strategy & leadership
Stand and deliver - golden rules to
ensure consistent customer service
Steve Macaulay, Sarah Cook and Hilary Coldicott look at what it takes to deliver successfully
and consistently to the customer by effectively managing the customer delivery process, planning for
implementation; managing and measuring for continued success
I
t can be a frustrating business ensuring
that your organisation consistently
delivers quality to the customer. You
know words are not enough: “Words are
words, explanations are explanations,
promises are promises - but only performance is reality” said Harold Geneen, of ITT
who was renowned for his single-minded
focus on delivery of results. Studies indicate that nine in ten managers fail to fully
implement and deliver their organisation’s
customer strategies.
Tough operating conditions that mean
it is harder to make money today and has
led in some companies - mistakenly - to
cut back on service. So how do you retain
service delivery and profitability?
If delivery is not to let down a sound
customer strategy, serious attention must
be given to how to make implementation
a day-to-day reality. We can learn from
companies that meet changing customer
needs consistently to a high standard.
Dell operates in a highly competitive market, yet year in, year out leads
in profitable delivery to the customer. It
does this through what founder Michael
Dell describes as its competitive strategies
– speed to market, superior customer service, fierce commitment to performance
and latest technology and exploitation of
the Internet. First Direct stands out in the
world of banking because it makes a priority of consistent and personalised front-line
service which puts
the customer first, combined with
smooth execution. Tesco knows
how to make its service the envy
of the industry through well-honed
processes and disciplines which
start and finish with the customer in
mind. Fedex monitors its processes and
performance rigorously, and it shows this
to its customers by displaying a visible
tracking system to locate the progress
of their goods. It was the first to offer customers a money-back guarantee against
late delivery.
Larry Bossidy was formerly a senior
manager at GE, a company which has
relentlessly succeeded in producing results
for the customer and the shareholder. He
became CEO of a struggling business at
AlliedSignal. To turn it round, he spent
his first year increasing vigilance on the
whole process of delivery. In achieving the
resurgence
of the company, he
reflected that the most
important management
activity was massive
attention to getting things done. He
judged that the way to make this happen
was to focus on three interlinking areas
- strategy, operations and people. At first
he addressed the neglected area of people
issues - he spent 40 per cent of his time
on this, and it paid off. Later experience
showed it was necessary to keep unrelenting priority on standards of delivery.
Vodafone sees the importance of
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strategy & leadership
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operational
excellence as it faces
an increasingly harsh
environment many will
recognise: fierce competition, technology advancing,
requiring high investment,
growing customer demands
and shifting market dynamics.
What have these companies got
in common? Most importantly,
execution and improvement are
ingrained into the company
culture. Tesco makes all its
decisions using customer data, particularly that generated from its loyalty card
scheme.
Supermarket group Sainsbury’s so
badly implemented a new supply chain
strategy that in 2004 shelves were left
bare of products and customers deserted.
When the Royal Mail fails to deliver mail
to its customers, virtually every home in
Britain knows and is concerned about it.
Both organisations are now making some
progress in ramping up its standards of
delivery through a concerted effort to
improve every aspect of their organisations.
Our experience of organisations
with poor delivery shows a number of
frequently occurring symptoms:
Customer strategies are not clear,
November/December 2005
leading to overlapping and
conflicting priorities which
dissipate energy, resources
and focus .
Internal, not external attention dominates.
Insufficient measurement and monitoring of progress, followed by inadequate corrective action.
‘Fuzzy’ accountabilities and a lack of
ownership of customer issues by key
people, most importantly by top management.
Seven steps to service consistency heaven
On the basis of the hard-won experience
of strong deliverers, we suggest the following golden rules of service deliverythey sound such sense it is tempting to
gloss over them. If they make sense to
you, you will need to run a critical rule over
your organisation and note the weaker
areas.
1. Keep a grip on customer needs.
2. Stay listening.
3. Have clear accountabilities, goals and
priorities.
4. Set up regular measurement.
5. Invest in reward and recognition.
6. Develop capability.
7. Encourage active participation and
involvement.
1. Keep a Grip on Customer
Needs
Ivory tower management will rarely deliver
consistently strong results – you need to
be in touch with the issues for the customer and with the people who deliver the
service who can provide you with valuable
information. Even though he has worked
his way up over the years at Tesco, CEO
Terry Leahy and his top team periodically
spend time stacking shelves and finding
out first hand the issues in the business
and how to serve customer needs.
strategy & leadership
Ivory tower management will rarely deliver consistently strong results – you need to be in touch with the
issues for the customer and with the people who deliver the service who can provide you with valuable
information. Even though he has worked his way up over the years at Tesco, CEO Terry Leahy and his top
team periodically spend time stacking shelves and finding out first hand the issues in the business and how to
serve customer needs
2. Stay Listening
4. Set up Regular Measurement
Asda Wal-Mart insists that all of its managers regularly listen and get feedback from
their teams.
Setting up the right measures ensures
focus and incentive, as well as a means to
measure success and failure in key areas
and take corrective action. Sometimes
measures are too narrow. For example
some call centres focus on ‘efficiency’
measures, such as number of calls
answered, only to neglect all-important
service related measures.
Mike Bourne of Cranfield School of
Management is critical of relying only on
financial measures: “Financial targets are
too easy to manipulate. Tracking leading
non-financial indicators is vital to long term
implementation”. He cites Marks & Spencer who were making record profits in the
mid 1990s but took their eye off customer
satisfaction which was falling. Eventually
the situation was revealed as profitability
3. Have Clear Accountabilities,
Goals and Priorities
Linked with setting clear accountabilities
for the customer, with goals and measures,
is follow-up to check progress and manage
deviations from plan, taking early corrective action. This involves regular reviews at
defined milestones.
The structured Six Sigma approach to
continuously striving for defect free product and service minimises waste in every
sense and delivers high quality output.
Only a few organisations, notably Toyota,
have made this root-and branch approach
work in every aspect of the organisation.
started to fall. Bourne argues for use of
wide-ranging measures, believing it is necessary to build explicit links between the
major non-financial activities and financial
performance and manage any changes.
He says “Linking the activities, improvement plans and the financial plan enables
improvements to be tracked and budgets
properly validated”.
Kaplan and Norton’s Balanced
Scorecard has successfully provided
many organisations with a framework to
set up a ‘dashboard’ of measures to steer
their business, linking financial measures,
customer measures, process measures
and indicators of learning and continuous
improvement.
However, many companies do not use
the Scorecard to good effect. Critically, a
thorough process needs to be applied to
STAND AND DELIVER THE TESCO WAY
Tesco has sustained its growth path to
become the world’s third-largest retailer. It has
achieved this through its customer-focused
strategy and tightly managing its customer
delivery processes, using a steering wheel
Balanced Scorecard approach. Managers
at all levels keep a close eye on the focused
areas of customers, operations, people and
finances. Traffic lights warn of problem areas
and of successfully meeting stretching targets
in each of these four areas. Throughout the
retail operations, every store has its own
steering wheel, and staff members’ objectives
are linked to these and the overall strategy.
To keep key performance indicators on track,
a steering wheel group picks up its use,
examines issues, why they are happening and
what correction is needed.
Performance is monitored quarterly, not
just for the board but a summary is sent out
to the top 2000 managers to communicate
throughout the business. Senior management
pay is also linked to performance on the
steering wheel.
The steering wheel reflects the company’s
customer first values and philosophy. Simple
key messages act as focal points of attention
within the overarching core purpose ‘to create
value for our customers and to earn their
lifetime loyalty’.
For example, the big messages on the
steering wheel are:
Customer: delivery of Every Little Helps to
the customer.
Operations: better, simpler, cheaper - the
way we work.
People: delivering a Great Place to Work for
our people.
Finance: we’ll deliver the Finance quadrant
if the other quadrants meet their targets.
Tesco operates a listening policy through
its TWIST (Tesco Week In Store Together)
programme where senior managers go to
the shop floor to find out the impact of their
policies.
Development is a key target: on average
retail employees receive more than 4.5 million
hours of training, largely in-store. Training is
split into basic and specific (Bronze), product
knowledge or stock processes (Silver) and
expertise in their field (Gold).
A scheme called Options develops shop
staff with management potential.
Overall, the culture is one of restless
energy and improvement to benefit the
customer. Terry Leahy, the managing director
continually exhorts staff not rest on their
laurels and to behave as though they were
number two in the market place in the UK,
not number one.
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strategy & leadership
SEVEN GOLDEN RULES
In summary, successful businesses have
common, underpinning ways which we have
translated into seven golden rules for delivering
reliably to the customer:
1. Keep a grip on customer needs.
2. Keep listening.
3. Have clear accountabilities for the customer,
with goals and priorities.
4. Set up regular measurement.
5. Invest in reward and recognition.
6. Develop capability.
7. Encourage active participation and
involvement.
ensure these measures are part of the way
of managing. Customer measures can
easily take a back seat. Jan Carlzon,
when chief executive of SAS,
nearly 20 years ago noticed ‘a
(cargo) shipment could arrive
four days later than promised
without being recorded as
delayed’. Many companies
have still ‘caught themselves in one of the most
basic mistakes a serviceoriented business can
make’ by measuring the
wrong things instead of
what matters in the eyes of
the customer.
5. Invest in Reward and
Recognition
Recognise and reward people who are
making progress in the direction you are
heading. The most common demotivator
we hear is that the manager ‘is always too
busy’. Reward and recognition help to
keep up morale which can dip and slow
AUTHOR INFORMATION
68
Steve Macaulay, Sarah Cook, and Hilary Coldicott are
consultants who specialise in the development of managers and organisations to achieve change in a customer-focused way. Steve Macaulay is at Cranfield
School of Management, Sarah and Hilary are from the
Stairway Consultancy. They are the authors of ‘Change
Management Excellence’, published by Kogan Page, price
£16.99. They can be contacted through Sarah Cook at
the Stairway Consultancy, on 01628 526535 or email
sarah@thestairway.co.uk
November/December 2005
progress when the going gets tough.
6. Develop Capability
Chris Bones, principal of Henley Management College feels much more attention
should be given to developing those who
implement a strategy: “If you equate talent
management only with high potential for
leadership positions you are focusing on a
very small proportion of people, ultimately
not the people who make the difference to
your ability to execute well.”
A number of leading organisations are
benchmarking their climate and people
practices through the Great Places to Work
organisation.
7. Encourage Active Participation
and Involvement
Long term delivery to the customer will
not be successful without the active
involvement of those affected. This can be
achieved through persistent and thorough
approaches which extend throughout the
activities of the business:
Continuous Improvement – process
innovation.
Two- way communication.
Involvement in the business.
Teamwork.
Over five years, the charity Guide Dogs
for the Blind successfully moved from a
bureaucratic institution focused solely on
training and a provision of guide dogs, into
a modern and efficient disability charity
helping improve mobility for blind and
partially sighted people across the UK.
The key to its transformation has been
well-thought-through communication and
development processes, encouraging staff
involvement as the charity develops new
areas, including training and rehabilitation
programmes.