not much, especially if we’ve not been there within the last five years! Based on a YourSayPays survey of almost 3,000 adults for Brittany Ferries, the best that can be said about France is that it’s quite easy to get to! Chart 7 also shows that people have much more favourable views if they’ve visited France recently especially concerning its family friendliness,
cuisine and accommodation, but even if they have visited they still don’t have a very favourable view about France’s value for money or about the friendliness of the French people. What’s certainly clear is that the average Brit doesn’t seem to have learned much more about France’s geography at school than they did about its language! Chart 8 shows that the percentage who could correctly identify the various regions of France on a map was shamefully low! S Chart 6: Employers should not judge you
Strongly disagree Disagree Agree Strongly Agree 0%
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Chart 7: The Brits’ perceptions of France Has people that welcome you to their country Is a holiday destination that is very easy to get to Has a great choice of holiday accommodation Is a camping holiday destination Is a ski holiday destination Is a value for money holiday destination Has great cuisine I’d like to eat Is a family friendly holiday destination Is a romantic holiday destination for couples 0
5 Not visited France
10
Visited France within the last five years
Chart 8: The Brits’ knowledge of French geography Midi Pyrenees: Loire Valley: Dordogne: Vendee: Poitou Charentes: Normandy: Aquitaine: Western Loire: Brittany: 0%
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Case Study
Manchester United and Manchester City, Liverpool and Everton, even Rangers and Celtic, no local rivalry is as fierce as Hull FC and Hull KR. That’s because in these parts Rugby League is in the blood. Until a couple of years ago, Hull was the only major city in Europe never to have had a top division football team but in rugby the city’s hardly ever been out of the top flight and has usually boasted two teams up there. You can even see that in the name of the club – Hull FC. Unlike virtually every other UK football club, Hull City has to be content with Hull AFC (Association Football Club).
Broken time HULL FC is in fact one of the oldest clubs in the League and was formed by a group of ex-public schoolboys from York in 1865. In 1895, the club was one of the first to desert Rugby Union following one of the greatest rows in British sporting history. The dispute was officially about "broken-time", which was fundamentally a row between representatives of the northern working classes and the southern leisured classes and their diverging opinions on the emphasis that should be placed on the competitive and recreational elements in the sport. In the 1890s, the average wage for a northern mill worker or miner was 26 shillings for a five and a half day working week based on 12 hour shifts. Travelling to a game often meant losing a shift and
consequent financial hardship for the predominately working class members of the northern teams. The southern players were drawn mainly from university and public school backgrounds, so they could comfortably withstand the costs of playing. For some years it had been alleged that certain northern clubs had been making "broken-time" payments and when the RFU consistently refused to legitimise this loss of earnings compensation, a group of northern clubs decided to hold a special general meeting on 29th August 1895 at the George Hotel, Huddersfield. Twenty of the twenty-one clubs in attendance voted to break away from the RFU and form a new organisation called the Northern Rugby Football Union. As well as Hull, founder members included Wigan, St. Helens, Leeds, Bradford, Huddersfield and other stalwarts of the future sport of rugby league.
Professionalism The Northern Union game rapidly professionalised and Hull prospered. In 1913 they paid a world record £600 transfer fee, plus an astounding £14 per match, for three-quarter Billy Batten. In the ‘20s and ‘30s Hull experienced mixed fortunes, but a very special event took place on September 26th, 1936. It was a game at the Boulevard against Wigan, which Hull dramatically won 13-12 – very much against the run of form. So thrilled were the Hull fans by the result that they began to sing a cowboy song, “Old Faithful”, which had topped the charts. The song stuck, the fans loved it and it soon became the club anthem. In these days of copy-cat chants in professional sport, Old Faithful stands out as one of the few unique songs on the terraces. Hull FC played at the Boulevard for 107 years and moved to their new home at the £44m state-of-the-art Kingston Communications Stadium in January 2003. By then much water had flowed under the Humber Bridge. The Super League had formed, Sky was heavily
Nigel Hill Founder of The Leadership Factor and editor of Stakeholder Satisfaction.
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Case Study
involved and antipodean players had permeated the clubs. The first sport that paid its players really was becoming professional now. Yet its image, especially outside the north of England remained one of flat caps, brawny blokes, Eddie Wareing and ‘oop and unders’. As a northerner but a lifelong devotee of the round ball game, I was inclined to agree. How wrong I was! Having seen inside Hull FC, having seen how the club, how the business is run and how they treat their fans, I think most big name sports clubs and many blue chip companies could learn a lot about customer-focus and implementing Service-Profit Chain principles if they spent a few days with a Hull FC Director.
Fan feedback In 2009 the club asked The Leadership Factor to conduct its first formal fan survey. It wanted to understand how the fans perceived the club and, above all, how it could involve them more, address their concerns and deliver what they wanted. Two way communication was the main priority for improvement that came out of the survey. Although fans felt that the club was better at communicating information outwards than it was at proactively listening to the things fans wanted to say, both could be much better. This prompted the club to introduce a raft of innovative measures to address the fans’ concerns on this subject.
Airlie Night This is a popular phone-in programme on KCFM Radio that goes out every Wednesday at 7pm. Every alternate Wednesday from 7pm to 8pm, CEO, James Rule is in the studio to respond live on air to fans’ points.
“Tell us” For some people, picking up the phone and talking to a Director may be intimidating. If so they can use the “Tell us” email channel. It’s certainly a popular one with over 1,000 emails in the first year. As well as the subjects above, some of the emails can be quite emotional (perhaps it’s easier to let off steam in an email than a phone call to a Director), others may just be a simple thank you for a great family day out at the last home game. Either way, fans get an immediate acknowledgement followed by a personal response from a Director within 48 hours. For people without email there’s a 24/7 “Fans Line” which they can call and leave a message at any time to make their point.
Fans’ Forum The club had already introduced an annual Fans’ Forum but following the survey the
fans’ appetite for involvement with the club was so apparent that it was decided to increase the meeting to three times a year – one pre-season, one mid-season and one at the end of the season. At many professional sports clubs, the Fans’ Forum has the reputation of being orchestrated by the club, both in terms of agenda setting and membership. Not at Hull FC. Instead of a small committee of a dozen or so, anyone can attend the Hull FC Fans’ Forum. And they do, with average attendance running at over 400. Also, to give fans the maximum opportunity to participate, two of the forums are held at the stadium but the third moves into the city centre at the Hull Truck theatre. And if you still can’t attend, no problem. The event is broadcast live on KCFM radio and on the Hull FC website (where a podcast can also be downloaded later). There’s a roving mic at the event enabling anyone to ask any question or make any point they wish.
Call a Director FC Voices 26 times a year, every alternate Wednesday between 5pm and 6pm, Hull FC fans can pick up the phone and speak directly to a Director on any subject of their choosing. Calls will be answered by one of the Executive Directors, James Rule, CEO, Tony Sutton, FD or the Community Director Jon Flatman. The subjects that fans have called about have varied widely from the obvious ones of team performance and team selection, to why Sky has moved a high profile local derby fixture from Friday to Thursday evening, to reporting a stadium issue such as safety, right the way down to simple questions like what time does the coach leave for the next away game!
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The Fans’ Forum is not organised by the club but by FC Voices, the independent supporters’ club. FC Voices and Hull FC are both committed to working closely together to ensure that the fans’ views feed into the club’s decision making. A good example is the official matchday magazine, “The 18th Man”, which was extensively re-shaped with input from FC Voices. The 68 page mag is good value at £3 and includes far more articles and features likely to be of genuine interest to fans than most matchday programmes I have seen. As a thank you to fans for their input, 10,000 copies were given away at the first match of the season and circulation is cur-
Case Study
rently running at around 8,000, a far bigger programme to attendance ratio than most clubs achieve. It is also used by the club to express its views, e.g. the regular two page “From the Chair”, featuring the views of chairperson Kath Hetherington.
Chart 1: 2009-2010 comparisons 8.4 8.2
I feel very proud to be a Hull FC fan
8.3
Hull FC works closely with the community
7 7.4
Hull FC communicates with their fans
New strap line In 2009 Hull FC was very keen to learn more about how the fans perceived the club and one of the survey techniques used to achieve this was to ask respondents to encapsulate their image of Hull FC in no more than three words. Some of the suggestions were no surprise, e.g. ‘Old Faithful’, the song of choice on the terrace, ‘black and white’, ‘Airlie Bird’, ‘established 1865’ and ‘loyal fans’. However, one of the themes that came through strongly was the fact that the fans were very proud of Hull – the city as well as the club. This led to the development of “Hull&Proud” which now features alongside the crest on all official communications and publications and has been adopted in a big way by the fans too.
2010 survey Following the success of the first survey, the 2010 survey was considerably expanded into a full fan satisfaction survey as well as updating the communications-focused questions that predominated on the first survey. The good news, as shown in the chart, is that the fans are much more satisfied with both aspects of two-way communications – hardly surprising in view of the monumental efforts made by the club. There is also a very high level of fan awareness of the new initiatives such as Call a Director, Tell Us and the expanded Fans’ Forum.
4.5
There are lots of opportunities to interact with Hull FC players
6.9 5.4 6.1
Hull FC actively listens to fans
3.6 5.3
Hull FC website needs improving
4.8 5 5.2
Hull FC.TV needs improving 1
Fan satisfaction The 2010 satisfaction survey has shown that Hull FC fans are very satisfied with most aspects of the matchday experience including safety and stewarding at the stadium, the interaction with other fans, the ticketing and the matchday programme. Compared with other professional sports clubs, Hull FC fans are much more satisfied with the value for money of the season ticket, the matchday atmosphere and the toilet facilities. However, there are some areas where they are less satisfied. As is often the case at football and rugby stadiums, satisfaction is lower with the food and service from the catering kiosks and with pre-match entertainment, which gives the club and the Stadium Management Company some areas to work on over the next twelve months.
Family occasion Compared with many football clubs, one of the things that stands out about the 2010 Hull FC fan survey is the extent to which the match is a family experience. Around half the respondents said they attend matches as a family, either with their spouse/partner or with their partner and/or children. This obviously helps to explain why there is a higher than normal level of fan satisfaction with factors such as safety and atmosphere. A high level of family attendance is also a great commercial benefit for clubs. Compared with single males, families tend to spend more on revenue generating products such as the catering, the programme, the lottery
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and they tend to be more loyal to the club rather than just the team. Hull FC is already getting a lot right for maximising family attendance and loyalty, including the atmosphere, the safety, the clean toilets and the popularity amongst families of the programme, the mascot and the club lottery. However, the survey has shown where improvements could be made for families such as the catering, the prematch entertainment and more zoning in the stadium so that families can sit together, as can the more noisy fans who want to spend the match chanting and voicing their views on Hull KR!
Customer-focused culture One of the main achievements of Hull FC’s Board is the extent to which they have successfully developed a genuinely customer-focused culture at the club. This is still very unusual at professional sports clubs, which is very strange from a business perspective. Peter Kenyon was probably the first visionary to understand the extent to which fans’ loyalty and propensity to spend money with a club will be influenced by their overall satisfaction with the club and the customer experience it delivers, not just the performance of the team. Winning is obviously very important to football and rugby fans, but it’s when team performance is not up to fans’ expectations that it really pays off to treat fans as important customers, to involve them and communicate with them and to give them the kind of experience they want at matches and in their other dealings with the club. S
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THE NATIONAL MEASURE OF CUSTOMER SATISFACTION
Stephen Hampshire Client Manager The Leadership Factor If you have any thoughts about this article you can contact Stephen at stephenhampshire@leadershipfactor.com
Wave 6 bi-annual UKCSI The latest UK Customer Satisfaction Index (UKCSI), which is the National Measure of Customer Satisfaction for UK organisations, has risen very slightly from 75.2 to 75.6. Based on a representative sample of 26,000 adults surveyed over the internet, the research is conducted by The Leadership Factor on behalf of the Institute of Customer Service. The latest wave is the 6th bi-annual UKCSI survey that has been conducted. (results available online at www.ukcsi.com)
Latest results As shown in Chart 1, the Utilities sector, though still at the bottom of the table, has shown the most improvement since January, improving by 1.7 percentage points to 69.6. Much closer to the top of the league table, both retail sectors have also seen good improvements, with both food and non-food now achieving 80% along with services.
Chart 1: UKCSI results July 2010 75.6 80.2
Retail (food)
80.2
Services
80.0
Retail (non-food)
79.3
Tourism
77.4
Automotive
77.2
Finance (insurance)
76.7
Leisure
75.3
Finance (banks) Transport
72.3
Telecommunications
72.2
Public Services (local)
72.1 70.0
Public Services (national) Utilities 0
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Robert Crawford Executive Director Institute of Customer Service www.instituteofcustomerservice.com
Customer
The best places to live Changes over the last six months are small for most sectors as they are for England and Scotland but Northern Ireland and Wales have both made good improvements, Northern Ireland by 3 percentage points to 77.7 and Wales by 2.2 to 76.9. If we look at the UKCSI scores for each of the home nations since the first UKCSI results in January 2008, we can see in Chart 2 that Northern Ireland and Wales have again improved by the most – both by a very impressive 8.1 percentage points. Initially, the results of all four countries were very close, with only 0.9 percentage points separating them, but at 75.2, England is now lagging well behind leaders Northern Ireland.
Chart 2: The best places to live 75.6
77.7
Northern Ireland 77.2
Scotland Jul-10 Jan-10 Jul-09 Jan-09 Jul-08 Jan-08
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Chart 3: Normal distribution 16
Distribution of scores Of the 153 named organisations scored in the survey, the median score (i.e. the middle-ranking organisation) is 77, the best score is 88 and the worst is 56 (see Chart 3). As we would expect, organisations are roughly normally distributed (i.e. most are near the average). As usual with customer satisfaction data the dissatisfaction tail is longer than the delighted one.
14 12 10
Number of organisations
6 4 2 0
The best companies This time 38 organisations have achieved a CSI over 80; seven are over 85. Waitrose (88) has continued to expand its lead over Marks & Spencer (85), its key rival as an upmarket food retailer. That excellent score puts it neck and neck with John Lewis (also with a CSI of 88) in the non-food retail sector, a dominant performance for the brand. SAGA is another company that delivers excellent service in more than one sector with SAGA Holidays heading the tourism sector and the company just coming second to BUPA in the insurance sector. The 10 highest scoring named organisations are listed below with the top two in each sector shown in Chart 4. - John Lewis (88) - Waitrose (88) - Lloyds Pharmacy (86) - SAGA Holidays (86) - Virgin Holidays (85) - Marriott (85)
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Chart 4: Top 2 organisations by sector Mazda Honda First Direct The co-operative bank BUPA SAGA Your local restaurant Your local fish & chip shop Your local Ambulance Service GP surgery / health centre The Identity & Passport Service Post office Waitrose Marks & Spencer (food) John Lewis Lloyds Pharmacy Your local hairdresser Your local electrician O2 T-Mobile SAGA Holidays Virgin Holidays Eurotunnel Virgin Atlantic Scottish and Southern Energy (SSE) Severn Trent Water
Automotive Banking Insurance Leisure Public Services (Local) Public Services (National) Retail (food) Retail (non-food) Services Telecommunications Tourism Transport Utilities
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- Marks & Spencer (food) (85) - Boots (84) - First Direct (84) - Marks & Spencer (non-food) (84)
Chart 5: Consistency by sector 50
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Transport Public services (local) Public services (National)
Every sector with the exception of Utilities has some suppliers who are above the overall UKCSI average, and most have at least one very good organisation.
Services Retail - non-food Leisure Tourism Finance - insurance Finance - banks Telecommunications Retail - food
Consistency
Utilities Automotive
Looking at the overall performance of sectors can mask differences in the level of satisfaction organisations manage to achieve. Some sectors (e.g. Automotive) are consistently good, some are consistently poor (e.g. Utilities), and others are very mixed (e.g. Transport).
Chart 6: Consistency pays 82
Automotive Satisfaction (CSI)
It is worth drawing attention to some of the organisations that significantly outperform the average for their sector: - Eurotunnel in Transport - 11 points over the sector average - The Identity and Passport Service in Public services (National) - 9 - John Lewis in Retail (non-food) - 8 - First Direct in Finance (banks) - 8 - Waitrose in Retail (food) - 8 These leaders are significantly better than average for their sector (whether it’s a strong or weak sector) and can expect to
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Chart 5 shows the gap between the best and worst organisation scored within each sector, with the average marked (o). We have always said that consistency is a good thing in customer satisfaction. Poor performing organisations are often characterised by a wide range of customer satisfaction scores across call centres, branches, outlets or other business units because there isn’t a company-wide customer focus or strong management ensuring that customer service standards are maintained across the organisation. Often, inconsistency in customer service will irritate customers just as much as a consistently poor customer experience. Chart 6 supports this assertion. The pattern isn’t perfect, but there is a fairly strong trend for more consistent sectors to have higher levels of overall satisfaction.
Retail - food Retail - non-food Tourism
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Chart 7: Complaints index 69.5
Overall
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Retail (food) Retail (non-food) Leisure Tourism Automotive Finance (insurance) Services Transport Utilities Public Services (local) Finance (banks) Telecommunications Public Services (national)
76.3
75.6 75.1 74.2 70.4 70.3 67.8 67.3 66.4 65.0
63.3 0
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see competitive benefits from their focus on customer service.
Complaint handling The retail sectors, first and third in the overall sector league table, dominate the complaint handling table (Chart 7) with improved scores. All those no-quibble refunds seem to be doing the trick, and the economic climate seems to have concentrated retailers’ minds on the value of every customer. Leisure is also performing well in this area.
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The complaints index is derived from how well organisations handle complaints plus the extent to which they give customers problems in the first place. Chart 8 shows that tourism is the best sector at giving customers very few problems. Retailers do give customers more problems but they are by far the best at handling complaints.
Complaint handling and customer loyalty It’s very unfortunate that complaint handling generates by far customers’ lowest satisfaction scores in the UKCSI because it makes a
Customer
big impact on customer loyalty, especially customer defections. As shown in Chart 9, across all UKCSI companies, the average loyalty index is 76. This is produced from the scores given by customers to questions about Harvard’s 3Rs of customer loyalty – retention, related sales and referrals. Not surprisingly, customers who have never had any kind of problem with the organisation are more loyal (a loyalty index of 79) but the most loyal are customers who did have a problem but were very satisfied with the way it was handled. Their loyalty index goes up to 81. By contrast, the loyalty index of customers who had a problem but were dissatisfied with the way it was handled plummets down to 36.
Chart 8: Problems and complaints Overall
88%
9%
Tourism Services Finance (insurance) Automotive Retail (non-food) Retail (food) Leisure Transport Utilities Public Services (local) Finance (banks) Public Services (national) Telecommunications
94%
5%
6%
92%
7%
90%
8%
90%
7%
89%
7%
87%
11%
84%
11%
83%
14%
82%
13% 17% 40%
60% Didn't complain
80%
100%
Complained
Chart 9: Complaint handling and loyalty 100 90
81
79
76
70 60 50
36
40 30
Loyalty Index all customers
No problem
Complaint dissatisfied Complaint satisfied
Chart 10: Net detractors on complaint handling 31%
Retail (non-food)
39%
31%
Retail (food)
42%
28%
Leisure
43%
26%
51%
23%
Automotive
48%
20%
Services Transport
17%
Telecommunications
17%
60% 64% 66%
17%
Finance (insurance)
64%
15%
Utilities
60%
14%
Finance (banks)
62%
13%
Public Services (local)
60%
13%
Public Services (national)
0
64%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
90%
100%
Chart 11: Net promoters on ease of doing business 54%
11%
Retail (food)
52%
7%
Retail (non-food)
Another big driver of customer loyalty is ease of doing business. On this, Chart 11 paints a much better picture. Retail (food) has a very good net promoter score of 44.7 for ease of doing business, with non-food retailers and services and tourism businesses also over 40%, and leisure very close behind. By contrast, utilities and public services (local and national) are at the bottom of this league table with net promoter scores below 10%.
92%
No problem
Services
Ease of doing business
7%
20%
Tourism
For complaint handling, no sector has a net blue score. Even the best at complaint handling (non-food retailers), make only 31.5% of customers who experience a problem very satisfied with the way it was handled compared with 38.6% who were dissatisfied – a net detractor score of 7.1%. With net detractor scores in excess of 45%, seven sectors are much worse. They are utilities, telecommunications, transport, both finance sectors and both public sectors.
6%
92%
81% 0%
80
As well as being the area where organisations have the most opportunity, and need to improve, complaint handling is also one of the biggest drivers of loyalty. One school of thought suggests that: - customers who score 9-10 promote that organisation by deed and word-of-mouth - customers who score 1-5 are detractors - customers who score 6-8 are passive Chart 10 shows the percentage of customers who score 9-10 (blue) and those who score 1-5 (red) for complaint handling. The objective should be to have a net blue score.
92%
50%
8%
Tourism
8%
Leisure
9%
Finance (insurance)
49% 48% 44%
13%
43%
Finance (banks)
18%
Automotive
41%
12%
Telecommunications
37%
23%
Transport
37%
17%
Public Services (national)
28%
Public Services (local)
27%
Utilities
23%
0
10%
20%
35% 35% 32%
30%
40%
50%
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Customer
Word of mouth in a connected world This time we asked customers some extra questions about new media. First of all we asked people which social media tools they expected companies to use. Most customers expected to see some sort of online presence from organisations, but as shown in Chart 12, only a minority felt that engagement with the prominent social media platforms is important. Only 6% of customers said that they would be put off doing business with a company that did not offer these channels.
Chart 12: Customers’ internet expectations A Twitter account I don’t expect any of these
A Facebook page/group
14%
38%
40%
As you might expect, consumers’ attitudes to this are influenced by age, but Chart 13 shows that even the youngest categories of consumer do not seem heavily engaged with social media when it comes to their dealings with companies. Things vary a little more by sector. Chart 14 shows that social media are important for the automotive sector with leisure and tourism close behind. Customers see internet reviews as important for most sectors, with the exception of services, where customers seem to make least use of the internet in their dealings with organisations in the public and private sectors. S
8%
Onsite reviews of products/services
Chart 13: Social media by age
18 to 24 25 to 34 35 to 44 45 to 54 55 to 65 65+ Twitter
Onsite reviews of products/services
I don’t expect any of these
Chart 14: Social media by sector Automotive Finance - insurance Finance - banking Leisure Public Services (local) Public Services (national) Retail - food Retail - non-food Services Telecommunications Tourism Transport Utilities I don't expect any of these
Onsite reviews of products/services
A Facebook page/group
A Twitter account
Conference
Jude Nottingham is the managing director of The Leadership Factor. judenottingham@leadershipfactor.com
Organised by the Focus Group, the European Customer Experience World Conference, was held at the Renaissance Hotel at Heathrow Airport on 18th and 19th May. Chairperson Jason Wright of RBS Retail Telephony set the scene for the event, with his opening question - “How do we deliver excellent customer experiences in a forever changing world”? Using Charles Darwin’s quotation:
would address how to contribute to the bottom line through enhancing our brands, engaging our employees and delighting our customers in the face of massive change – both in technology and customers’ expectations.
“It’s not the strongest of species that survives, nor the most intelligent, but the one most responsive to change.” Jason explained that the focus for the two days
The ‘Happy Point’ Keynote speaker Mike Wittenstien, has been developing customer experience
strategies since 1999, when he worked for IBM. Posing the question “Does it always cost more to enhance and improve the customer experience?”, Mike talked through case studies showing that delivering an improved customer experience doesn’t mean higher costs to the business. For example, casinos print out receipts and no longer spill out coins from fruit machines, supermarkets reduce queues with self checkouts. In these
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starting in the warehouse, packing and shipping for real customers, it gives Zappos a good insight into how they will eventually perform for internal customers. Some of the recruits that didn’t make it through training at Zappos thought they were too good to be working in a warehouse. Zappos want employees who are humble. There’s a lot of talent out there in the marketplace but nobody wants to work with someone that’s arrogant and can’t put the customer first.
Figure 1: Experience value and costs
examples enhancing the customer experience has proved to be cost efficient for the company too. Using the analogy of a restaurant, Mike emphasised the importance of consistency between customer facing staff (front of house) and the operations or the engine room (the kitchen). A successful restaurant must have both parts of its business perfectly in sync with one another, resulting in a “ Happy Point” (Figure 1 above) with operational benefits as well as improved customer experience.
Not having strict rules or scripts to follow and empowering staff to deliver what they believe is the best customer service is not considered a risky customer service strategy by Zappos. That’s because Zappos believe that if employees feel part of a higher purpose, they will display behaviours that aim to fulfil the higher purpose. Interestingly when an individual feels part of something bigger (a higher purpose) and their efforts towards that are recognised, they are likely to feel happier too.
Golden hello-goodbye The 3C pyramid Alfred Lin, COO of Zappos, gave us his potted career history from selling pizza slices in his college dormitory, to selling Zappos to Amazon for over one billion US dollars. Zappos started out aspiring to be a great online clothing retailer, now Zappos is about delivering happiness. This journey was shown simply by their 3Cs, clothing, customer service, culture and Zappos is committed to moving its customers up the 3C pyramid (Figure 2 right) to delivering happiness. The idea of delivering happiness was inspired by a customer’s comment after she received her Zappos order and described it as ‘happiness in a box’. For Zappos, one measure of success that shows they have delivered happiness to their customers is when the customer actually says WOW on the phone to them. Zappos call centre staff are given intensive training and don’t follow scripts. Agents have the autonomy to deliver the best customer service they know how, encouraging customers to say WOW.
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When delivering happiness is the organisation’s higher purpose, employees really need to be the right fit for the business. Zappos understands how easy it is to get the recruitment process wrong, so they offer a graceful exit route for new starters of a $2,000 lump sum to walk away during training if it isn’t for them. That’s a clear commitment to everyone about the importance of not wasting time. The new recruits that are training for a Zappos career are thrown in to experiencing the guts of the business by doing all tasks across the business, from warehouse to office. With new employees Figure 2: The 3C pyramid
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Zappos are infectiously ambitious and Alfred’s final advice was for everyone to have a vision, a higher purpose…and then, whatever you’re thinking…think bigger!!
Social media Director of Henley Centre for Customer Management, Moira Clark, brought to life the world of social media and what it means to businesses. There were some compelling facts for why we should take social media more seriously, such as 1 in 8 couples in the USA met online, 80% of companies use LinkedIN as part of their recruitment processes and if Facebook was a country it would have the fourth largest population in the world! Social media are here to stay so we need to start thinking how we use it in business. Social media are no longer the domain of the marketing and PR agencies, they’re becoming increasingly important for customer experience managers and in forthcoming years there will be an increase in social media usage with more relevance for business leaders and customer strategists. The message was loud – “get in there now!”. So what can social media do? One very practical application is crowd sourcing.
Conference
Crowd sourcing
Acquiring new customers
Crowd sourcing is taking a job and delegating it to the crowd as an open call of help. At Proctor & Gamble for every inhouse researcher there are 200 external researchers. Top Coder, the online hub for programmers, run a fortnightly competition of programming problem solving with a cash prize for the winner. Not all crowd sourcing is done for monetary reward, as individuals are reputation building online too. There is kudos in providing a solution to a company’s dilemma. For those 21 years and younger, the ‘digital generation’, it’s easy to juggle the media and accept the digital changes that are happening around us. But for many being a ‘digital immigrant’ (and that’s anyone 35 years plus with a busy life and little time for a second one online), social media and digital technology can be overwhelming. That’s no excuse though, employees are getting younger and social media are becoming the norm so its time for digital immigrants to tune in or miss out.
Abigail Rappoport-Sharan shared Microsoft’s strategy behind the launch of Windows 7. On the back of criticism and negative press for Windows Vista, Microsoft knew that they could not make the same mistakes again with their launch of the new Windows 7. Microsoft did much more than learn from past mistakes they have based their whole development strategy on customer feedback and designed their promotional campaign to show customers that they DO LISTEN!
Henley’s own research shows that people are aware of the changes coming: “the ants have megaphones now, so one little person in the basement bunker can cause you a lot of problems.” There are people out there consuming and commenting on our products and services. Their feedback and contribution can be swept under the carpet and ignored or we can chose to engage with it. Finally, a thought for employees. What goes on tour no longer stays on tour social media have seen to that. So if your online profile and social media ramblings are thwarting your career you should consider suicidemachine.org a means of obliterating your online identity. The ECEW’s afternoon sessions split in to three streams:
Microsoft’s customers have different needs, from the Xbox user, to the person at home using hotmail, through to a CEO of a large multinational whose software is business critical. Customers’ feedback was gathered at every opportunity, from social media, Microsoft sites, Channel 9 video blog site and Microsoft error messages. Also feedback came from Microsoft’s official sites and other specialist knowledge resources such as Technet, the online community of IT professionals. Mircrosoft collected over 10 million thoughts, most of which were verbatim comments and suggestions. The data collection process was an enormous undertaking that resulted in a good understanding between the needs of customers with most users wanting reliability, security and of course faster service. The company also used trials and user research to monitor over 40,000 hours of early Windows 7 usage.
Windows 7 was my idea The advertising campaign, ‘Windows 7
was my idea’, is well known and features genuine customers whose ideas have been incorporated. A good example on youtube to watch is Windows 7 - My Idea: Ramin’s Snap. In October 2009 Windows 7 was launched with great success, the pre orders storming ahead of Harry Potter and the Deathly Hallows to become Amazon’s biggest ever pre-order product. As well as sales, the results were clear to see in Microsoft’s customer satisfaction scores, as shown in the chart. (Figure 3 below).
Create, capture & measure value Mark Taylor, Commerical Director for Nationwide Autocentres Nationwide Autocentres was recently sold to Halfords. Mark is a big believer in managing by fact and making sure that he never loses sight of the commercial reasons and benefits in measuring and understanding customers’ experience. Since 40% of Nationwide Autocentre’s business comes from personal recommendation, Mark explained that a key measure from their customer satisfaction surveys was likelihood to recommend. Out of every 55 people they surveyed 10 people said they would recommend, but it doesn’t stop there. Nationwide went back to all those customers that had said they’d recommend and asked them to go ahead and do it. They went further offering their loyal customers £20 of fuel after the person they’d recommended had had their car serviced. In fact Nationwide encouraged customers to recommend up to 5 people – that’s £100 worth of fuel.
Figure 3: Customer satisfaction with Microsoft
- Acquire new customers - Create, capture and measure value - Employee experience Here are some of the key messages from each stream
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The campaign was tested and showed great results with customers doing just what they said they’d do. This is strongly aligned with something we’ve always said at The Leadership Factor – companies should invest more in rewarding the loyalty of their best customers, rather than giving most attention to the dissatisfied ones or to winning new customers. Nationwide did try other initiatives to reward recommending including offering a car valeting service to customers – it worked but not as successfully as the free petrol. Nationwide want to deliver great service and Mark is keen to define good service as not always giving the customer a freebie to say sorry, or knocking something off the bill. What Nationwide customers want is for someone to listen to what they’ve said or suggested, recognise whether or not they have a valid point and, when appropriate, for the company to appreciate that point and do something about it. Mark believes companies need to respond quickly to customers’ feedback and respond genuinely. A key lesson from Nationwide is not to rely on templated letters and email responses to customers. You can improve the customers’ perceptions only by responding to customer feedback relevantly and sincerely. The second message to take away from Nationwide Autocenters is to keep things simple and make sure that you test, test and test what you’re doing. Only continue to do the things you know are good for the business and improve the customers’ experience.
research into what turned customers into fans uncovered four key characteristics: (See Figure 5 below). The thing is, whilst “delivering what you say” sounds obvious, it just doesn’t always happen. You know that from your own customer experiences, and at The Leadership Factor we have data from thousands of customer surveys showing that not delivering promises and commitments is one of the main drivers of customer dissatisfaction. But some organisations can do it. Jane believes that it’s the ones with the highest levels of employee satisfaction, citing Tesco, First Direct, Richer Sounds and Ritz Carlton as companies with high levels of customer Figure 4: Our Vision... Four Elements in Harmony
Figure 5: We went on a journey
Employee experience Jane Reid, Business Architect – Experience Innovator, at O2 emphasised how much the employee link of the Service-Profit Chain contributes to delivering a great customer experience at O2. (See figure 4 right).
Figure 6: The O2 people promise
O2 believes in turning customers into ‘fans’, which, according to Jane, can be achieved only by engaged and motivated employees going the extra mile to deliver a flawless customer experience. O2’s
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loyalty that are also great places to work. Jane pointed out that O2 have followed a four year journey that started back in 2005 with top management commitment and involvement (“Leading for Total Engagement”), leading in 2006 to “The Better Place Summit”, which resulted in the articulation of “The O2 people promise”. This was launched throughout the business (“The O2 Premiere”) in early 2007 with tangible rewards for employees and managers living the promise. (See Figure 6 below). The theory seems to have translated into practice. By the end of 2009, O2 topped the telecoms league table in the UK Customer Satisfaction Index. S
Case Study
EAL (EMTA Awards Limited) is a leading UK Awarding Organisation for vocational qualifications in the Engineering, Manufacturing and Building Services Sectors. With more than 40 years experience, EAL’s qualifications are recognised as representing the highest standard of practical achievement and are delivered by over 800 educational centres including colleges, training providers and major employers including BAE Systems and Toyota. Certificating more than 100,000 learners in 2009, EAL uses its team of in house experts to develop high quality qualifications relevant to both industry and the learner. EAL is committed to customer service and ensures guidance and support is available every step of the way.
The 2010 customer satisfaction survey The 2010 EAL customer satisfaction survey was carried out by The Leadership Factor, who conducted interviews with over 200 EAL customers throughout April and May. The sample, a representative spread, included a wide range of the different organisations EAL has relationships with. As shown in Chart 1, these are mainly trainChart 1: Sample breakdown by sector
17%
35%
48% Training provider College Employer / other
ing providers, followed by colleges and then employers. The sample was also representative according to the different types of individuals who experience EAL’s service with contacts in both management and operational roles. The Leadership Factor has conducted two previous Engineering customer satisfaction surveys for EAL in 2006 & 2008. Prior to the first survey carried out in 2006, exploratory research involving in-depth interviews was carried-out with 20 of EAL’s major customers in order to design a questionnaire which focused on the most important areas to customers. This year, exploratory research was conducted again, and the measures were updated to
YEAR 2010 2008 2006
reflect changes in EAL’s customers’ priorities. Since customer satisfaction is all about ‘doing best what matters most to customers’ (i.e. there’s little point being great at something that’s not important to customers), it’s essential that any overall measure of customer satisfaction is based on the customers’, not the organisation’s, priorities. The Satisfaction Index™ is therefore a measure of the customer experience through the customers’ eyes. Since some customer priorities are more important to them than others, Satisfaction Index™ uses importance ratings to weight satisfaction ratings to produce an overall, weighted customer satisfaction index that can be reliably monitored over time.
SATISFACTION INDEX 87.0% 81.9% 79.9%
TM
STATISTICAL RELIABILITY ±1.1% ±1.3% ±1.4%
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Case Study
Chart 2: EAL compared with all other organisations 50%
60%
70%
80%
90%
the Leadership Factor to conduct our customer surveys, we know we’re putting our energies into those areas that are of the highest importance to our customers. That’s why we’ve enhanced many areas of our organisation to address our priorities for improvement – and so far, it appears to have worked!
Chart 3: Benchmarking EAL in the education sector 100%
EAL 2010 Index:87.0%
50%
60%
70%
90%
80%
100%
EAL 2010 Index:87.0%
EAL 2008 Index:81.9% Improving Service and Systems
EAL 2008 Index:81.9%
Let’s begin with our commitment to improving our service and systems, a great contributor to simplifying candidate registration and improving problem solving. In 2008, EAL made a significant investment in our online services, bringing back in house what was previously outsourced. To facilitate the transition, we made the strategic decision to appoint a team of ‘freshers’ – staff new to both the business and the sector, to manage the project. This resulted in an enthusiastic and driven team, each of whom added a huge amount of value. They consistently looked at ways to improve our levels of service and systems. Extremely committed to achieving our goal of bringing Online Services back in-house, they devoted a lot of time to ensuring they supported the business, as well as each other. To this day, they continue to challenge and develop the customer service processes, always with a smile on their face. Once the project was completed and online services were integrated into our in-house systems the infectious nature of the project team had certainly ‘rubbed off’ on other EAL staff members! They have built a great rapport with EAL’s cus-
EAL 2006 Index:79.9% EAL 2006 Index:79.9%
Since the 2008 survey, the Satisfaction Index has increased by 5.1%, which is a very impressive improvement, and by 7.1% since 2006. The league table in Chart 2 shows that compared to other organisations generally, EAL is well up in the top quartile on its ability to satisfy customers and in the education sector it is now in the top 5%. in addition, EAL has a very high Net Promoter Score of 64.6%.
Specific customer satisfaction improvements Not surprisingly, with such a good overall satisfaction result, EAL achieved some very high customer satisfaction scores for specific customer requirements. Most interestingly however, is how EAL managed to drive through actions that led to significant improvement in customer satisfaction in specific areas. As a result of previous customer satisfaction surveys, The Leadership Factor identified four PFIs (priorities for improvement) for EAL: • • • •
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Having clear points of contact Keeping customers informed Ease of candidate registration Problem solving
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The chart clearly shows the great strides that EAL has made in focusing their attention on the four areas that would drive the biggest improvement in overall customer satisfaction. The most interesting question is how was this achieved? How did EAL manage the change necessary to transform the customer experience? Emma Bretton, EAL’s Policy and Commercial Executive, looks back on the last 4 years at the story of how these four areas were improved... “Ultimately, you can’t manage what you don’t measure! EAL invests heavily in ensuring our customers receive the best possible experience and by working with
Chart 4: EAL’s PFIs 2006-2010
2006 2008 2010
Having clear points of contact
Keeping you informed
Ease of candidate registration
Problem handling
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1
2
3
4
5
6
7
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9
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tomers and are highly commended on the service they provide. Between 2008 and 2010 the number of outstanding queries at the end of each week had reduced by 80%, and as a result, we’ve quickly learnt that you can put as many measures, systems and processes in place as you like - but it’s the people who really make the difference!
Keeping Customers Informed Since 2006, we’ve looked to improve our capabilities for digital communication with our customers by upgrading the website, and sourcing a good quality email marketing solution. Firstly, we upgraded our quarterly newsletter ‘INTOUCH’ to include topics such as ‘Centre Spotlight’ – a chance to take an in-depth look at how our centres are using EAL qualifications. This was followed by the launch of a monthly E Bulletin, which gives customers an early alert to new products and industry news. As tempting as it may be to put all our eggs in the digital basket, we recognised from tracking the number of customers who read our communications in this format, that there was a need to supplement our offering with both digital and print versions. To avoid over communicating with our customers, we adopted this duel approach specifically for crucial information. The need to keep customers informed became of paramount importance as we reached the end of 2009. With the imminent launch of the Qualifications and Credit Framework (QCF), Functional Skills and Essential Skills Wales, our customers were undoubtedly worried about how these changes would affect them. By early 2010, it became clear that our customers were struggling with the demands of QCF and it was at this point we stepped-in to offer detailed information and support. We quickly introduced the ‘Transition e-bulletin, issued to over 1,000 customers on a weekly basis, outlining information on funding, qualifications and general news to help ease the transition between educational frameworks. EAL also held 17 regionally based free
events on the QCF and 6 on Functional Skills, all presented by our own External Verifiers and Product Development team. We held a further 6 that were focussed purely on our building services qualifications, helping customers to understand how the qualifications will change under the new framework. Once again we were able to rely on the enthusiasm of our own staff to reassure and inform customers, providing a valuable support network for the future. We took customers’ questions from our events away with us and sought industry expertise for the answers. This information was built into a comprehensive FAQs document which was uploaded to our website and supported by our quarterly newsletters and monthly e-bulletin newsletters.
Customer Contacts are Key EAL is the only Awarding Organisation to employ full time External Verifiers (EVs) to support centres in delivering qualifications in line with quality standards. By having access to a dedicated External Verifier, customers have a single point of contact someone who truly understands their situation in its entirety. The relationship customers have with their EV is much stronger than EAL originally anticipated – it truly can make or break a customer’s loyalty to EAL. It’s a good thing then, that we’ve invested time and effort into ensuring centres continue to receive dedicated support. These lines of communication remain open and uninterrupted at all times. More recently, EAL has re-developed their quality assurance processes to lend a ‘smarter touch’ to regulation. These new, streamlined processes make it simpler for the customer to meet quality requirements, leaving more time free for the EV to spend with the customer, understanding and meeting their needs.
EAL’s journey over the last 4 years has proven that measuring customer satisfaction is integral to improving the business, but it’s only the first step. It’s what organisations do with the findings that will make the biggest difference. By turning insight into action, by making the changes that really matter, organisations, such as EAL can implement the steps that will really unlock the potential of your business. Does that mean we’ll be repeating our customer satisfaction survey next year? It certainly does! S
Emma Bretton Emma Bretton has worked with EAL for over 12 months, joining their Marketing Team in 2009 and now contributing to EAL’s strategic growth as Policy and Commercial Executive. Prior to her appointment with EAL, Emma braved the world of financial services as Product Development Manager in a well-known life assurance organisation. Emma’s passion for customer centricity and her commitment to innovation has quickly become her brand after assisting with a raft of customer focussed improvements since joining EAL. www.eal.org.uk
Jim Alexander Jim has many years of experience as both a user and provider of research. The clients for whom he manages customer and employee surveys span a wide range of activity and he is very keen to see all of them succeed by maximising the experience they deliver to staff and customers. He strongly believes that delighted staff will deliver delighted customers and that good research drives successful strategy. jimalexander@leadershipfactor.com
EVs were shown to be of significant importance to our customers throughout 2010’s satisfaction scores so we are convinced that our commitment to maintaining a team of highly competent, full-time EVs has helped achieve the increase in this year’s satisfaction scores.
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Employee
Employee Engagement
UPDATED Research Fi ndings
In Stakeholder Satisfaction Volume 5, Issue 2, we reported the findings of our initial survey of employee engagement in the UK workplace. To view the article vist our articles section at www.stakeholdermagazine.com. Two years and a major recession later, we have repeated the survey and uncovered some interesting changes in employees’ attitudes. The survey of 2,700 adults was conducted on the YourSayPays internet panel and involves all segments of the UK workforce. Employee engagement Engagement is generally viewed as ‘discretionary effort’. In other words, when employees have a choice, will they act in their employer’s best interests? Engaged employees are seen as fully involved in and enthusiastic about their work, generally feeling positive and passionate about their job. As we explained in the previous article, there are three levels of engagement – ‘engaged’, ‘disengaged’ and ‘not engaged’.
“Engaged” employees work with enthusiasm and passion, they want to know the desired expectations for their role so they can meet and exceed them. They perform at consistently high levels. They want to use their talents and strengths at work every day. They have an intuitive connection to their company and will constantly endeavour to drive innovation and move their organisation forward.
“Not engaged” employees aren’t necessarily negative or positive about their company. They see work as a source of income and work because they have to. They have little or no proactive interest in work, often being labelled ‘nine-to-fivers’. They often have an arms-length attitude toward their job, their employer, and their co-workers, but they generally do what is asked of them and don’t cause any trouble.
“Disengaged” employees are “Consistently Against Virtually Everything.” Not only are they unhappy at work; they’re constantly acting out their unhappiness. Every day, actively disengaged workers seek to undermine what their engaged co-workers accomplish.
This makes the ratio of ‘engaged’ versus ‘disengaged’ employees a vital metric for companies to monitor.
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Employee
than they did for several years previously but we also know that satisfaction (whether customer or employee) is a perception. It’s about how people feel and doesn’t always relate to the reality on the ground. Presumably, due to the perceived benefits of simply having a job during the recession, many employees actually feel more satisfied with a level of pay that’s actually declined in real terms. This is backed up by the fact that 56% of the sample had not had a pay rise and 35% worked for organisations that had made staff redundant in the last twelve months.
Chart 1: Employee engagement 0%
20%
10%
30%
50%
40%
60%
30.9% Engaged
32.9%
48.1%
Not engaged
49.0%
21.0% Disengaged
18.1%
little change in the hierarchy of what’s important to employees but there have been some interesting changes in satisfaction.
As shown in Chart 1, Employee engagement has fallen slightly as a result of the recession but only by two percentage points down to 30.9%. The ‘not engaged’ segment has also reduced slightly so the ‘disengaged’ portion of the UK workforce has increased by almost three percentage points from 18.1% to 21%.
The most obvious thing is that some of the ‘intangibles’ that make a big difference to employee engagement are showing significantly lower levels of employee satisfaction. These include: - Relationships with colleagues - Relationship with your line manager - Being treated fairly - Your line manager listens to you
Links to employee satisfaction As before, we need to look at employee satisfaction and how it links to engagement in order to generate the information we need to drive employee engagement higher. We therefore asked our panel of 2,700 employees to rate their satisfaction with a list of key requirements, and to score the relative importance of those requirements. Chart 2 shows the employee satisfaction scores, with the requirements listed in order of their importance to employees. There has been very
By contrast, employee satisfaction with some of the ‘hygiene factors’ or ‘givens’ has improved, most notably ‘pay and benefits’ and ‘promotion opportunities’, although the latter still only records a lowly satisfaction score of 5.71. We know that in most organisations, pay and benefits have improved far less over the last two years
Chart 2: Employee satisfaction 6
5
7 6.34
Being treated fairly
6.28
Job security Work/life balance
6.69
Pay and benefits
6.65 6.21
Recognition of your performance
6.74
Having the resources to do your job
6.86
Relationships with colleagues 6.47
Your line manager listens to you
6.67
Relationship with your line manager 6.09
Communication from senior managers
6.26
Training and development
6.94
Physical working environment Promotion opportunities
5.71 May-10
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Opportunities for improvement Attracting and retaining ‘talent’ is a major focus of HR departments in most large organisations because the pool of talent is seen as too small to go round, so you have to be an ‘employer of choice’ if you’re going to compete effectively for this scarce resource of highly talented and motivated people. This is supported by the fact that less than one third of the respondents to this survey are ‘engaged’. In many companies ‘talent management’ programmes are aimed at a far smaller proportion of the workforce than 30%. So what about the rest of the workforce? Clearly, organisational performance could be significantly improved if the other 70% could be harnessed more effectively, but how to do it? Opinion is divided. In some organisations much effort is expended on ‘disengaged’ staff. In some ways this isn’t surprising since they tend to cause management the most problems so may seem to represent the best opportunity for improvement. But do they? Some people argue that if the definition of ‘disengaged’ staff is correct (Consistently Against Virtually Everything), there may be little return on investing limited resources in them. There may be more to gain from trying to motivate the much larger group of ‘not engaged’, who make up virtually half of the workforce. Since the factors that organisations need to address to improve the engagement of the ‘not engaged’ are very different to the ones that explain the attitudes of the ‘disengaged’, it’s essential to be clear about what the objective is.
Employee
To improve the engagement of the ‘not engaged’ the best things to work on would be the following factors: - Relationship with your line manager - Relationships with colleagues - Your line manager listening to you - Being treated fairly - Having the resources to do the job - Job security - Work-life balance. One can’t help feeling that the ‘not engaged’ simply want a more pleasant time at work – less hassle from their ‘engaged’ line manager, a new computer screen and more comfortable chair, job security regardless of the company’s performance and flexi-time! To be actively ‘disengaged’ and going out of your way to sabotage the efforts of your ‘engaged’ colleagues, you do have to be motivated and prepared to make an effort, albeit not in the direction desired by the company. Based on that assumption, ‘disengaged’ employees might possess the personal characteristics needed to be an ‘engaged’ employee to a greater extent than the ‘not engaged’, who just want an easy life. Interestingly, if you look at the factors that seem to be eating away at the ‘disengaged’ they do suggest a frustrated group of people with more ambition: - Promotion opportunities - Recognition of your performance - Communication from senior managers - Pay and benefits - Training and development. I wonder how many ‘disengaged’ employees are incredibly involved, motivated and engaged in various out-of-work activities. This suggests that more communication and one-to-ones with ‘disengaged’ employees could be worthwhile.
The cost of low engagement There are many costs of poor employee engagement that are impossible to quantify, such as the damage to organisational culture perpetrated by ‘disengaged’ employees, but the YourSayPays employee engagement survey also uncovers some much more tangible costs such as absenteeism. It’s true that anyone can get carried away and drink a little bit too much,
Chart 3: The cost of low engagement (1)
% Answering Yes
Have you ever taken a sick day off due to having a hangover? Disengaged Not engaged Engaged 0%
5%
10%
15%
Chart 4: The cost of low engagement (2)
20%
% Answering Yes
Have you ever taken a day off sick to enjoy good weather? Disengaged Not engaged Engaged 0%
5%
10%
Chart 5: The cost of low engagement (3)
15%
% Answering Yes
Have you ever claimed back more from your expenses than you were entitled to? Disengaged Engaged Not engaged 0%
5%
10%
15%
Chart 6: The cost of low engagement (4) How likely are you to switch jobs in the next 12 months? Engaged Not engaged Disengaged 0%
20%
but as Chart 3 shows, both ‘disengaged’ and ‘not engaged’ employees are far more likely to take the following day off sick. It’s even worse for serious skiving such as calling in sick in order to stay at home and enjoy some nice sunny weather. As shown in Chart 4, the ‘disengaged’ are twice as likely as the ‘engaged’ to pull this fast one. Not surprisingly, the ‘disengaged’ are also more likely to claim more than they are entitled to on expenses. Although the figures in Chart 5 look quite close, and appear to show that ‘engaged’ employees fiddle their expenses more than the ‘not engaged’, it’s worth bearing in mind that ‘engaged’ employees tend to be in more senior positions so are much more likely to
40%
60%
have expense accounts. Given that many ‘disengaged’ and ‘not engaged’ employees will rarely or never make expenses claims, the fact that almost 10% of all ‘disengaged’ and ‘not engaged’ employees have over-claimed is quite shocking, and, since they represent 70% of the workforce, a significant cost to the organisation. Recruitment is an enormous cost for most organisations of any size so reducing staff turnover is usually a key HR goal. The data shown in Chart 6 demonstrates that the ‘disengaged’ are three times as likely to switch jobs in the next year than the ‘engaged’ and the ‘not engaged’ twice as likely. Again, since they represent 70% of the workforce, this is a very large cost to
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Employee
the organisation. There is an argument that if the ‘disengaged’ are active saboteurs, it is quite convenient if they leave of their own accord. This is probably true once they have become irrevocably ‘disengaged’ but very few of them would have been ‘disengaged’ on their first working day in the company so there are huge potential savings from preventing employees becoming disengaged. As we’ll see in the next section of this article, measures to achieve that are not necessarily a large financial cost to the organisation. There are some additional costs of low employee engagement which, whilst difficult to quantify, are far from intangible. As shown in Chart 7, ‘engaged’ employees work harder and longer and do what is necessary to get the job done. Moreover, their much greater propensity to recommend the organisation as a place to work or a place to do business has a real financial value to the company.
Low cost measures to improve engagement Obviously, there are some drivers of employee engagement such as pay, benefits and promotional opportunities that are costly but there are some that are not, such as ‘communication from senior management’ and ‘relationship with my line manager’, mentioned earlier. Chart 8 shows a raft of additional soft management skills that make a big difference to employee engagement. They obviously cost management time, which can be a factor in today’s lean organisations, but in our experience it is more likely to be management culture that is the key. To what extent is it managers’ top priority to spend time addressing these soft issues with their reports? Do they have regular oneto-ones so that everyone who reports to them thinks they care, do know what’s expected of them, have received recognition or praise where due and have had a chance to express their opinions or simply ask their manager some questions?
Customer satisfaction One interesting statistic to emerge from this year’s employee engagement survey
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Chart 7: The cost of low engagement (5) I would encourage my friends and relatives to do business with my organisation
I would recommend my organisation to someone who seeks my advice about a job opportunity
I take work home to do
I exert a lot of energy performing my job
I stay until the job is done
0
5
10
5
10
Disengaged Not engaged Engaged
Chart 8: Low cost measures to improve engagement Someone at work has talked to me about my progress recently
The mission/purpose of my company makes me feel my job is important
At work my opinions seem to count
Someone at work encourages my development
My supervisor or someone else at work seems to care about me as a person
I have recently received recognition or praise for doing good work
At work I have the opportunity to do what I do best everyday
I know what is expected of me at work
0
is that employees think their companies are better at satisfying customers than they were two years ago. Based on how satisfied employees think their organisation’s customers are, the customer satisfaction index has improved from 73.0 to 74.8, which is quite close to the UKCSI over a comparable period. S
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Mark McCall Client Manager The Leadership Factor markmccall@leadershipfactor.com
Employee
Talent Matters According to PricewaterhouseCoopers’ 13th Annual CEO Survey, in the UK 65% of CEOs plan to increase investment in leadership and talent management and 78% plan changes to their talent management strategies in the wake of the financial crisis. Opinion about when we will recover from the crisis is divided. However, organisations that are well-led have a much better chance of survival and are able to take advantage of new business opportunities created by changes in customer demand and spending. Talent management has rarely been more critical to business success.
The meaning of “talent”
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Talent consists of those individuals who can make a difference to organisational performance, either through their immediate contribution or in the longer term by demonstrating the highest levels of potential.
In difficult economic times, smart organisations don’t automatically follow conventional wisdom – extracting more from employees and investing little in people development. Instead, they strive to make their organisation attractive to “talented people” who already know how valuable they are. But, what do we mean by “talent”? Is it the few or is it the many? Unsurprisingly, opinions differ. Graduates, high performers, senior managers and people in short supply are frequently mentioned and the answer often depends on the organisation’s culture as well as personal opinion. It’s important to use
definitions and labels that don’t denigrate others, especially now when many employees feel de-motivated and are wondering about job security. In 2007, research by Cannon and McGee, for the CIPD, concluded that it was possible to distil differing opinions into a definition that can provide a working basis for the development of a talent management strategy: “Talent consists of those individuals who can make a difference to organisational performance, either through their immediate contribution or in the longer term by demonstrating the highest levels of potential.”
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Employee
Interestingly, this definition applies to the few, for example the top 1% of performers in a high-growth bio-technology company, and the many, such as receptionists and restaurant employees at a 5 star hotel, who are key to an exceptional guest experience. Terms for talent management vary too, but the CIPD’s latest research report seems to sum this up nicely as: “Initiatives and/or strategies put in place to harness the unique talents of individual employees and convert their talent potential into optimum organisation performance”. What is clear is that developing and communicating a common understanding of talent within an organisation is critical to success. This will vary considerably between organisations, but it is important to be clear about: ‘what do we mean by “talent” and “what does talent management mean to us”.
Why talented people stand out We know talent when we see it – an artist, musician, dancer or sports person – but exactly what makes them stand out? Many talent identification processes consider what people do now – their performance – and what they appear to be capable of in the future – their potential. Cannon and McGee put forward a view based on a series of indicators, as follows:
High-potential indicators – what a highpotential employee looks like:
- Has the respect and trust of peers, supervisors and subordinates - Maintains a high level of competence in their role/job - Has a bias for action and is a proactive catalyst for change - Thinks and solves problems creatively and from a position of inquiry (versus advocacy) - Is open to constructive criticism and feedback - Uses critical judgement - Has a broad understanding of the organisation’s business and their role in achieving its goals - Has high capacity to learn. Has your organisation identified its “talent”? If it hasn’t, you don’t need rocket science; existing performance management processes are a good starting point. 9-box grids (see chart 1) plotting performance and potential and competency / skills frameworks offer powerful insights about the extent to which “talent” exists. If your organisation doesn’t know its talent, they certainly will.
Experiences that talented people value In terms of developing competence and capability, what type of experiences do talented people value most? My research and client experience leads me to the following:
- Exposure to leaders (including the top leadership team) throughout the organisation – being inspired, challenged and encouraged - Time to think at events – testing ideas, thoughts - Formation of peer groups across the organisation – keeping in contact with like-minded talent - Feedback on their performance – importantly how to improve - Learning new techniques – technical, presentational - Support and challenges from colleagues – as a team player and an individual - Prioritising and planning – balancing creative and practical attributes - External coaching and mentoring – creating self awareness, reflecting on different learning and developmental experiences
Chart 1: Talent mapping
High-performance indicators – what a high-
Improve strongly
Develop into Star
Star, role model
Improve
Focused development
Stretch
- Consistently produces measurable results above expectations - Self-manages in a manner that fosters learning and high performance - Ensures that team goals are achieved within ethical and cultural guidelines - Manages and leads teams that demonstrate a sense of loyalty and community - Strives to deliver and exceed customers’ needs - Arranges and leverages resources within an organisation - Has high resilience
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Potential
performance employee looks like:
Talent criteria • Competencies
New
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Motivate
Maximise contribution
• Results • Experience • Potential • Strategic thinking
Performance
Employee
Raymond Robertson Director, Strategic Reward 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.
- Greater involvement of / coaching by own manager – critical to post-programme, back-at-the-workplace life. Talented people can inspire others to strive for the top and this happens in all walks of life. Steven McRae, Principal Dancer of the Royal Ballet and Graduate of The Royal Ballet School, takes time out from his dancing to meet students at The Royal Ballet School – a wonderful opportunity for them to meet one of their leading role models. “Don’t be afraid to dream” is one of his key messages. That’s something the lost generation of young unemployed people in the UK need to be encouraged to do right now. How many business leaders, I wonder, provide inspirational experiences for their employees? The content of talent management programmes, of course, must be driven by organisational requirements. Examples of what’s run by three leading organisations in the pharmaceutical, financial services and food retailing sectors are set out in the “Talent Management in Practice” panel on the next page.
Managing clever people In their book Clever: Leading your smartest, most creative people, Rob Goffee and Gareth Jones look at talent management from a “clever people” perspective. Clever people really care and it shows in their teams, which are found in a wide range of organisational settings. Clever people are highly talented individuals with the potential to create
disproportionate amounts of value from the resources that the organisation makes available to them. So, every organisation needs clever people. Goffee and Jones set out “rules of clever engagement” which include:
Do….. Explain and persuade Use expertise Give people space and resources Set objectives Give people time Provide boundaries – agree simple rules Give recognition Encourage failure and maximise learning Talk straight Give real-world challenges
A final thought In its latest research, the CIPD found that “social networking is becoming more important, both as a driver and outcome of talent management programmes. As organisations become more fluid in terms of structure, people need to be able to work in virtual teams, form alliances across (geographic) boundaries and have easy access to knowledge and people. Contemporary talent management programmes provide a way for people to ‘bond’ with peers they would normally not have access to.” Talent definitely matters!
Top Tips - Clearly communicate the rationale for
Don’t….. Tell people what to do Use hierarchy Allow them to burn out Give orders Interfere Create bureaucracy Give over-frequent feedback Train Build an ivory tower Deceive It would be interesting to compare the views of “clever people” and those who manage them, on the basis of these dos and don’ts.
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-
-
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and objectives of your talent programme or pool Ensure participants’ expectations in a programme or pool are consistent with the expectations of the business Include effective development opportunities such as coaching, mentoring and networking Ensure selection criteria for talent management programmes are administered consistently and you have a strategy for those who are not accepted Make the selection process a learning event in itself and ensure all applicants have detailed and constructive feedback Agree valuable ways in which the energy of previous participants can be harnessed
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TALENT MANAGEMENT IN PRACTICE The three organisational examples here are drawn from the CIPD Survey Report “The Talent Perspective”, Summer 2010.
Barclays provides financial services to more than 48 million customers in over 50 countries worldwide. Barclays is a major global financial services provider engaged in retail banking, credit cards, corporate banking, investment banking, wealth management and investment management services with an extensive international presence in Europe, the Americas, Africa and Asia. Talent management: the context ‘We are coming up to our second year in talent using an enhanced approach. Later this year, we will be adapting our approach by strategically aligning talent and organisational plans to give us a comprehensive picture of where we are heading as a UK retail bank.’
The focus of talent management at Barclays, for the purpose of this research, is based on the B6 community (around 1,300 staff) and the Emerging Leaders Programme (200 participants). Participants in the Emerging Leaders Programme are selected using a ‘potential assessment tool’ based on drive, judgement and ambition, following line manager nomination. The programme, in its current form, has been in place for two years with four intakes a year. The programme lasts for eight months and consists of networking events, informal line manager coaching and formal training opportunities such as the Enhancing Management Capabilities course.
Astellas is one of the top 20 pharmaceutical companies in the world, employing 14,000 people globally, with a presence in 22 countries. As a young and forward-thinking company, Astellas is dedicated to improving the lives of people around the world through the introduction of innovative and reliable pharmaceutical products. Astellas Europe focuses on transplantation, urology, dermatology, anti-infectives and pain management. Talent management: the context
The talent management approach at Astellas is aligned to achieving their business philosophy, ‘Vision 2015’, representing Astellas’ goals and aspirations for the future. The new programme, recently embedded and part of a wider employee engagement initiative, ‘Employer of Choice’, a strategic priority for the business, is aimed at senior executives in the Europe, Middle East and Africa region of the business. It comprises the top 200 individuals within the organisation, based predominantly on grade and role. Individuals are selected to participate by a combination of HR and management team nomination and new hires/promotes in role are automatically guaranteed a place on the programme. Once identified as a member of the programme, individuals attend a residential course, ‘the leadership journey’, followed by coaching and the creation of personal development plans within the context of a 360 competency framework.
PizzaExpress is a well-recognised chain of Italian restaurants based in the UK. The first restaurant was opened in London in 1965 starting a tradition of excellent food and delightful service now offered at over 375 restaurants in the UK. Talent management: the context
The PizzaExpress approach to talent management is based on developing and retaining those individuals classified as top and lead talent, to ensure a leadership pipeline for the future, aligned to their corporate strategy. In 2008 PizzaExpress started its ‘Future Engage Deliver Programme’ with board members and in 2009 extended this to operational managers and functional heads – in total it covers around 100 people. The programme is six days, run in three sets of two days, largely focusing on building effective relationships, holding difficult conversations and the importance of engagement. The leaders help create the future of PizzaExpress and gain an understanding of their impact when they are ‘playing to win’ or ‘playing to avoid losing’. ‘At PizzaExpress we strongly believe that the success of the business rests firmly on the shoulders of every individual who works at the company. If people show up at work and do their best, the business thrives. If they don’t, the business suffers. That’s why talent management and nurturing our teams is such a critical focus at every level of the company.’ Julie MacDonald, HR Director, PizzaExpress S
References Goffee, R and Jones G, Clever: Leading your smartest, most creative people Bersin & Associates (2010) Enterprise learning & talent management predictions. Research report. Oakland, CA CIPD (Summer 2010) The Talent Perspective CIPD (2007) Talent management: design, implementation and evaluation
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Latest thinking
Customer Service
in Tough Times By Don Hales and David Physick
Introduction
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Effective leadership builds and sustains an environment where everyone understands how excellent service provides sustainable competitive advantage.
A little while ago, Don Hales, co-author of this article, dropped and inadvertently stepped on his spectacles. It was an everyday accident but most people who wear spectacles will know the problem of trying to go a few days without them. A return to the optometrist from where they were purchased brought no joy. It would take days to get them fixed and nothing could be done. There was an absence of empathy and no alternative solution offered. A visit to another optometrist in the same area brought a different story. Yes, they could do a quick repair, which would not look nice or be lasting, and they could also get a new pair made within two days. Since then the author has spent at least ÂŁ1500 at this helpful practice and recommended it to his wife, two adult married children and friends living in the neighbourhood. How much is a very satisfied customer worth? A great deal in this instance! You, too, will no doubt be able to recall similar experiences of being superbly served as a customer. Or not. What is it about some enterprises that sees them continually provide excellent service? As a result, even in these straitened times, their tills continue to ring and their margins are maintained. From work conducted by Don and David Physick of Glowinkowski International (GIL), the pivotal issue is leadership. Effective leadership builds and sustains an environment where everyone understands how excellent service provides sustainable competitive advantage.
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Latest thinking
organisation’s workplace and its service ethic far more than their other professional and personal attributes. The old phrase, ‘people join organisations but leave managers,’ encapsulates the importance of leaders’ engagement with their staff. The cost of poor engagement is huge - high staff turnover plus disengaged staff delivering poor quality service and damaging the reputation of the organisation. As competition intensifies and reduces margins, such costs can no longer be absorbed. Keeping things simple, one can generally say that 20% of an organisation will perform very strongly and 60% will perform acceptably. However, 20% will perform below par. If these staff are paid £12,000 per year, add-on costs could be a further 50%. Their poor performance is also reflected in the mistakes they make, e.g. wrong prescriptions, wrong orders, mistimed appointments, failure to build loyalty. These errors cost sales revenue.
The customer’s perspective
What drives service quality performance? All organisations serve someone, be that an end-user consumer, another business or an internal customer. In all situations, leaders set the tone of the workplace, which is achieved through their behaviours, which affect the ‘feel’ of their
Let’s shift perspective for a moment to consider what we feel when we are in the position of being the customer. One easy example to consider is when we are taking back a faulty item or complaining about the quality of service we have received. Does the person serving us have a sharp intake of breath followed by a slight gulp and the comment, ‘I will have to check with my manager’? The sen-
tence may be preceded by a terse ‘Sir’ or ‘Madam’. Or, does the assistant take charge of proceedings, apologise genuinely and sort things out to the extent that our anger turns to pleasure? Either situation reflects a dimension of what GIL calls ‘Organisational Climate’, meaning, ‘how it feels to work here’. Climate comprises six dimensions, see Table 1, and the example in the preceding paragraph concerns the dimension of Autonomy. It reflects the extent to which staff in an organisation feel they have the discretion to make decisions, particularly relating to customers, without referring the matter ‘up the line’ to their line manager. Autonomy does not mean a free-for-all, with staff ‘giving away the entire stock’. Autonomy means staff feeling they can make a decision but accepting that those decisions will be reviewed for appropriateness. For example, in one large hotel firm team members are ‘empowered’ to sort out issues for guests and may ‘spend’ £1,000 to do so. However, what they do is reviewed and discussed with their managers. Such interventions are oriented towards coaching, not reprimands. In another piece of work conducted by GIL with food scientists, practising scientists wanted their managers to manage them, especially in terms of providing development, but from the basis that they were subject matter experts, i.e. they still understood the science. So, as noted
DIMENSIONS
SUB-SCALES
ESSENCE STATEMENT
CLARITY
Long-term direction Integration Co-ordination
Well established long term direction People’s/Groups’ activities are well integrated Making progress toward long term direction
CHALLENGE
Innovation Achievement
Encouraged to try new approaches Stretched with goals that are challenging/realistic
CHANGE COMMITMENT
Motivation Adaptability Flexibility
Take action before being directed Minimum of unnecessary procedures A readiness/enthusiasm for change
AUTONOMY
Independence Accountability Effort
Does not always have to check/ask permission A feeling that the individual can make a difference Prepared to work beyond job remit
RECOGNITION
Reward Feedback Value & Appreciation
Differential relation between reward and performance Receiving effective feedback Feeling of being valued and appreciated
INVOLVEMENT
Commitment Trust Synergy
Committed to the team’s long-term direction Proud to be part of the team Whole is greater than the sum of parts
Table 1. The Glowinkowski International Limited model of Organisational Climate www.stakeholdermagazine.com
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Critical Success Factors
The three conclusions were: 1. They must understand how their organisation operates from ‘stem to stern’ and demonstrate this in the way they operate
Processes
2. They must understand how their organisation’s economics work by being able to articulate how good service builds value and poor service destroys value.
Strategic Objectives
Critical Success Factors
Critical Success Factors
Predispositions & Motivations
Organisational Structure
Behaviours
3. They need to be exceptional communicators.
Organisational Climate
Business Performance Figure 1. The Glwinkowski Integrated Framework
before, there is the marriage of skills and knowledge with behaviour, with the latter providing the real differential.
Service quality and leadership behaviours Any two organisations operating in the same sector can deliver markedly different performance outturns, primarily due to the difference in ‘climate’ in the two enterprises. Climate drives performance, but what drives climate? This is best depicted by a model called the Integrated Framework, (see Figure 1). The framework clearly positions leadership behaviour as a critical driver of Organisational Climate. The other two factors, Organisational Structure and Processes, are not discussed here, but see ‘Further Reading’. It is these behaviours that were codified and defined during the major research study conducted by the two authors. The research, comprising both quantitative and qualitative approaches, set out three major conclusions and then defined 16 behaviours that lay at the heart of being a superior performing leader in a senior managerial role in customer service, e.g. Customer Service Director, Customer Relations Director, Customer Experience Director.
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These points may seem obvious, but often it’s the obvious that’s overlooked. When articulated, these factors really do cause people to stop in their tracks and think about how they match up against them. With some prodding to gain an honest response, most will recognise shortcomings in some, if not all three. GIL’s research indentified 16 behaviours that differentiate the best performers from those who are merely acceptable. They overlie the manager’s skills, knowledge and experience, which should be regarded as the threshold requirements to operate in any sector, and highlight how a good manager can make most difference.
Behaviours vs. personality Kurt Lewin (1951), who is considered the founder of the school of organisational psychology (and who once remarked, “There is nothing so practical as a good theory”), defined the following ‘equation’:
B = f(P + S) where B is behaviour, f is function, P is personality and S is situation. This basically means “behaviour is a function of personality and situation”. Personality remains relatively stable through life, but can change when individuals find themselves in situations that require them to act ‘out of character’. To excess this can be a primary cause of
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work-related stress and some erratic behaviour may be delivered. The consequence for Climate can be considerable, e.g. leaders may be less willing to delegate, which affects the degree to which their team feel a sense of Autonomy. Therefore, leaders who understand their personality are far more likely to deliver the behaviours identified in GIL’s research. To clarify: if you consider yourself to be a more naturally gregarious individual who likes to be engaged with other people, how do you feel at the end of a day spent alone, for instance writing an important report? In contrast, if you are a quieter individual who has been constantly engaged with people throughout the day, how do you feel at the end of the work day? The former may wish to socialise in the evening in order to regain energy, whereas the latter will probably prefer time alone. Leaders have to undertake different activities and learning to do them competently and comfortably, regardless of personality, is a critical hall-mark of leadership calibre.
The leadership behaviours framework for senior customer service leaders Acting ‘out of character’ requires conscious effort, firstly by learning, then by practising and receiving feedback. The purpose of GIL’s research was to provide a comprehensive description of the behaviours that need to be delivered in order to create an environment or climate where service excellence is regarded as a competitive imperative. The framework is shown in Figure 2. The framework is split into two sections and includes four groups or clusters of behaviours. The upper section of the framework identifies eight behaviours that, if mastered, will see the customer service leader deliver a proficient level of performance. They represent the threshold of what is needed, i.e. they complement the faculties of skills, knowledge and experience. The eight behaviours in the bottom section of the framework identify those behaviours that, when mastered, will result in outstanding performance being delivered.
Latest thinking
Good Performance (Threshold behaviours) THINKING INFLUENCING T1: Customer/ Client Orientation I1: Engagement style T2: Systematic thinking I2: Customer/client influencing
ACHIEVING A1: Getting results A2: Investigative
SELF-MANAGING M1: Robustness M2: Orientation to excellence
Outstanding Performance (Distinguishing behaviours) THINKING INFLUENCING T3: Organisational awareness I3: Managing relationships T4: Strategic thinking I4: Inspiring change
ACHIEVING A3: Developing talent and capability A4: Innovative
SELF-MANAGING M3: Perseverance M4: Agility
Figure 2. Framework for leadership behaviours which drive customer service excellence
The four clusters of behaviour are labelled thinking, influencing, achieving and selfmanaging, which respectively relate to how leaders set out what they want their businesses to achieve, how they engage with others (suppliers, colleagues, owners, employees, customers), how they complete and accomplish plans and activities and how they manage themselves and their emotions.
cal relevance; although fastidious in design, the research does not address a real issue and can be construed as an answer without a question. Quadrant 4 is of particular relevance to readers of this article because it concerns using reliable evidence in a useful manner to support real-life decisions and actions. GIL’s work reported here falls squarely into quadrant 4.
So what?! Overall the work conducted by GIL and, in particular, this research led by Hales and Physick, rests or falls on its practicality and rigour. A neat little model shown in Figure 3 suggests research can be considered to fall into one of four domains (see https://www.glowinkowski.com/img/GRI/R esearch-for-performance.pdf for more on this).
High - Practical Relevance Quadrant 1 ‘Popularist Science’
Quadrant 4 ‘Pragmatic Science’
Low Quadrant 2 ‘Puerile Science’
Quadrant 3 ‘Pedantic Science’
High Methodological Rigour
Low Figure 3. Categorising the relevance of research
Quadrants 1 and 2 possess low methodological rigour yet are often made to sound as if they have substance and will deliver material benefit. Using such research as a guide to action would be as likely to prove successful as making a random, spontaneous choice. Quadrant 3 covers rigorous research with little practi-
Service leaders who expend the effort to develop the behaviours described in the framework will see positive results in terms of an enhanced Climate. As a consequence, these enterprises will outgun their competition through quality of service and financial performance. It is difficult to overstate the importance of providing great service to customers so that they genuinely enjoy the experience of dealing with your organisation. It starts with leaders delivering these core behaviours. A virtuous circle is established. When customers and staff are both treated well, both stay with the organisation longer and this leads to lower costs and increased business.
A real-life example Tower 42 in the City of London has a business model based on charging high rents in what is already a notoriously high-rent area. They provide their tenants with a fivestar hotel service from concierge, multi-lingual receptionists, chauffeur service, newspapers delivered to your desk, room service food (from Michelin star to sandwiches) as well as a choice of restaurants, several gyms, swimming pool, full secretarial and office services and a host of other services too numerous to mention. They have proved that you can charge a premium rate for great service but the service has to match the promise. In the 10
years since opening, they have consistently maintained a 95–98% occupancy rate, despite the fluidity of city tenancies in the difficult markets following 9/11 and the London bombings. Great service is not all about being five-star but it is critical that it is consistent and constant in its quality and this depends upon the organisation’s climate, which is set by its leaders’ behaviours. The behaviours defined in GIL’s research are those, when learnt, that will produce the climate required to keep your service ahead of your competitors and to WOW! your customers. S Further reading Glowinkowski S. It’s behaviour, stupid! What really drives the performance of your organisation. Available online at: www.itsbehaviourstupid.com Hales D, Williams D (2007) Wow! That’s What I Call Service! Penryn: Ecademy Press About the authors Don Hales After heading Sun Life Unit Services, which he and four colleagues launched and later sold to the Sun Life Group, Don launched the National Customer Service Awards in 1999 and remains involved today as founder and chair of judges. He founded the Customer Service Training Association in 2007 and now also heads Awards International, a company that recognises excellence in many activities, including sales, service, marketing and training.
David Physick With over 25 years’ experience in financial services, concluding with a global remit to improve service quality and brand reputation, David’s goal is to help leaders appreciate that their organisations are bristling with talent and its release is entirely dependent on their behaviours. Working with Glowinkowski, he has led the research and development of the behavioural competency framework for service leaders.
©Don Hales, World of Customer Service and David Physick, Glowinkowski™ International Limited
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October 2010 Stakeholder
37
Book Review
Harvard Business School Press
Authenticity What customers really want James H Gilmore & B Joseph Pine II
There is growing evidence that today’s affluent customer in developed economies has become more interested in quality of life (doing things) than material wealth (owning things). All the way back to Maslow, studies have shown that once the basic needs of food and shelter are met, extra material wealth does not necessarily lead to greater happiness. Much research has demonstrated that experiential purchases (doing) have brought people more long term satisfaction and happiness than material ones (having) since experiences are more central to a person’s identity than possessions. Experiences tend to be more favourably viewed as time passes and they have greater social value (in other words they are more interesting to talk about). In a Future Foundation study of 1,000 UK adults, almost 50% (and over 50% of baby boomers) chose personal fulfilment as their main priority in life, more than double the number that selected it 20 years ago.
the value of their paid-for experiences. One trait has risen to prominence: authenticity. How authentic is the experience? In the book the authors introduce the concept of perceived authenticity, or how a consumer experiences a product, service, environment, communication, or person. The concept applies to leaders being perceived as authentic by their staff as well as organisations by their customers.
In their 1998 Harvard Business Review article and 2002 book, Pine and Gilmore labelled this phenomenon ‘the experience economy’, suggesting that developed countries have transitioned not just from manufacturing to service economies but on a stage further. In experience economies, they say, suppliers should focus on providing customers not just with a product or service, but with a satisfying and memorable experience. Since then, they have been studying how consumers determine
Gilmore and Pine state that companies need to address the problem of managing “the perceptions of real or fake held by the consumers” because people increasingly make purchase decisions based on how real or fake they perceive offerings. These perceptions flow directly from how well any particular offering conforms to a customer’s self-image. And this is critical. Managers can’t be subjective about what’s authentic. What’s authentic to you may not be perceived as authentic by your customers. This is why co-creation is becoming an increasingly important concept in organisations’ ability to satisfy customers and build their loyalty. Obviously, if customers have co-created the product, the experience, the brand or the advertising, it will be perceived as authentic.
MANAGERS CAN’T BE SUBJECTIVE ABOUT WHAT’S AUTHENTIC. 38
Stakeholder October 2010
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COMPANIES CLAIM THEY WANT TO SAVE THEIR CUSTOMERS’ BEST INTERESTS, YET AT THE SAME TIME THEY WANT TO MAKE MONEY OUT OF CUSTOMERS.
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Although they acknowledge that it’s a desirable behaviour, the authors do not examine the authenticity of individuals in personal relationships. Much has been written about this elsewhere. Instead they focus on the perceived authenticity of organisations and their commercial offerings. Companies claim they want to serve their customers’ best interests, yet at the same time they want to make money out of customers (i.e. serve the company’s best interests). Is this credible? Can it be perceived by customers as authentic? Pine and Gilmore seek to solve this problem, extensively referencing previous research studies and using real company examples, especially Disney and Starbucks. They do an excellent job of making the book both academically sound, very readable and of real practical value. S
DATES FOR YOUR DIARY 3 NOT TO BE MISSED EVENTS
Engaging for Growth - Trouble on the horizon - the new challenges of engaging your people 12th & 13th October 2010, Renaissance Hotel, Heathrow, London A vital event for leaders and managers about managing and motivating people to deliver sustainable business and great customer service. Please visit: www.engagingforgrowth.com
World Class Customer Contact Forum 2nd & 3rd November 2010, Motorcycle Museum, Birmingham NEC The impact of social media on Multi Channel Service Delivery - getting the customer what they want, where and when they want it. Please visit: www.wccforum.co.uk
European Customer Experience World
ILS A T DE NG I COM N SOO
24th & 25th May 2011, Renaissance Hotel, Heathrow, London Please visit: www.ecew.co.uk
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