Epilogue: Has there been any change in UK Banking culture?

On 7th December last year I wrote a piece about the culture of the UK banking industry.  A link to the full article is here: Has there been any change in UK Banking culture? And will there be in future?

I stumbled on the following quote this afternoon and was immediately reminded of what I'd written previously.  It articulates well the direct and inextricable link between leadership behaviours and the culture of an organisation.  The example has to come from leaders and filter down through the organisation. 

"Our efforts to inculcate core values is failing because as an institution we have lost the ability to set a proper example at every level of the chain of command, those below are losing faith in those above. Without this trust, loyalty is impossible. We are left with slogans and lesson plans, the dry shells of concepts that should be the life blood of our organisation.”

US Marine Corps Matthew Jones

Naval Institute Proceedings 1997

Ultimately my conclusion remains unchanged: The prize is enormous for the bank that shifts its culture, and sustains it, but the size of the challenge facing leadership is also enormous. And so far it's been too big.

LinkedIn: http://uk.linkedin.com/in/timhadfield
Twitter: @accordengage
Telephone: 0044 07906650019

The value of good deeds in a naughty world

I did a lot of reading during the Christmas and New Year break and some of the stuff I read really stimulated my thinking.  One article particularly resonated with me - and I wanted to share it with you in my first post of 2013. 

It was entitled 'Why kindness can help businesses grow' and was essentially about Henrietta Lovell, a UK based entrepreneur who is gaining quite a reputation as she grows her business: the Rare Tea Company.  It tells the story of how, after an experience of drinking a wonderful tea in Hong Kong, she began to question the quality of the big brand teas available in UK supermarkets and realised that the tea she had fallen for in Hong Kong was simply not available in the UK.

She travelled to tea-growing places in China and Africa, and "fell in love with tea and the people who grew it."  And as a result she started her Rare Tea Company to sell some of the enticing teas she bought straight from the growers in exotic places.

Much of the rest of the article details how, as a result of extraordinary acts of kindness, she has been able to rapidly grow the Rare Tea Company brand and her own reputation.

The author of the article, Peter Day, then goes on to comment on the "business of kindness", as he calls it.  He writes:
"Why shouldn't this be another way of doing business, far removed from the brash competitiveness that businesses think they are all about? There is, surely, far more to running a company than the preposterous cut-throat competition of the TV challenge show, The Apprentice.

Why can't businesses be run with a generosity of spirit and a lot of goodwill? Henrietta Lovell says it can be done, but hers may be just a good deed in a naughty world.
I would like to think not. It may be the start of a trend. Companies have got away with nominal good behaviour for years. They do what their lawyers and their marketing people tell them they are obligated to do, and nothing much more.

As the banking crisis demonstrated, they did what they could get away with, driven by what they maintained was the interests of their shareholders, and the bosses revelling in the status symbol of their bonuses.

Now blinking in the glare of publicity - businesses may be waking up to other, more deep-seated, obligations. Good people may in the end decide they do not want to work for inhuman or merely operationally effective companies. They will want more from work than pay and promotion. They will want to be nice. They will want the organisations they work for to be kind.

That is what customers are discovering they want, too. They want to deal with businesses that work in decent ways, that reflect their own feelings about the world."

There's no doubt in my mind that he's right.  This trend has been underway for some time already, and I'm convinced it's going to accelerate in the coming years.  It's the big opportunity for businesses that respond to it, and a huge risk for those that don't.

Peter Day goes on to write: "It would be nice to think that the business of kindness will not be captured by professional marketeers and become just another device for paying lip service to how people think business ought to behave.

It would be nice to be un-cynical about it. It would be nice to think that kindness is a way of doing business that might infect lots of big business rather than just a few pioneers."

I guess we'll see.....

The full article can be found here: Why kindness can help businesses grow

LinkedIn: http://uk.linkedin.com/in/timhadfield

Twitter: @accordengage
Telephone: 0044 07906650019

When an upgrade backfires!

I was away with my family last weekend, visiting the excellent 'Festival of Angels' in York - highly recommended for anyone seeking an enjoyable pre-Christmas experience in the north of England!

Indeed, it was so popular that despite extensive searching I was unable to find a hotel room in York and ended up pre-booking at the Marriott Hotel in Leeds.  Even then I had to book two double rooms as all their family rooms were booked.

It was a bit of a surprise then that after checking in, getting the lift and walking into the first room I found it had two queen size beds in it - it was the family room we'd initially requested.  And the surprise grew when my wife opened the door of the second room and that too was the same, another family room!  My first thought was that we would after all be able to spend the night together in one room - good news!  But that was closely followed by confusion - was it a mistake, had we been given the wrong rooms?

So I went back down to reception to ask them to clarify.  When I asked the manager (I think) at reception he confirmed that the rooms were correct and that we'd received a complimentary upgrade.  My initial reaction was to explain that we'd just use one room, at which point he interrupted and said that we must pay for the two rooms booked.  From that point I think the value of the conversation deteriorated.  It went something like this:

Me: "But when I initially tried to book a family room your website indicated that none were available and the only way you could accommodate me (and my family) was in two separate rooms."
Him: "That was probably the case at the time sir."
Me: "But what's the point in giving us two family rooms when we clearly only need one?"
Him (looking confused): "Because we've upgraded you sir."
Me: "But I don't want one of the rooms.  What I wanted all along was one family room."
Him: "As I've already said sir, you will have to pay for both rooms."
Me: "I will pay for them, but that's not my point.  My point is, why give me a further room that is of no value because it'll be unoccupied?"
Him: "That's your choice sir but it was an upgrade."
Me: "But it's of no value, and to be honest I'm now starting to feel conned into buying a room I don't need."
Him: "We haven't conned you sir.  This is how hotels work, we allocate rooms based on what works best, for the customer and the hotel.  It's about various things, room availability, location of the rooms - you wouldn't want to be woken in the middle of the night, and so on."
Me: "But why did your website indicate there was no family room available?"
Him: "there can't have been at that time."
Me: "That sounds questionnable to me - that two family rooms suddenly became available."
Him: "That must be the case sir."
Me: "In which case I don't understand why nobody rang me to ask whether I'd like to switch from two double rooms to one family room."
Him: "That's not how we work sir.  it's not up to us to do that."
Me: "Well if you'd checked your records you'd see that whenever I have stayed in a Marriott hotel I've always stayed in a family room."
Him: "You don't understand how hotels work sir."
Me: "Obviously not.  You don't get why I'm frustrated do you?"
Him: "No, not really sir, we've upgraded you."
Me: "Let me explain.  Imagine you wanted to hire a car for your family of four.  You ring the car hire company and they tell you that they don't have a four seater but you agree to take two two seaters instead.  Then, when you arrive to collect the cars they give you two four seaters.  How would you feel?"
Him: "It's really not the same sir.  Hotels are car hire are completely different."
Me: "No it's not, the principle is exactly the same!  I'll pay for the two rooms but you need to know that you've turned a loyal customer and advocate into one who is really unhappy with Marriott."
Him: "It's not me sir.  I'm just applying the rules."
Me: "And the fact that you're now abdicating responsibility for this makes it even worse.  Anyway, I want you to know how disappointed I am because I do feel conned and because you just don't seem to follow why."
Pause.....
Him: "I'm sorry about that sir.  On this one occassion, and as a gesture of goodwill I will release the other room.  But I wouldn't be able to do it again next time."

And at that we concluded the discussion.  Him clearly frustrated that he'd lost income on a room and me equally frustrated that he couldn't understand my logic, or at least wouldn't accept it.

The rest of the stay was good.  The room was great, the beds were very comfortable and we had a delicious meal in the restaurant.  But I still felt disappointed and frustrated with the overall experience - and still do. 

I'd assumed that upgrades were always a gesture of goodwill from the supplier, designed to be for the customer, providing added value and benefit for them - at no charge and for their convenience.  Perhaps that's not always the case.

Has anyone else had unwelcome, inconvenient or no added value upgrade experiences?

LinkedIn: http://uk.linkedin.com/in/timhadfield

Twitter: @accordengage
Telephone: 0044 07906650019

Has there been any change in UK Banking culture? And will there be in future?

I've blogged several times before about the predominant culture of the banking sector.  About short term thinking driving pursuit of targets at all costs and resulting in a culture that at best takes customers for granted and at worst results behaviour that blatantly takes advantage of them.

I last wrote about it here: http://everythingengagement.blogspot.co.uk/2012/09/big-banks-customers-complain-every.html in September, following the release of statistics suggesting that the banking industry as a whole receives a complaint every 7 seconds!

More bad news today for the 'Big 5' banks following the release of a report by consumer watchdog 'Which?' that suggests the 'sell at all costs'culture is if anything getting worse rather than better.  The report said:
"Which? interviewed branch and call centre staff from the five major banks – HSBC, Royal Bank of Scotland, Lloyds Banking Group, Barclays and Santander. Our research revealed that two-thirds of bank staff who have a sales role and sales targets say there is now more pressure than ever to meet those targets."

It went on to say that:
"The dominant sales culture in Britain's banks is encouraging mis-selling, almost half (46%) said they knew colleagues who had mis-sold products in order to meet targets. Four in 10 felt they were sometimes expected to sell even when it was not appropriate for the customer."

This echoes feedback I'm receiving from contacts I have in the industry.  They tell me that whilst PR and marketing is focused on rebuilding trust with customers by telling them their bank has changed, the reality internally is that banks are more profit focused than ever and that achieving ever increasing sales targets is absolutely critical.

I don't expect banks to change their culture overnight.  It can take a long time before the culture of large organisations changes.  But I would expect to be starting to see some changes by now.  After all, these issues have been on the agenda for at least two or three years now.  So why isn't change  happening? 

Culture change also requires strong leadership and consistent and aligned actions over a prolonged period.  What the Which report seems to illustrate is a lack of alignment - a view that reducing incentives will prevent the problem.  In reality though how people are incentivised is just one of the factors and evidently the benefits of those changes are outweighed by the pressure to meet sales targets.  The report indicates that two thirds of those who took part in the survey say they are "sometimes or always told to sell more."

I believe that the banks' failure to achieve change comes down to two things:

1. An inadequate understanding of the factors causing the problem.  What this also suggests is an inadequate understanding of culture.  Leaders in many organisations look for a quick fix lever they can pull to resolve a problem, not appreciating that the culture of their organisation is caused by complex, inter-connected and concomitant factors.  Looking at them in isolation is the wrong thing to do.
2. Inadequate leadership.  Let me be clear on this one.  I am NOT suggesting that the leaders are inadequate per se but I AM expressing my view that their leadership of the culture change is inadequate.  Different skills and behaviours are required to lead change than to lead steady steady state.  It requires a different focus.  And it means priorities have to be reconsidered.   Unfortunately the existing business model, focused on short term financial performance and the generation of shareholder value, is so deeply embedded that these short term requirements are in conflict with the longer term and strategic changes required.  And the short term is winning.

The size of the prize is enormous for the bank that shifts its culture, and sustains it, but the size of the challenge facing leadership is also enormous.  And so far it's been too big.

LinkedIn: http://uk.linkedin.com/in/timhadfield

Twitter: @accordengage

Telephone: 0044 07906650019

If more is good, should the pursuit of engagement ever stop?

More is good.  I think that's how the saying goes.

It seems like we live in a world when the pursuit of more is still generally seen as good.

We buy cars that have a capability way in excess of what we're likely to use.  Why is it important that my car is apparently able to accelerate from 0-60mph in 6.5 seconds and has a maximum speed of 143 mph?  We want devices that have more storage space than we're ever likely to use - my MP3 player can apparently store in excess of 10,000 songs!  We always seem to want more money in our bank account, quicker speed on our processor, shorter cooking time in our microwave.  This list could go on...

Why is it important?  I've come to the conclusion that it's all about 'just in case'.  I want a high performance car just in case I need to use its capabilities to get my out of a tight spot, I want more space on my MP3 just in case I want to add lots more songs.  I want more money to protect me from unforeseen circumstances, shorter cooking times just in case I'm in a rush etc.  By the way, I'm not writing about this because I think it's a bad thing, that's up to individuals to decide, but I am interested in how this belief might apply to engagement. 

I wonder if it does apply to both customer and employee engagement.

Thinking first about customers, is there an optimum level of customer engagement?  Is there a level which is 'good enough' and anything beyond this is a waste?  And can any excess go into storage for potential use at some time in the future?  Similar questions I guess for employee engagement.  Is there an optimum level of employee engagement?  Can an organisation ever have too much and if levels are higher today than is needed can it be saved just in case it's ever needed?

Does the pursuit of higher levels of engagement ever end?  Is there a point at which it's about maintenance rather than development?  Given the austere times in western economies cost is clearly a consideration so is it worth investing more trying to achieve tiny increases in engagement?  And how should any organisation determine what an acceptable investment is?

For me the answer depends on an organisations vision i.e. where they are going and what they want to achieve in the future.  The engagement strategy then needs to support delivery of those things.  It's obvious, isn't it, that engagement should be in support of something rather than something that is pursued in isolation just because it's a good thing to do.  Shouldn't it always be about getting a return?

Are the objectives for your engagement programme clear and aligned to deliver the strategy for your organisation?

LinkedIn: http://uk.linkedin.com/in/timhadfield

Twitter: @accordengage

Telephone: 0044 07906650019

Customer #Experience, Customer #Engagement - it has to be about more than Customer #Service

In my last blog entry I proposed definitions of the phrases "customer service", "customer experience" and "customer engagement".

In summary, I suggested that:

Customer Service ...
is what an organisation does when delivering its products and services to customers, and how it does it. 

Customer Experience ...
is about how customers feel as a result of the service they receive. 

Customer Engagement ...
is the outcome an organisation wants as a result of the service they deliver and the experience the customer has.

I also suggested though that customer experience and engagement can't be delivered through customer service alone.

To expand on that .....in my view every customer experience, and the degree of engagement each customer feels with a brand, is influenced by two things other than customer service.  First, the fact that every customer is influenced by their previous experiences.  These could be:

• Experiences with the same brand - which create expectations for the future which, if not met, result in a negative experience.
• Experiences with other brands - which also create expectations.
• The experiences they have had that day (and perhaps longer than that) which influence how they're feeling beforehand.  To illustrate this point, have you ever had an argument with someone and been in a bad mood before receiving a service?  And did it affect how you felt about the service you received?

All of these things affect customer experience.

Second, the customers' perception of the brand, and therefore whether they are positively or negatively disposed towards it, influences their experience and their level of engagement.  It's entirely possible that the degree of engagement a customer has can be impacted by adverse media coverage, social media, peer group feedback etc, all of which may influence a customers disposition.  They influence a customers perception of the organisation and thus the relationship they have with it.

The implication for every organisation is that influencing customer experience and customer engagement has to be about more than just customer service.  It has to be about building relationships.

LinkedIn: http://uk.linkedin.com/in/timhadfield

Twitter: @accordengage

Telephone: 0044 07906650019 

What should your business focus on - customer service, customer experience or customer engagement?

Work I've been doing with a client over the last two or three months has meant I've had lots of conversations with senior managers.  During these conversations I've noticed they use the phrases "customer service", "customer experience" and "customer engagement" interchangeably, seemingly without any clarity about what they mean or indeed whether they are different. 

If they are going to improve any of these things I think it's important they develop their understanding.  So here's how I suggested they think about the similarities and differences:

Customer Service ...
is what an organisation does when delivering its products and services to customers, and how it does it.  Clearly it's hugely important. It needs to be planned so that delivery is efficient and effective. Efficient so that the costs of delivery aren't higher than the business can afford, and effective so that it evokes the right feelings in customers.  Customers may talk about the service they receive but in reality what drives them to comment at all is how they feel as a result of the service.

Customer Experience ...
is therefore about how customers feel as a result of the service they receive.  So what are feelings?  They are bodily states that are caused largely by chemistry (hormones).  They usually have related thoughts and ideas which can be used to label them, define them and express them, but are themselves bodily states. 

It's also worth remembering that feelings start with the five senses: sight, hearing, touch, smell and taste.  So what the customer sees, hears, feels, smells and tastes impact their experience.   That's why businesses recognised for superior customer experience think about how they deliver multi-sensory experiences, positively stimulating as many of the senses as possible in every intereaction.  Because  customers have an experience every time they interact with the business.  Indeed, they can't not have an experience.

Customer Engagement ...
is the outcome an organisation wants as a result of the service they deliver and the experience the customer has.  It results in the customer feeling a sense of trust, commitment and loyalty which
means they are more likely to buy its products and services. 


That's how I suggested they think about it and it's already brought a greater clarity to the conversations I hear and to their planning.  They realise that when they previously talked about customer experience or engagement, what they really meant was customer service.  They understand now that their objective is customer engagement.  And they know that in order to develop it they need to think more broadly about the what and the how of their customer service.

But this isn't the end of the story.  Because we've also talked about how customer experience and engagement can't be delivered by service alone.  More about that next time....

LinkedIn: http://uk.linkedin.com/in/timhadfield
Twitter: @accordengage
Telephone: 0044 07906650019