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Competency, HR Strategy, Innovation, Lean Six Sigma

Beyond HR Data Analytics – Competencies HR Professionals Should Possess

Given today’s need for HR professionals to be strategic business partners, to be a ‘Voice of Conscience’ to the CEO as well as champion for the employees. Those with background in proven management methodologies and tools have a great advantage. HR Professionals who can present their business case for HR strategies and interventions with a compelling return on investment, supported by rock-solid data, will be well respected and regarded. Understanding and using HR data analytics including basic statistics to convey messages goes a long way. Making proper use of HR data may help to identify drivers for staff satisfaction, staff turnover or staff engagement.

Leadership, Operations

Banking – A Productivity Gold Mine

When I joined General Electric Capital fifteen years ago, I asked them why they would hire an engineer with no prior banking knowledge. The answer was quite a pleasant surprise: “We have enough people who understand banking. Unfortunately, we do not have those with a process mind-set.”

To assume that banks have changed since then, might be baseless. For me, banking is the real productivity gold mine. Here is a snapshot of some of the questionable activities that banks have been engaging in recently.

Case 1: How to Avoid Killing Trees in Sumatra?

Bank A did never impress me with their service. Therefore, I stopped using their credit card one and a half years ago. For some reason, there was still a balance on my credit card account. Unfortunately, this amount is negative, i.e. my credit card shows a small amount of savings. For eighteen months, I received monthly statements showing this negative amount. They even included a form and envelope with payment instructions. I am tempted to send them a negative cheque trying to stop this. I guess this won’t work. In the meantime, we have wasted a considerable amount of wood in Indonesia, for nothing. Is this necessary?

Case 2: How to Confirm the Confirmation?

We know banks like papers – and so does Bank B. You can send thousands of dollars to any address in the world via online-banking, but for updating your mailing address you need paper. Since we know this seems to be a critical step for any bank, we play good citizen and march into a branch – my wife and I. The nice lady at the counter copies our IC, takes note of our new address and we leave. We assume we are done – quite happy with our achievement – until we receive a letter from Bank B asking us to confirm that we have changed our address. I guess my face and my IC are not enough. We are considering getting the president to sign. This should do. Or would it?

Case 3: How Premium is a Premier Customer?

Having a customer relationship manager is good. Being a premier customer to the bank seems to be even more prestigious – unless you want something from them. I placed a request for online banking access for my son at Bank C before Chinese New Year. Assuming many of the staff went home for two weeks we gave them until mid-March. Nothing. Then after some weeks, I walked into a branch to place another request. The staff at the counter promised to take care of it. Nothing again. On 05 April, I dropped a mail to my Premier customer relationship manager who replied “I will personally see what can be done on this tomorrow for you.” Guess what – nothing so far. Why don’t they tell me if this is something they cannot solve?

Case 4: How Good is the Information on a Bank Statement?

The first time I received my statement saying that there was a deduction from my CPF for an installment – although I have instructed Bank D to deduct from my savings – I politely inform them. The second time, I alerted them again. The third time, I let the phone banker feel that I am upset. The fourth time, I got in touch with a manager in this bank who asked his staff to look into this matter in detail. The result, they explained: the statement they sent out follows a certain standard process. In reality they did not touch my CPF at all. What an explanation!

Conclusion: Banking – The Productivity Gold Mine

Have you ever considered how much unnecessary paper you receive from banks, telecoms, insurance companies, etc., you immediately feed into the dust bin? It is amazing that they do not think to stop the nonsense such as sending a payment instruction in case there is nothing to pay. Doing seems to be much easier than thinking. In other words, rethinking the process from time to time does not seem very popular in banks. Just doing the same old thing over and over again is much easier. But, guess who pays for this waste!

In Banking lies the real Productivity Gold Mine.

Is the lack of customer relationship a productivity problem? I guess it is, for the bank, if you consider that someone needs to take my call again, needs to work on my email again, has to try to understand the problem again. Think about all the unproductive processes I will trigger when I eventually change banks. And, it is a productivity problem for me, too.

Once more: Guess who pays for all this!

This kind of productivity problems do not lie with staff and it cannot be fixed by sending some people to a skills development training. The issue lies with the managers who do not understand what is going on in their processes.

Even outsourcing and moving the back office processes to a lower cost country would not fix the problem. My best bet is that the same inefficient processes are run – from a cheaper location.

Recommendations

Of course, banks work on improving their processes. However, the above mentioned mishaps may not seem critical enough to be tackled, or may not even be known. Most of the customers would ignore or swallow these things without feeding back – until they change their bank.

Banks - the real Productivity Gold Mines

Figure 1: Complaints – The Tip of the Iceberg

The customer surveys I received from my banks were so focused that they rather not arrived at detecting the issues mentioned. However, I am very convinced that if I encounter such issues, hundreds of other customers do as well and thousands or even millions of mailings are wasted. A study of complaint management in the German finance industry (Pietsch, 2003) revealed that complaints display only the tip of the iceberg. A multitude of problems is usually hidden and hardly voiced by customers if they are not asked (Figure 1).

My immediate recommendations for our banks are not new:

  1. Review your Voice of Customer (VOC) system to get more comprehensive information.
  2. Feed the VOC data back into process improvement or process redesign activities. Do not just follow Voice of Management.
  3. Train management and staff to really move from fixing issues to rethinking processes.
  4. Reward management and staff for detecting process issues and suggesting changes.
  5. Make critical indicators for these issues part of the Management Information System (MIS) – equally important to financial indicators.

Case 5: Excellence in Banking is Possible

There are some good news, too: I have one bank whose statements I can always trust. They work fully electronically – even for change of address – and do not send me any paper anymore per my request. I can always reach their website – even with the newest browsers. And the best is: if I call this bank I get to talk to a real person immediately – even without being their Premier customer. However, I have not called them for years, because there is no need.

Eventually, excellent service and high productivity come together.

BPR, Cases, Customers, Lean Six Sigma, Service

Seven Habits … – Habit 1: VOC

Ting is a sophisticated traditional Chinese character (Figure 1) that exemplifies the most important activity related to customer service in an impressive way: Listening. The old Chinese already knew that when listening with your ears, you better treat the speaker as a king, focus wholeheartedly with 100% attention.

Only by doing so you learn about your customers’ requirements, the mentioned ones and – often more important – the unsaid.

Listening Without Ting

Customer Surveys

It was early evening when I received one of these customer survey calls everyone experiences once in a while. The timing was not perfect however I decided to help this poor chap on the phone. He was just trying to do his job for his bank. Patiently did I listen to his questions trying to give him my honest rating on a scale from 1 to 10. Before we started, I had already decided that my average rating would be around 7. This does not make someone loosing face and still shows some room for improvement. Since the questions did not really touch anything that had to do with my banking experience but did rather circle around the brand value of his bank, I lost some interest. Nevertheless I installed some variation by going down to 5 and up to even 9 for some questions.

Figure 1: Traditional Chinese Character Ting. English: Listen

Figure 1: Traditional Chinese Character Ting.

When Survey Data Becomes Interesting

Only when he finally touched an area that had to do with my recent banking experience, I woke up, gave him a rather low rating and wanted to explain why. His answer was: ‘Sorry, I am not really from this bank. I am calling from a call centre and I am not able and needed to gather your verbatim feedback.’

Customer surveys are means of listening to the customer. Unfortunately, when you survey a customer he is often not in the mood to give his feedback. Most likely, he is disturbed in the middle of something more important – which is nearly everything. When you then engage a call agent – who gets paid by number of calls completed in a certain time frame – you have two people who are not interested in talking to each other. That call would be used to derive strategy, improvement actions or OD interventions. What do you think is the result of that? Where is the Ting in that?

Customer Feedback – Complaints and Commendations

Another time, I had a rather unpleasant experience with one of our banks and their incorrect statements. I sat down, took time to write a pretty detailed explanation of what happened. The bank contacted me and promised to look into the matter. Some days later they apologised and said that this was an IT issue. This would be fixed with the next release. Good.

Customer complaints related to real events are much better in quality and usually indeed useful for both, fixing the problem and improving the system. Research in the German financial sector has shown that these complaints commonly reveal only the tip of the iceberg. Behind each complaint you should expect 25 similar unpleasant events with customers who do not complain. They may just walk.

And, think about how much you pay for the surveys. Complaints come for free!

Best Practices – Ting in Action

Learning from the Great

When I joined GE Capital many years ago, one message got hard-wired in my genes from the beginning: the customer comes first. Before Jack Welch started his famous Six Sigma initiative, GE installed a thorough system for collecting and analysing the voice of the customer that was usually scattered all over the place. Every Six Sigma project presentation we did not start with the voice of the customer was prompted by our SVP with the question:

And, how does this relate to our customers?

Another best-selling question by our SVP was

Do you THINK this is what the customers want or did you actually ASK them?

Both questions needed to be answered with specifics, with facts. Commonplaces would not be accepted. Never before or after have I seen this kind of rigour in another company.

TING in Action at an SME in Jakarta

David, the MD of a medium-sized supplier company for the petrochemical industry in Jakarta, meets his direct reports every morning at 0800 for a very short update. He used to ask questions like ‘Everything ok? Anything new?’ until he found that something is missing in his company: the focus on the customer. Therefore, he decided to change this daily routine. He now starts the day with one question: ‘How is the voice of the customer?’ His team needs to mention not only issues raised by clients or observed by his staff. They also need to come with short-term and long-term solution ideas. Every day! Since they started this habit, they learned a lot more about their clients. In this company, the meaning of voice of the customer is in the bloodstream. They listen with 100% attention – and act. They know the meaning of “Ting”.

TING in Action at the Government

In the Singapore blood bank, nursing staff together with Red Cross continuously work on improving the level of customer service. They know that every donor who does not return means a lost blood bag that could be vital for a patient in one of the hospitals. Therefore, nurses and their colleagues do not rely on written customer surveys. They contact their donors in order to listen wholeheartedly to donors’ needs, to understand their concerns and to be able to serve them better. Although being a government agency, they display an exceptional level of dedication and customer focus that would do good to any private organisation.

Conclusion

Talking about the importance of the customer once in a while and running some surveys from time to time is not good enough to really serve them better. In order to achieve this you need to change the behaviour of your team members. It is necessary to install some habits.

Make it a habit, like David, to ask in your meetings with your team members ‘What is our customers’ voice? What have you done to serve our customers better?’ And, make it a habit to start the talk with your own story to highlight how you have improved the level of customer service.

If you cannot answer these questions positively every week, check whether you have spent your time wisely.

And, it would do us good to remember what the old Chinese taught us some thousand years ago: Listen with your ears wide open (and your mouth shut), by treating the speaker as a king, whilst focusing wholeheartedly and paying full attention. Listen with Ting.

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