Organisational design, development and change
How can I help?
By Carolyn Boyd
10 December, 2011
Customers demand more and are more savvy than ever before, and HR has an
important role to play at the front line of customer service. By Carolyn Boyd.
BEFORE Virgin Australia chief executive John Borghetti took over the reins, he spent
three months flying around the network.
“Every opportunity he got, he would stop and talk to cabin crew, pilots, check-in
staff and engineers, and he would listen,” says Virgin Australia’s group executive
people, Richard Tanner.
Behind the scenes, the airline has been undergoing a major revamp, overhauling
the experience offered to its customers. Everything has changed from staff
uniforms to the food served on its planes, and the addition of a business class.
“There is nothing the same about this airline today compared with two years ago,”
says Tanner.
The revamp is still in progress, to be completed next year. About 60 per cent of the
changes can be traced back to the diary notes and comments that Borghetti made
as he travelled around the nation, listening to front-line staff.
Tanner says customer service is Virgin Australia’s real business as it flies 20 million
people around each year, and the staff members delivering it heavily influence the
quality.
“Virgin Australia will only ever be as good as the sum of its front-line staff and it is
absolutely essential that we as leaders never lose sight of that,” Tanner says. “As
weird as it sounds, I am a servant of our front-line staff.”
Across industries of all shapes and sizes, customer experience is emerging as the
key distinguishing factor that will determine, for example, how many widgets a
business sells, or how many haircuts, loans or car washes it gets to make.
“The new marketplace is dominated by mobility,” says entrepreneur Kevin Panozza,
who started the contact centre company Salesforce in 1993, and grew it from 20 to
5000 staff before selling. Panozza is now CEO – chief engagement orator – at
another contact-related start-up, Engage.
“Customers have a smartphone, an iPhone or a BlackBerry. They can go online,
they can compare prices, they can look at any deal on the planet, and they can go
to a store in another country. They can look at what other people say about a
product or service.
“Because someone can now put something on YouTube or on Twitter and it goes
viral and then suddenly hundreds of thousands of people are trashing the brand
collectively, companies are having to go, ‘wow, suddenly the consumer is not this
one little idiot that we can just dismiss and throw out the front door and never
hear from them again.’”
Information that was denied to consumers just a few years ago is now freely
available. For manufactured goods, Australia’s high dollar is making it cheap to buy
from overseas, and one-click payment systems such as PayPal have streamlined
the financial side of the transaction.
On top of this, group-buying sites offering low-cost deals for everything from
haircuts to meals out are eroding brand loyalty. And buying and selling platforms
such as eBay have evolved from householders hocking off second-hand bikes, to
companies overseas selling directly to Australian consumers.
Customer experience – not customer service – has never been more important,
says Panozza, who argues most companies still don’t get how central customer
experience is. “Companies with incredibly valuable brands all use people to talk to
their customers and those people are typically underpaid, poorly trained [and]
badly managed,” he says.
“But when you think about customer experience you only have to answer one
question Do I want my customers talking to a happy, engaged employee who loves
coming to work or do I want my customers talking to frustrated, angry employees
who hate coming to work? Customers are won or lost in these conversations that
are being held between the company and the customer.”
Ian Williamson, professor of human resource management at Melbourne Business
School, agrees: “The way you treat your employees is the way they treat your
customers.”
And where it really matters is the discretionary activity that employees engage in –
their willingness to go beyond what is expected of them to uncover and fulfil
clients’ needs.
Panozza is predicting a big switch. “Banks, in particular, will be the first to realise
this; they will begin to move away from that economic rationality and they will
begin to put more highly skilled people on phones and in counters to build longterm relationships with customers based on trust and mutual benefit, which
includes not making them wait,” he says.
Williamson sees great opportunity for HR professionals to boost customer service.
The big money, he says, is in fixing problems before they arise. HR people need to
move from being reactionary – trying to solve customer experience issues – to
anticipating them.
“HR needs to be playing a role upfront and saying ‘well, what’s our work
environment right now? What changes do we want to make?’” he advises.
It’s not enough to measure engagement scores. “Engagement scores for the sake
of engagement scores – nobody cares about that,” says Williamson. Instead, you
need to show the link between employee engagement and customer experience,
using data from your own company. It should highlight, Williamson says, why it is
that one group of the business is doing better than the other in terms of its client
engagement. Questions to draw out include how is that correlated statistically with
engagement scores.
And how is it linked with the time the managers in the group are spending,
speaking with, and coaching, their employees?
Staff engagement, Panozza argues, has “nothing to do with money”. “Some of the
most highly paid employees in companies are disengaged. It’s more about creating
an environment where people like coming to work.”
But pay should be seen as fair, Williamson says. “Having some level of
transparency around how payment decisions are being made increases the
satisfaction [for staff].”
It’s also important to keep jobs interesting. “If you think about a good video game,
people play them for hours and hours because they’re high in intrinsic rewards,
you have a challenge, you have autonomy, you have identity, you have variety,”
says Williamson.
Panozza – who won three Hewitt Best Employers in Australia and New Zealand
awards while heading up Salesforce – says companies need to change the
behaviour of middle managers, listen to employees, communicate with them and
recognise them. “It’s all very simple,” he says.
While it certainly does sound straightforward, staff engagement is not always easy
to achieve. Virgin’s Richard Tanner admits: “I’m not sure that our engagement
scores are as high as the public would think they are because ours is a very difficult
brand to deliver on its expectations internally.”
“The Virgin brand globally says that this is an organisation that has lots of fun and
lots of freedom and you can make your own mark, but when it comes down to it in
reality, this is about running an airline in a very tough economic environment
where for three or four years past we’ve had nothing but a dreadful external
environment both from the mother nature point of view and economically, and
we’ve come out of 18 months of loss.
“That has an impact on how you feel inside your organisation and so, as inside a
family at times, you can feel frustrated and not necessarily as upbeat. But then as a
deliverer of a customer service to the customer outside, we make sure that is not
what the customer sees.”
It’s all about communication, and listening, says Tanner. “Staff know that we will
work together behind the scenes to sort all that out. It’s not something that we’ll do
in the public arena.” Virgin Australia has quarterly road shows, aiming for senior
executives to meet at least a third of the staff each time. There’s also an annual
survey of staff and, for cabin crew, monthly unplugged sessions where employees
get to raise their concerns.
As well as an internal communications team pushing out news at Virgin Australia,
there is an open door policy among senior managers. “If any of our staff email us
we will get back in contact with them, if not within the hour, generally within the
day and people know that’s genuine,” says Tanner.
While Tanner occupies a seat at Virgin Australia’s executive table, he argues it’s not
necessarily needed to enact change. “Just being appointed to the senior table won’t
make the HR function any more or less effective,” he cautions.
“What HR functions need to do is really ensure they understand what it is their
company is trying to deliver, what the product is and who the customer is and
ensure then everything they provide is with minimum possible bureaucracy and
with maximum possible flexibility, lowest possible cost and shortest possible
timeframe back to the business. If HR functions do that then their voice will be
heard. If what they intend to do is keep saying ‘oh look, you know, I can’t do my job
really because I’m not right at that senior table’.
That’s a bit of a cop out.”
NAB
Think NAB and you might think branch closures, a detachment from customers
and economic rationality. That’s if you’ve got a memory that stretches back nearly a
decade. These days, the bank is doing things differently.
Ann-Marie Chamberlain, dean of sales and service in NAB’s organisational
capability team, has a remit to develop the right organisational capabilities to
deliver great sales and service.
“I think about it in terms of the service profit chain … happy staff means happy
customers, means happy shareholders,” she says. “Clearly we need to ensure we’ve
got the right people in the right roles and that they’re adequately trained.”
Chamberlain spends a lot of time trying to understand the issues facing staff.
When she identifies a gap, she engages a working group to explore the impact on
different business units.
The bank has lifted its staff engagement scores and they now sit above the average
for financial services organisations around the globe.
IINET
Managing 2000 call centre staff over four countries and seven facilities isn’t easy,
but telco iiNet has a few tricks up its sleeve. They include measuring every single
customer interaction to gauge how well the company is meeting its customers’
needs, rewarding excellent service with bonus pay, measuring staff engagement
twice a year, taking monthly surveys to highlight any issues, embedding staff into
overseas offices for months at a time and getting the leadership team on the road,
out to visit call centres that stretch from New Zealand to Australia and South Africa
to the Philippines.
“As you can imagine it’s a complex environment to deliver a customer service and
good customer service no matter where the call goes through to,” says iiNet’s HR
manager Caitriona Hayes.
iiNet has won a swag of awards, including the 2010 Customer Service Institute of
Australia’s National Large Business of the Year Service Excellence Award.
Source: Boyd, C. 2011, ‘How can I help?’, HR Monthly, December, pp. 20-24