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CCA Research Council Report




Planning and Achieving Change



See Business Differently Ltd.


Stephen Parry, Beverly Evans, Susan Barlow

November 2008   V3.1




Price £95




                       © Copyright 2008 See Business Differently Ltd.
Key Headlines
Customer contact centres are facing unprecedented challenges and transformation is essential for
survival. Pressure exists to improve customer experience, reduce operating costs, motivate staff and
create differentiation.

Traditional customer service models and call centre designs no longer meet the needs of the modern
customer. This calls for a new approach to organisational design, development, leadership and change.
So, where does an organisation begin?

This paper outlines a number of new key concepts.

Change Capabilities
There are numerous types of change initiatives within organisations, from tactical improvements within
the local workspace to large, strategic change to structures and technologies. In order transform any of
these situations effectively, these simple questions must be asked: ‘What does the organisations change
community look like? and ‘Does it support my current business model?’ This document will provide some
insight into these important questions, and the answers will be unique to your situation.

Operating Mode:
There are many types of businesses ranging from simple, transactional businesses to high-value
professional services. Trying to deliver high-value services in a transactional mode will be disastrous. A
clear understanding of the operating mode is necessary to clarify your approach to change and the type
of change you need to produce. Within this paper, See Business Differently provides a useful guide to
help you determine both your current and future operating mode.

Service Climate
The Service Climate is the combined perceptions of customers, employees, managers and leaders; it is
an outcome of the day-to-day behaviour of your business. It predicts the performance and long-term
profitability of an organisation. Understanding your current service climate will provide insight into the
selection of approaches required to create change in behaviour of both customers and employees. See
Business Differently uses a service-climate diagnostic, Climetrics® (4), to measure how well the
organisation, as a whole, identifies, understands and delivers value against customer needs.

The soft stuff is the hard stuff
See Business Differently firmly believe the key to successful change is the creation of change
communities (change capabilities) that reside within or as close as possible to front-line operations. It is
people who create change and it’s a change in their behaviours that sustains it. Even if you are
implementing a change program based on technology, placing behaviours at the centre of your program
will always deliver a better return on investment and improve both engagement and acceptance. ‘You
get the behaviour you design for’. So how do we design better behaviours and infrastructures at the
same time?

To start, the organisation needs a change framework, a clear understanding of its chosen operating
mode, the type of change capability it wants to create, and the kind of service climate it would like to
establish.




                              © Copyright 2008 See Business Differently Ltd.
Executive Summary

This paper outlines a framework to provide organisations with insight into the following questions:

    •   What type of operating model best suits our needs?
    •   What organisational capabilities do we require?
    •   What are the implications for our change management teams?
    •   What type of leadership and executive support do we need?
    •   How can we determine if our contact centre has the maturity to change?
    •   What type of change approach should we use to gain involvement and commitment?


The Challenge
‘How do we translate an executive strategy into an operational design, implementation plan and our
ongoing managing practices?’ And, ‘how can I influence the change agenda?’


Solution Approach
What is required is a universal set of approaches and methods that can be used by any customer contact
centre given their unique operational circumstances and maturity.


Assessing Readiness for Change
In order to move the organisation to its future state or change its operating mode, it is necessary to
determine the elements that need to be removed, strengthened and created.


Solution Design
Having identified what needs to change, an approach needs to be selected and change elements
sequenced into a route map.

This paper will discuss various change models and highlight the critical factors that influence the choice
of approach and route map design.




                             © Copyright 2008 See Business Differently Ltd.
Approach
This paper outlines a three-stage framework for designing, building and changing organisations to help
organisations introduce new managing practices and operating structures.

The change assessment framework and subsequent route map planner focuses on understanding the
alignment between the following areas:

        •   Operating Model
        •   Operating Mode
        •   Organising Systems
        •   Managing Practices
        •   General Service Climate (i.e. operational performance and behaviour)
        •   Delivery Capabilities

Particular attention will be given to the following areas:

        •   Ability to define and measure customer value and end-to-end delivery performance.
        •   Ability to share customer data and operational performance information at all levels within
            the organisation.
        •   Ability of the organisation to introduce innovation and improvement.
        •   Leadership styles and drivers at each level within the organisation.


Discovering the current state
A clear understanding of current operational practices, capabilities and change readiness is required. In
addition, the organisation needs to gain insight into the operational practices that need little or no
change and those practices and capabilities that it needs to create in order to move to an adaptive
service model, focussing on meeting ever-changing customer needs.(1)

Information gathered during this exercise will need to be socialised with senior teams and provide
valuable input into the future state design and implementation route map.

The route map needs to focus on leveraging previous investments in technologies, practices and skills.


Change Assessment Framework
Executive teams are responsible for determining the market positioning strategy, offerings and business
strategy, while operational teams need to create an execution plan or operating strategy.

An example of the See Business Differently change assessment framework can be seen in Fig 1




                              © Copyright 2008 See Business Differently Ltd.
Executive Direction
Data for these areas (highlighted in green) is usually provided by senior executives. Operational staff
will need to translate these activities into an operational plan. However, it is not uncommon to find
situations where executive teams have not clearly defined the company’s market positioning, offerings,
means of differentiation or even the business strategy. In these situations, contact centre operational
managers have two choices:

                 1) Do the best they can with the current lack of direction and hope they are doing the right
                    thing.
                 2) Take a leadership position and use customer data from the contact centre to inform and
                    drive the executive agenda. (1), (2).

Alignment between the executive objectives and operational execution is often perceived as an
executive responsibility. However, operations are closest to the customer and understand customers’
deepest needs; operations, therefore, must take the leadership position if there is to be a real
transformation in the customer experience, employee engagement and long-term profitability.



             Market Position    Market Position Strategy
                                The market position strategy defines how the organisation positions itself in the
Executive




                Strategy
              Offerings and     market place against its competition. Some areas to consider are:
              Differentiation
                Business            •   Industry sector and customer groups.
                 Strategy           •   Level of value creation (Are services simple transactions or professional
                Operating               services?).
                 Model
                                    •   How does the organisation differentiate itself within the sector?
                Operating
                 Mode
                                    •   Market dominance, cost advantage, value advantage, price leadership.
               Organising
Operations




                Systems
                Managing
                                Offerings and Differentiation
                Practices       An organisation must be clear about what it intends to provide and how. In
                                addition, it should ask itself whether or not it has packaged its goods and
             Service Climate    services in an accessible form. Can customers easily buy the goods and
                                services?     Ideally, offerings should be differentiated in some way.
                Behaviour
                                Differentiation may come in many forms. The offerings themselves may be
               Performance
                                unique, or the way in which services and products are delivered may increase
                                customer value.

               Maturity Gap
Gap




                                Business Strategy
             Foundations Gap    Business strategies usually comprise:

                                Corporate Culture:
                Fig 1           Values, mission statements, leadership style, team work, flexibility/adaptability
                                and change management.

                                Strategic Intent:
                                Futures, re-engineering, downsizing, organic growth, acquisitions, restructuring,
                                share price, sales, profit, earnings, productivity, volumes, core business and
                                new product or service development.

                                Strategic Planning:
                                Vision, goals, aims/objectives, analysis, business development.




                                     © Copyright 2008 See Business Differently Ltd.
Operational Responsibilities

Operations need to create an operating strategy and change approach to execute the overall executive
strategy.


Operating Model
When considering change, a clear understanding and definition of the current
and future operating model need to be articulated. (4) For example:                               Market Position




                                                                                     Executive
                                                                                                     Strategy
                                                                                                   Offerings and
   •   Does the organisation have a virtual model, using technology to link a
                                                                                                   Differentiation
       distributed advisor resource such as home workers?
                                                                                                     Business
   •   Are all delivery capabilities fully owned and controlled by the company?
                                                                                                     Strategy
   •   Does the organisation operate a fully outsourced, on-shore or offshore
                                                                                                     Operating
       model?
                                                                                                      Model
   •   Does it operate a centralised (one or two big locations) or distributed
                                                                                                     Operating
       model?
                                                                                                      Mode
   •   Does the organisation operate in-house call centres with outsourced call
                                                                                                    Organising
       overflow?




                                                                                     Operations
                                                                                                     Systems
   •   Does it operate a web-based, agent-less model? etc.
                                                                                                     Managing
                                                                                                     Practices
The list and combinations can be extensive; however, defining both the current
and future operating model are key to understanding the later construction of a                   Service Climate
change/transformation plan.
                                                                                                     Behaviour
Operating Mode
See Business Differently research (4) has demonstrated there are typically four                     Performance
types of customer service operations, each requiring different management
focus, employee skills and customer engagement.
                                                                                                    Maturity Gap


                                                                                     Gap
Understanding the current dominant mode and future mode of operating will
assist in the formulation of a change/transformation plan. Below is a brief                       Foundations Gap
summary of each mode.
                                                                                                      Fig 2


   •   Mass Production: One size fits all
       This is a spray-on service. It has low variation in types of offering; employee skills are basic and
       customer engagement is transactional.
       Competitive basis is commoditised into high-volume, low-value work.
       Delivery models usually include automation and off-shore solutions.
       Management focus is on costs and agent utilisation
       Change capability resides in centralised, specialist groups for all types of improvement and
       change.


   •   Mass Customisation: One size fits all with options
       The customer experiences more choice, but the model is a variation of the one-size-fits-all. The
       employee helps the customer select from a fixed menu of options. The customer experience and
       employee engagement, however, are relatively low.
       Competitive basis is commodity-driven with an emphasis on providing value-add.
       Delivery models include automation and off-shore solutions.
       Management focus is on cost, efficiency and the standardisation of customised options.
       Change capability resides in specialist groups for large projects and local specialists for process
       improvement.




                             © Copyright 2008 See Business Differently Ltd.
•   Mass Specialisation: The Department Store
       The customer is offered more choice, usually (but not exclusively) under one roof or on the
       same phone call; however, customers must know which service they want, where to obtain it
       and integrate each one from different sources. Since employees possess deep specialist
       knowledge, they will engage customers at a much higher level, and the customer experience is
       personal and solutions standard.
       Competitive basis is in-depth specialities connected to expert communities.
       Delivery models use skill-based routing and expert ‘presence’ networks. These may include off-
       shore capabilities when professional skills are more valuable than cultural skills.
       Management focus is on developing knowledge within staff, capturing and reusing solutions and
       efficient solution delivery.
       Change capability resides in advisors for process improvement, local specialists for all other
       aspects of business improvement, centralised resources for project or program management for
       interdepartmental or technical change.


   •   Mass Adaptation: The Personal Shopper
       The service will provide personalised advice to suit the individual. Employee skills are high and
       they will integrate and combine all solutions on the customers’ behalf in unique combinations,
       resulting in high customer and employee engagement. The customer experience, therefore, is
       personal and unique.
       Competitive basis is a trusted advisor and expert.
       Delivery models need to support high customer contact time, solution research and delivery
       effort.
       Management focus is on developing customer relationships, creativity, expertise, customer
       assurance, developing front-line decision-making and customer business outcomes.
       Change capability resides in the advisor community for engaging with customers, learning from
       customers, developing change plans and leading change. High-level project management for
       structural or technical change is usually found in centralised teams.


The operating-mode characteristics clearly illustrate how the underlying work-design principles impact
the customer experience, employee involvement, management focus, delivery models, change
capability and leadership styles.


                                              Mass Specialisation           Mass Adaptation
                      Personal and standard




                                                                                                  Personal and unique
                                                                                                  One size fits all with options
                      One size fits all




                                              © Copyright 2008 See Business Differently Ltd.
                                              Mass Production                Mass Customisation
Customer Service Climate Characteristics




                                                             Customisation




                                                                                            Specialisation




                                                                                                                               Adaptation
                             Production




                                                                                                                                 Mass
                                                                                                Mass
                                                                 Mass
                               Mass

                                                  Enhanced
               One-size fits all.                                               The Department
 Character                                    One-size fits all with                                          The Personal Shopper
               Spray on Service                                                      Store
                                                    options

                                                                               More Choice from a                Personalisation.
                                                  Fixed Menu
 Offerings        Low variety                                                  variety of standard              Individualisation.
                                               of simple options                    offerings                Act on customer behalf.

 Employee                                     Understand basic               Employee has specialist           Expert knowledge to
Engagement           Basic                                                                                      provide integrated
   Skills                                    Option configurations            Knowledge and skills                  solutions.


Customer         Transactional              Customer and Employee            High Level of Customer          Customer experience is
Experience      and Processed               Interaction relatively low            Engagement                  Personal and Unique


                Commoditised                  Commodity Driven                In-depth specialities
Competitive                                                                                                    Trusted Advisor and
                 High Volume                 Emphasis on providing            connected to expert
  Basis                                                                                                              Expert
               Low-Value Work                     Value-add                       communities

                                                                             Developing Knowledge.           Creativity, expertise, and
                   Employee
Management                                    Cost, Efficiency and             Capture and reuse                front-line decision
               Utilisation, Cost,
  Focus                                         Co-ordination                      solutions.                         making.
              Work Intensification
                                                                              Optimised Delivery.              Customer outcomes.



                                                                    Fig 3




                                   © Copyright 2008 See Business Differently Ltd.
Improvement or Transformation?
Organisations must ask themselves do they want to improve what they are currently doing or do they
want to transform their business? If improvement only is needed, then the organisation should clearly
identify its current operating mode and take steps to enhance it.

If, on the other hand, the business needs to change what it does, such as moving away from remedial
break-fix services towards providing managed services, then a transformation in the operating mode
should be considered.



Organising Systems
Organising systems are the subsystems designed to control, monitor and enable effective and efficient
deployment of operational resources. Some of these include:

   •   Reward and recognition systems
   •   Governance systems
   •   Management review
   •   Fiscal control
   •   Performance review
   •   Process-management systems
   •   IT reporting systems
   •   Workflow systems
   •   Resource and capacity planning systems, etc.


In order to facilitate and sustain change initiatives, consideration must be given to those organising
systems that would create a barrier or accelerate change.

Managing Practices
Managing practices establish the conditions for an effective service climate, drive employee behaviour
and produce the customer experience. (3) They are the methods used by staff and management for the
planning, organisation and control of work with particular emphasis on: decision-making, performance
improvement, innovation, customer-knowledge sharing, standards and change capability.

An organisation should also consider these questions when evaluating its managing practices:

   •   What methods are used to determine operating key-performance indicators?
   •   Does a mechanism exist for capturing customer needs and routinely sharing them with the entire
       business?
   •   What mechanisms are in place to help the workforce improve its workplace and end- to- end
       processes, even when the process leaves the confines of the customer contact centre?

High-performing customer contact centres that create long-term profitability, a superior customer
experience and service climate pay particular attention to the managing practices that create wealth
for the both the customer and the business.(2)

These practices go beyond the day-to-day management of resources and the hypnotic drive to provide
the fastest and most efficient means of processing work. Instead, they focus on the creation of
customer value and the maximisation of employee potential.




                             © Copyright 2008 See Business Differently Ltd.
Organisations, in order to differentiate themselves, need to consider if the day-to-day operation (front-
line staff and 1st line management):

    •   Understands and interprets individual customer needs
    •   Makes sense of customer needs and their implication for the business
    •   Shares customer needs systematically across the business
    •   Encourages first-line management to train front-line staff to listen and adapt to customer needs,
        instead of simply directing and controlling operations to hit output targets.
    •   Help employees improve their workplace and end-to-end processes (end-to-end, includes the
        processes that leave the confines of the customer contact centre)
    •   Involve front-line employees, who are most knowledgeable about customers’ needs, in the
        improvement of products and services.

Research (3) has shown that these areas have a significant impact on an organisation’s ability to
differentiate itself and have an enhanced operational performance and a superior Service Climate.

Service Climate
The Service Climate is the combined perception of customers, employees, managers and leaders. It
predicts the performance and long-term profitability of an organisation. See Business Differently uses a
service- climate diagnostic, Climetrics® (4), to measure how well the organisation as a whole, identifies,
understands and delivers against customer needs.

Behaviour
Many years of research have demonstrated that people cannot be instructed or coerced to behave in a
particular way if the desire is long-term behavioural change. Our own Service Climate Management
research (3) has shown that ‘You get the behaviour you design for’. The biggest influence on the
behaviour of staff and managers is the managing practices adopted by the company in response to the
design of the operation. It is no coincidence that behaviour in this model is shown as an outcome along
with operational performance.

The four operating modes: mass-production, mass-customisation, mass-specialisation and mass-
adaptation will provide insight into the type of behaviour an organisation wants to create, as each
operating mode requires different types of customers, employees and management behaviours.

Often in the absence of a good operating system, companies resign themselves to checking and policing
behaviours (coercion) as a means of mitigating the problems associated with a bad operating system.

Maturity Gap
This is a measure of how advanced or sophisticated the current operation is. Often businesses try to
move an operation to a higher level of maturity without understanding how secure and confident people
are with the current approach and their ability to take on new challenges.

Foundation Gap
Operational weakness will surface during a time of change. Therefore, before any change is
contemplated, a close examination of how well the current operation delivers against today’s
requirements is needed. A realistic assessment will determine if the operation is currently ‘just-coping’
when meeting today’s demands. The change programme will expose any operational weakness very
quickly. Failure points can surface in the most unexpected way, throwing the change programme into
disarray. It will be the change programme, not the current operational weakness that will come into
disrepute.




                             © Copyright 2008 See Business Differently Ltd.
Using the framework

Stage One: Can we deliver today’s business?
This identifies if the business can deliver against its current commitments and identifies corrective
actions to create sound foundations.

Stage Two: Can we deliver tomorrow’s business?
The same framework is used to articulate new business requirements and the characteristics of the
future-model.

Stage Three: What is the change-programme design and route map?
The organisation should evaluate design options, and it needs to select a change approach and design
the route map.

A very simple Red Amber Green system can draw attention to the areas most in need of definition,
design and improvement as illustrated below:


 Can we deliver today’s          Can we deliver tomorrow’s                Change Programme                          Developed
      business?                         business?                              Design                                Business

               Market Position                  Market Position           New Market Positioning                   Market Position
                                   Executive




                                                                                                    Executive
 Executive




                  Strategy                         Strategy                                                           Strategy
Executive




                                  Executive




                                                                                                   Executive
               Offerings and                    Offerings and                 New Services                         Offerings and
               Differentiation                  Differentiation                                                    Differentiation
                 Business                         Business                                                           Business
                 Strategy                                                 New Business Strategy
                                                  Strategy                                                           Strategy
                 Operating                        Operating                                                          Operating
                  Model                            Model                                                              Model
                                                                             Current initiative
                 Operating                        Operating                    continuance                           Operating
                  Mode                             Mode                                                               Mode
                                                                              Capabilities to
                 Organising                       Organising                                                         Organising
                                                                                Integrate
                                  Operations
 Operations




                                                                                                     Operations
                  Systems                          Systems                                                            Systems
                                                                              Capabilities to
                 Managing                         Managing                      Develop                              Managing
                 Practices                        Practices                                                          Practices
                                                                              Capabilities to
              Service Climate                  Service Climate                 manage out                          Service Climate

                 Behaviour                        Behaviour                   Select Change                          Behaviour
                                                                                Approach

                Performance                      Performance                                                        Performance
                                                                              New initiatives

                Maturity Gap                     Maturity Gap                                                     Mature Operation
                                  Gap
Gap




                                                                           Change Programme
                                                                           Design (Route Map)                        Adaptive
              Foundations Gap                  Foundations Gap
                                                                                                                    Capabilities



                                                                  Fig 4




                                    © Copyright 2008 See Business Differently Ltd.
Defining the Change Approach
Having defined the gap and identified the capabilities, a change approach needs to be selected. Every
organisation has its preferred or established approach to change; however, it makes sense to leverage
the existing change approach if it has an established track record of success.

What Change Communities Does the Organisation have at its Disposal?
There are usually a number of approaches available to an organisation depending on how they view
responsibility for change and improvement. The established change community will illustrate the
dominant leadership thinking behind change in general, either top-down dictatorial or bottom-up.
Typical change communities are front-line operatives; specialist groups, either in front-line operations
or central change teams; or senior, trusted advisors working with the executive teams.

The diagram below demonstrates how a change approach should be selected based upon the
organisation’s dominant change community set-up and the level of urgency behind the change.

The scope of change (i.e. is it a unit-level change or a cross-functional organisational change?) needs to
be considered. To overcome change resistance, a combination of top-down and bottom-up approaches
are needed. This will create true involvement and workforce acceptance for new ways of working.



                                                               Change Approach Planner
                                                  Integrated            Coordinated         Multiple initiatives
                                                 Internal Learning schools
                                                                                                 Aggressive




                                                                                                                         Trusted Advisor
                                                   and shared knowledge
             Transformational




                                                                                                  Dictatorial
                                Organisational




                                                          A                              C
                                                                      Co-ordinated




                                                                                                                              Top Down
                                                                       Dictatorial Un-coordinated
                                                  Integrated Learning                  Dictatorial




                                                                                                                                           Change Community
                                                     Infrastructure
                                                                      Rapid Push Integration
                                                                         and High rework
                                                                                                                         Specialist
                                                           Integrated Learning               Point Solutions
                                                             and Low re-work                   Dictatorial
                                                                                                Reactive




                                                          B                              D
                                                      Organic Learning Coaching
                                                                                                                         Bottom up
             Improvement

                                Unit level




                                                                        Community Point Solutions
                                                     Experiments                      Local
                                                                                                                              Workforce




                                                       Proactive     Continuous
                                                                    Improvement      Reactive
                                                                      Proactive             Fire fighting
                                                 Local Interest Groups                        Reactive

                                                               LOW       Urgency            HIGH
                                                           Proactive                       Reactive

                                    Optimum Zone =                                          © See Business Differently 2008
                                                                                                                                       Fig 5
The Difference between Front-line Involvement and Consultation
Very often organisations choose a centralised, change-team approach to drive change without having
first built up any front-line change capability. In these situations, employee involvement and
commitment is very limited and change will encounter significant resistance, even failure. Employee
engagement is usually limited to discussions and communication. This is not employee involvement; it is
change consultation. Front-line involvement means the staff themselves are designing, driving and
delivering change. Encouraging front-line operations to be involved in the early design stages or even
asking them to create a new future state themselves will increase change commitment, aid
communication and speed up implementation. To many senior teams this will seem like a loss of control,
but the process is counterintuitive, providing greater control and increased change velocity.



                                                       © Copyright 2008 See Business Differently Ltd.
Proactive and Reactive Change
If change has become urgent and the organisation finds it is working from quadrant C, the opportunity
for a more-considered, proactive approach will be somewhat diminished; however, recovery is still
possible, providing there are high levels of communication and reassurance to the workforce.

Organisations need to understand that approaches that are highly-reactive and urgent by nature become
highly political and depend on position power for their execution. This form of change carries higher
risks of alienation and failure.

The strong advice emerging from change modelling is to build change capability into front-line
operations on a daily basis. This will create a long-term, core competency that can be leveraged at
times of crisis and reduce the stress of change programmes, spread the cost of training and, more
importantly, gain more commitment and optimism from all stakeholders.

It is clear organisations that can change rapidly are more likely to prosper in the new-world economies.
Ultimately, a change approach will always be a trade off between building change-capability slowly,
over time, in preparation for an undefined change, or leaving it until change is imminent.

Changing the way the business operates and behaves
Below (fig 6) is a diagram detailing how a telecommunications company decided that simply providing
internet and telecoms solutions in various bundles, while the customer service teams treated all support
calls as transactions would not create much-needed market differentiation. Their delivery and support
models were working at cross purposes, providing a very different customer experience.

The company also realised they had a choice either to improve their current operating mode from
medium to very high in order to get beyond the differentiation curve by using a mode most operators
were using or change the game by seeking a different operating mode.

The company brought both the solution providers and customer service operations together, (they
resided in the same premises but operated separately) created change communities within the front-line
operation, designed change and improvement into everyday work, redesigned the measuring system and
introduced targets based on customer outcomes not quantities supplied.

After just nine months, the service climate had changed dramatically; staff were involved in improving
the operation every day and developing new and innovative services. This was at a fraction of the cost
of the previous operation models.




 Capability         Climetrics® : Service Climate Comparison Before and After
 Strength
                                                                             After
  High
                                                                      End-to-end
                                                                      Management
                                Solution
                    Before      Providers
 Medium          Customer
                  Service
                                                                                                  Differentiation
                                                                                                       Curve
  Low

                  Mass               Mass               Mass                   Mass
                Production        Customisation      Specialisation          Adaptation
                                            Climate Type
                                                                  © See Business Differently Ltd 2008
     Fig 6


                             © Copyright 2008 See Business Differently Ltd.
Decision-making and responsibility changes
                                             Before   After                                              Before After
 Statement                                                    Statement
                                               %       %                                                   %     %

  Understanding our services allows me to
                                              42      100     I am involved in decision making.           28     45
 take effective action.

  Understanding the customer improves my                      I make decisions with the customer in
                                              14       83                                                 14     67
 commitment.                                                  mind.

 Understanding customers helps me make                        My data improves the quality of decision
                                              15       95                                                  0     83
 better decisions.                                            making.

 It is my job to share information with my                     I can improve processes and methods to
                                               0       63                                                 15     65
 peers and managers.                                          serve the customer.

  I help my organisation understand what                      I use customer data to help managers
                                               0       82                                                 17     63
 customers value.                                             make better decisions.

 My manager supports my decision when I                        I am confident making decisions with
                                               0       49                                                 13     66
 have customer data.                                          customer data.

  The management team is committed to                         I understand how the whole organisation
                                              17       50                                                 16     68
 improving the quality of work                                works for customers.



 Fig 7


In fig 7, there are a selection of questions (before and after) highlighting how changing the operating
mode and designing change capability into day-to-day operations resulted in a change in employee
involvement and responsibilities.

The company is now much more proactive and provides high levels of customer engagement and much
lower operating costs. The biggest payback has been the transformation in the relationship between the
company and its clients, by moving the business from crisis management to a predictive proactive
disciplined adaptive business model, the company has obtained their clients trust and repeat business.

This change was designed with behavioural outcomes at its centre, technologies, processes, service
offerings, reward and recognition systems; management training and leadership development were all
aligned to this purpose.

Dual Operating Modes reveal an organisations true attitude to customers.
Figure 8 shows the typical climate distribution for different industries. It is evident from our research,
like the company above, a number of industries have two operating modes, one for the sales process and
a very different one for in-life services (after sales or customer service). They pay much more attention
to individual needs when trying to acquire customers than supporting them once then have bought a
product or service.

In addition where consumers/citizens have to comply with regulatory requirements, a mass production
mode to service is often chosen. Fortunately, this is now changing, albeit slowly, as evidenced by the
advances made in the way Inland Revenue and Tax advice services are currently being delivered.

Data illustrates the cost of retaining a customer is a fraction of the acquisition cost and that most
customers defect because of bad in-life service. However, contrary to years of evidence, organisations
still create mass-production customer-service environments as a means of keeping costs down, when in
fact, quite the reverse happens.

The above case study demonstrates that it is possible to provide highly individualised-responses for both
sales and in-life services and provide it at a fraction of the cost.




                                 © Copyright 2008 See Business Differently Ltd.
Capability   Climetrics® : Service Climate Comparison Typical Industry Distribution
 Strength
                            Water
              Energy       Utilities
  High        Utilities                             Insurance
                                       Purchasing    Services          Investment
                      Low-cost         Computers                         Services
                       Airline                               Travel
                                  Revenue                   Services            Health-Care
               Mobile Phone       and Tax                                        Services
 Medium       Support Services                                    Independent
                                             Mobile Phone           Financial       Legal       Consumer
                           Credit Card        Purchasing             Advice         Advice       Advice
                 Post and Services
              Parcel Services                       Consumer IT              Corporate IT                                Differentiation
                              Consumer                Support                 Services                                        Curve
              Work and
  Low         Pensions
                               Banking                Services
                               Services


                   Mass                       Mass                        Mass                        Mass
                 Production                Customisation               Specialisation               Adaptation
    Fig 8                                                Climate Type
                                                                                         © See Business Differently Ltd 2008




The diagram above shows the dominant service climate for a number of industry sectors. However,
within each sector, a range of operating modes exists. It has to be said that only in one or two sectors
there are companies that have actively moved away from the commoditisation of the mass- production
and mass-customisation modes to create higher value services and better customer experiences found in
the mass-specialisation and mass-adaptation modes.

Companies that take a unified approach to providing high-level, responsive services for all parts of the
customer life-cycle will retain their customer base and prosper over the long-term.

At the end of the day, it’s customer purpose that defines value and dictates how the organisation needs
to be designed, built and operated.




                                  © Copyright 2008 See Business Differently Ltd.
Footnotes and other white papers from See Business Differently.

           1. CCA White Paper: Sense and Respond, New Principles and a New Vision for the Call Centre
           Industry. (Parry)

           2. CCA White Paper: A Demanding World: How much value do you create for customers? (Parry)

           3. CCA White Paper: The Service Climate and Customer Intelligence Workers. (Parry and Fisher)

           4. Climetrics ® Call Centre Diagnostic: Translating the Service Climate into operational actions.
           (Parry and Fisher)


Further Information and other publications

Book


                        The book outlines an innovative and proven framework for organisational
                        change, which enables companies to move away from a “mass production”
                        mentality to one of “on-demand adaptation’ and deliver greater customer-value
                        right across the corporate enterprise.

                        Sense and Respond: The Journey to Customer Purpose. Parry, Barlow, Faulkner
                        (MacMillan 2005)




Strategy White Papers
        Measuring for Value. Transformation Pitfalls and Lessons. (Parry and Marr)

Articles
           Service Climate Management
           Cracking the Customer Code
           Seven Deadly Sins of Transformation and Change
           Gem a call centre transformation case study
           Office Products Direct: A Call Centre Turn around. Detailed Case study complete
           with project plans, task lists, organisational redesign, interviews and results.

TV
           BBC Documentary The Crunch Call Centre Change, Innovation and Creativity.
           Channel 4/Einstein CIPD. Sense and Respond Call Centres.
Radio
           BBC Radio 4 In Business with Peter Day: Lean Service in Call Centres
           (Listen again http://www.bbc.co.uk/radio4/news/inbusiness/inbusiness_20080131.shtml )


Website downloads: www.seebusinessdifferently.com


Contact details
Stephen Parry +44 (0) 7838 114 997 stephen.parry@seebusinessdifferently.com


Diagrams and Trademarks remain the property of See Business Differently Ltd. All Rights Reserved.
Climetrics ® is a registered trademark of See Business Differently Ltd.




                                    © Copyright 2008 See Business Differently Ltd.

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Transform Your Contact Centre With This Framework

  • 1. CCA Research Council Report Planning and Achieving Change See Business Differently Ltd. Stephen Parry, Beverly Evans, Susan Barlow November 2008 V3.1 Price £95 © Copyright 2008 See Business Differently Ltd.
  • 2. Key Headlines Customer contact centres are facing unprecedented challenges and transformation is essential for survival. Pressure exists to improve customer experience, reduce operating costs, motivate staff and create differentiation. Traditional customer service models and call centre designs no longer meet the needs of the modern customer. This calls for a new approach to organisational design, development, leadership and change. So, where does an organisation begin? This paper outlines a number of new key concepts. Change Capabilities There are numerous types of change initiatives within organisations, from tactical improvements within the local workspace to large, strategic change to structures and technologies. In order transform any of these situations effectively, these simple questions must be asked: ‘What does the organisations change community look like? and ‘Does it support my current business model?’ This document will provide some insight into these important questions, and the answers will be unique to your situation. Operating Mode: There are many types of businesses ranging from simple, transactional businesses to high-value professional services. Trying to deliver high-value services in a transactional mode will be disastrous. A clear understanding of the operating mode is necessary to clarify your approach to change and the type of change you need to produce. Within this paper, See Business Differently provides a useful guide to help you determine both your current and future operating mode. Service Climate The Service Climate is the combined perceptions of customers, employees, managers and leaders; it is an outcome of the day-to-day behaviour of your business. It predicts the performance and long-term profitability of an organisation. Understanding your current service climate will provide insight into the selection of approaches required to create change in behaviour of both customers and employees. See Business Differently uses a service-climate diagnostic, Climetrics® (4), to measure how well the organisation, as a whole, identifies, understands and delivers value against customer needs. The soft stuff is the hard stuff See Business Differently firmly believe the key to successful change is the creation of change communities (change capabilities) that reside within or as close as possible to front-line operations. It is people who create change and it’s a change in their behaviours that sustains it. Even if you are implementing a change program based on technology, placing behaviours at the centre of your program will always deliver a better return on investment and improve both engagement and acceptance. ‘You get the behaviour you design for’. So how do we design better behaviours and infrastructures at the same time? To start, the organisation needs a change framework, a clear understanding of its chosen operating mode, the type of change capability it wants to create, and the kind of service climate it would like to establish. © Copyright 2008 See Business Differently Ltd.
  • 3. Executive Summary This paper outlines a framework to provide organisations with insight into the following questions: • What type of operating model best suits our needs? • What organisational capabilities do we require? • What are the implications for our change management teams? • What type of leadership and executive support do we need? • How can we determine if our contact centre has the maturity to change? • What type of change approach should we use to gain involvement and commitment? The Challenge ‘How do we translate an executive strategy into an operational design, implementation plan and our ongoing managing practices?’ And, ‘how can I influence the change agenda?’ Solution Approach What is required is a universal set of approaches and methods that can be used by any customer contact centre given their unique operational circumstances and maturity. Assessing Readiness for Change In order to move the organisation to its future state or change its operating mode, it is necessary to determine the elements that need to be removed, strengthened and created. Solution Design Having identified what needs to change, an approach needs to be selected and change elements sequenced into a route map. This paper will discuss various change models and highlight the critical factors that influence the choice of approach and route map design. © Copyright 2008 See Business Differently Ltd.
  • 4. Approach This paper outlines a three-stage framework for designing, building and changing organisations to help organisations introduce new managing practices and operating structures. The change assessment framework and subsequent route map planner focuses on understanding the alignment between the following areas: • Operating Model • Operating Mode • Organising Systems • Managing Practices • General Service Climate (i.e. operational performance and behaviour) • Delivery Capabilities Particular attention will be given to the following areas: • Ability to define and measure customer value and end-to-end delivery performance. • Ability to share customer data and operational performance information at all levels within the organisation. • Ability of the organisation to introduce innovation and improvement. • Leadership styles and drivers at each level within the organisation. Discovering the current state A clear understanding of current operational practices, capabilities and change readiness is required. In addition, the organisation needs to gain insight into the operational practices that need little or no change and those practices and capabilities that it needs to create in order to move to an adaptive service model, focussing on meeting ever-changing customer needs.(1) Information gathered during this exercise will need to be socialised with senior teams and provide valuable input into the future state design and implementation route map. The route map needs to focus on leveraging previous investments in technologies, practices and skills. Change Assessment Framework Executive teams are responsible for determining the market positioning strategy, offerings and business strategy, while operational teams need to create an execution plan or operating strategy. An example of the See Business Differently change assessment framework can be seen in Fig 1 © Copyright 2008 See Business Differently Ltd.
  • 5. Executive Direction Data for these areas (highlighted in green) is usually provided by senior executives. Operational staff will need to translate these activities into an operational plan. However, it is not uncommon to find situations where executive teams have not clearly defined the company’s market positioning, offerings, means of differentiation or even the business strategy. In these situations, contact centre operational managers have two choices: 1) Do the best they can with the current lack of direction and hope they are doing the right thing. 2) Take a leadership position and use customer data from the contact centre to inform and drive the executive agenda. (1), (2). Alignment between the executive objectives and operational execution is often perceived as an executive responsibility. However, operations are closest to the customer and understand customers’ deepest needs; operations, therefore, must take the leadership position if there is to be a real transformation in the customer experience, employee engagement and long-term profitability. Market Position Market Position Strategy The market position strategy defines how the organisation positions itself in the Executive Strategy Offerings and market place against its competition. Some areas to consider are: Differentiation Business • Industry sector and customer groups. Strategy • Level of value creation (Are services simple transactions or professional Operating services?). Model • How does the organisation differentiate itself within the sector? Operating Mode • Market dominance, cost advantage, value advantage, price leadership. Organising Operations Systems Managing Offerings and Differentiation Practices An organisation must be clear about what it intends to provide and how. In addition, it should ask itself whether or not it has packaged its goods and Service Climate services in an accessible form. Can customers easily buy the goods and services? Ideally, offerings should be differentiated in some way. Behaviour Differentiation may come in many forms. The offerings themselves may be Performance unique, or the way in which services and products are delivered may increase customer value. Maturity Gap Gap Business Strategy Foundations Gap Business strategies usually comprise: Corporate Culture: Fig 1 Values, mission statements, leadership style, team work, flexibility/adaptability and change management. Strategic Intent: Futures, re-engineering, downsizing, organic growth, acquisitions, restructuring, share price, sales, profit, earnings, productivity, volumes, core business and new product or service development. Strategic Planning: Vision, goals, aims/objectives, analysis, business development. © Copyright 2008 See Business Differently Ltd.
  • 6. Operational Responsibilities Operations need to create an operating strategy and change approach to execute the overall executive strategy. Operating Model When considering change, a clear understanding and definition of the current and future operating model need to be articulated. (4) For example: Market Position Executive Strategy Offerings and • Does the organisation have a virtual model, using technology to link a Differentiation distributed advisor resource such as home workers? Business • Are all delivery capabilities fully owned and controlled by the company? Strategy • Does the organisation operate a fully outsourced, on-shore or offshore Operating model? Model • Does it operate a centralised (one or two big locations) or distributed Operating model? Mode • Does the organisation operate in-house call centres with outsourced call Organising overflow? Operations Systems • Does it operate a web-based, agent-less model? etc. Managing Practices The list and combinations can be extensive; however, defining both the current and future operating model are key to understanding the later construction of a Service Climate change/transformation plan. Behaviour Operating Mode See Business Differently research (4) has demonstrated there are typically four Performance types of customer service operations, each requiring different management focus, employee skills and customer engagement. Maturity Gap Gap Understanding the current dominant mode and future mode of operating will assist in the formulation of a change/transformation plan. Below is a brief Foundations Gap summary of each mode. Fig 2 • Mass Production: One size fits all This is a spray-on service. It has low variation in types of offering; employee skills are basic and customer engagement is transactional. Competitive basis is commoditised into high-volume, low-value work. Delivery models usually include automation and off-shore solutions. Management focus is on costs and agent utilisation Change capability resides in centralised, specialist groups for all types of improvement and change. • Mass Customisation: One size fits all with options The customer experiences more choice, but the model is a variation of the one-size-fits-all. The employee helps the customer select from a fixed menu of options. The customer experience and employee engagement, however, are relatively low. Competitive basis is commodity-driven with an emphasis on providing value-add. Delivery models include automation and off-shore solutions. Management focus is on cost, efficiency and the standardisation of customised options. Change capability resides in specialist groups for large projects and local specialists for process improvement. © Copyright 2008 See Business Differently Ltd.
  • 7. Mass Specialisation: The Department Store The customer is offered more choice, usually (but not exclusively) under one roof or on the same phone call; however, customers must know which service they want, where to obtain it and integrate each one from different sources. Since employees possess deep specialist knowledge, they will engage customers at a much higher level, and the customer experience is personal and solutions standard. Competitive basis is in-depth specialities connected to expert communities. Delivery models use skill-based routing and expert ‘presence’ networks. These may include off- shore capabilities when professional skills are more valuable than cultural skills. Management focus is on developing knowledge within staff, capturing and reusing solutions and efficient solution delivery. Change capability resides in advisors for process improvement, local specialists for all other aspects of business improvement, centralised resources for project or program management for interdepartmental or technical change. • Mass Adaptation: The Personal Shopper The service will provide personalised advice to suit the individual. Employee skills are high and they will integrate and combine all solutions on the customers’ behalf in unique combinations, resulting in high customer and employee engagement. The customer experience, therefore, is personal and unique. Competitive basis is a trusted advisor and expert. Delivery models need to support high customer contact time, solution research and delivery effort. Management focus is on developing customer relationships, creativity, expertise, customer assurance, developing front-line decision-making and customer business outcomes. Change capability resides in the advisor community for engaging with customers, learning from customers, developing change plans and leading change. High-level project management for structural or technical change is usually found in centralised teams. The operating-mode characteristics clearly illustrate how the underlying work-design principles impact the customer experience, employee involvement, management focus, delivery models, change capability and leadership styles. Mass Specialisation Mass Adaptation Personal and standard Personal and unique One size fits all with options One size fits all © Copyright 2008 See Business Differently Ltd. Mass Production Mass Customisation
  • 8. Customer Service Climate Characteristics Customisation Specialisation Adaptation Production Mass Mass Mass Mass Enhanced One-size fits all. The Department Character One-size fits all with The Personal Shopper Spray on Service Store options More Choice from a Personalisation. Fixed Menu Offerings Low variety variety of standard Individualisation. of simple options offerings Act on customer behalf. Employee Understand basic Employee has specialist Expert knowledge to Engagement Basic provide integrated Skills Option configurations Knowledge and skills solutions. Customer Transactional Customer and Employee High Level of Customer Customer experience is Experience and Processed Interaction relatively low Engagement Personal and Unique Commoditised Commodity Driven In-depth specialities Competitive Trusted Advisor and High Volume Emphasis on providing connected to expert Basis Expert Low-Value Work Value-add communities Developing Knowledge. Creativity, expertise, and Employee Management Cost, Efficiency and Capture and reuse front-line decision Utilisation, Cost, Focus Co-ordination solutions. making. Work Intensification Optimised Delivery. Customer outcomes. Fig 3 © Copyright 2008 See Business Differently Ltd.
  • 9. Improvement or Transformation? Organisations must ask themselves do they want to improve what they are currently doing or do they want to transform their business? If improvement only is needed, then the organisation should clearly identify its current operating mode and take steps to enhance it. If, on the other hand, the business needs to change what it does, such as moving away from remedial break-fix services towards providing managed services, then a transformation in the operating mode should be considered. Organising Systems Organising systems are the subsystems designed to control, monitor and enable effective and efficient deployment of operational resources. Some of these include: • Reward and recognition systems • Governance systems • Management review • Fiscal control • Performance review • Process-management systems • IT reporting systems • Workflow systems • Resource and capacity planning systems, etc. In order to facilitate and sustain change initiatives, consideration must be given to those organising systems that would create a barrier or accelerate change. Managing Practices Managing practices establish the conditions for an effective service climate, drive employee behaviour and produce the customer experience. (3) They are the methods used by staff and management for the planning, organisation and control of work with particular emphasis on: decision-making, performance improvement, innovation, customer-knowledge sharing, standards and change capability. An organisation should also consider these questions when evaluating its managing practices: • What methods are used to determine operating key-performance indicators? • Does a mechanism exist for capturing customer needs and routinely sharing them with the entire business? • What mechanisms are in place to help the workforce improve its workplace and end- to- end processes, even when the process leaves the confines of the customer contact centre? High-performing customer contact centres that create long-term profitability, a superior customer experience and service climate pay particular attention to the managing practices that create wealth for the both the customer and the business.(2) These practices go beyond the day-to-day management of resources and the hypnotic drive to provide the fastest and most efficient means of processing work. Instead, they focus on the creation of customer value and the maximisation of employee potential. © Copyright 2008 See Business Differently Ltd.
  • 10. Organisations, in order to differentiate themselves, need to consider if the day-to-day operation (front- line staff and 1st line management): • Understands and interprets individual customer needs • Makes sense of customer needs and their implication for the business • Shares customer needs systematically across the business • Encourages first-line management to train front-line staff to listen and adapt to customer needs, instead of simply directing and controlling operations to hit output targets. • Help employees improve their workplace and end-to-end processes (end-to-end, includes the processes that leave the confines of the customer contact centre) • Involve front-line employees, who are most knowledgeable about customers’ needs, in the improvement of products and services. Research (3) has shown that these areas have a significant impact on an organisation’s ability to differentiate itself and have an enhanced operational performance and a superior Service Climate. Service Climate The Service Climate is the combined perception of customers, employees, managers and leaders. It predicts the performance and long-term profitability of an organisation. See Business Differently uses a service- climate diagnostic, Climetrics® (4), to measure how well the organisation as a whole, identifies, understands and delivers against customer needs. Behaviour Many years of research have demonstrated that people cannot be instructed or coerced to behave in a particular way if the desire is long-term behavioural change. Our own Service Climate Management research (3) has shown that ‘You get the behaviour you design for’. The biggest influence on the behaviour of staff and managers is the managing practices adopted by the company in response to the design of the operation. It is no coincidence that behaviour in this model is shown as an outcome along with operational performance. The four operating modes: mass-production, mass-customisation, mass-specialisation and mass- adaptation will provide insight into the type of behaviour an organisation wants to create, as each operating mode requires different types of customers, employees and management behaviours. Often in the absence of a good operating system, companies resign themselves to checking and policing behaviours (coercion) as a means of mitigating the problems associated with a bad operating system. Maturity Gap This is a measure of how advanced or sophisticated the current operation is. Often businesses try to move an operation to a higher level of maturity without understanding how secure and confident people are with the current approach and their ability to take on new challenges. Foundation Gap Operational weakness will surface during a time of change. Therefore, before any change is contemplated, a close examination of how well the current operation delivers against today’s requirements is needed. A realistic assessment will determine if the operation is currently ‘just-coping’ when meeting today’s demands. The change programme will expose any operational weakness very quickly. Failure points can surface in the most unexpected way, throwing the change programme into disarray. It will be the change programme, not the current operational weakness that will come into disrepute. © Copyright 2008 See Business Differently Ltd.
  • 11. Using the framework Stage One: Can we deliver today’s business? This identifies if the business can deliver against its current commitments and identifies corrective actions to create sound foundations. Stage Two: Can we deliver tomorrow’s business? The same framework is used to articulate new business requirements and the characteristics of the future-model. Stage Three: What is the change-programme design and route map? The organisation should evaluate design options, and it needs to select a change approach and design the route map. A very simple Red Amber Green system can draw attention to the areas most in need of definition, design and improvement as illustrated below: Can we deliver today’s Can we deliver tomorrow’s Change Programme Developed business? business? Design Business Market Position Market Position New Market Positioning Market Position Executive Executive Executive Strategy Strategy Strategy Executive Executive Executive Offerings and Offerings and New Services Offerings and Differentiation Differentiation Differentiation Business Business Business Strategy New Business Strategy Strategy Strategy Operating Operating Operating Model Model Model Current initiative Operating Operating continuance Operating Mode Mode Mode Capabilities to Organising Organising Organising Integrate Operations Operations Operations Systems Systems Systems Capabilities to Managing Managing Develop Managing Practices Practices Practices Capabilities to Service Climate Service Climate manage out Service Climate Behaviour Behaviour Select Change Behaviour Approach Performance Performance Performance New initiatives Maturity Gap Maturity Gap Mature Operation Gap Gap Change Programme Design (Route Map) Adaptive Foundations Gap Foundations Gap Capabilities Fig 4 © Copyright 2008 See Business Differently Ltd.
  • 12. Defining the Change Approach Having defined the gap and identified the capabilities, a change approach needs to be selected. Every organisation has its preferred or established approach to change; however, it makes sense to leverage the existing change approach if it has an established track record of success. What Change Communities Does the Organisation have at its Disposal? There are usually a number of approaches available to an organisation depending on how they view responsibility for change and improvement. The established change community will illustrate the dominant leadership thinking behind change in general, either top-down dictatorial or bottom-up. Typical change communities are front-line operatives; specialist groups, either in front-line operations or central change teams; or senior, trusted advisors working with the executive teams. The diagram below demonstrates how a change approach should be selected based upon the organisation’s dominant change community set-up and the level of urgency behind the change. The scope of change (i.e. is it a unit-level change or a cross-functional organisational change?) needs to be considered. To overcome change resistance, a combination of top-down and bottom-up approaches are needed. This will create true involvement and workforce acceptance for new ways of working. Change Approach Planner Integrated Coordinated Multiple initiatives Internal Learning schools Aggressive Trusted Advisor and shared knowledge Transformational Dictatorial Organisational A C Co-ordinated Top Down Dictatorial Un-coordinated Integrated Learning Dictatorial Change Community Infrastructure Rapid Push Integration and High rework Specialist Integrated Learning Point Solutions and Low re-work Dictatorial Reactive B D Organic Learning Coaching Bottom up Improvement Unit level Community Point Solutions Experiments Local Workforce Proactive Continuous Improvement Reactive Proactive Fire fighting Local Interest Groups Reactive LOW Urgency HIGH Proactive Reactive Optimum Zone = © See Business Differently 2008 Fig 5 The Difference between Front-line Involvement and Consultation Very often organisations choose a centralised, change-team approach to drive change without having first built up any front-line change capability. In these situations, employee involvement and commitment is very limited and change will encounter significant resistance, even failure. Employee engagement is usually limited to discussions and communication. This is not employee involvement; it is change consultation. Front-line involvement means the staff themselves are designing, driving and delivering change. Encouraging front-line operations to be involved in the early design stages or even asking them to create a new future state themselves will increase change commitment, aid communication and speed up implementation. To many senior teams this will seem like a loss of control, but the process is counterintuitive, providing greater control and increased change velocity. © Copyright 2008 See Business Differently Ltd.
  • 13. Proactive and Reactive Change If change has become urgent and the organisation finds it is working from quadrant C, the opportunity for a more-considered, proactive approach will be somewhat diminished; however, recovery is still possible, providing there are high levels of communication and reassurance to the workforce. Organisations need to understand that approaches that are highly-reactive and urgent by nature become highly political and depend on position power for their execution. This form of change carries higher risks of alienation and failure. The strong advice emerging from change modelling is to build change capability into front-line operations on a daily basis. This will create a long-term, core competency that can be leveraged at times of crisis and reduce the stress of change programmes, spread the cost of training and, more importantly, gain more commitment and optimism from all stakeholders. It is clear organisations that can change rapidly are more likely to prosper in the new-world economies. Ultimately, a change approach will always be a trade off between building change-capability slowly, over time, in preparation for an undefined change, or leaving it until change is imminent. Changing the way the business operates and behaves Below (fig 6) is a diagram detailing how a telecommunications company decided that simply providing internet and telecoms solutions in various bundles, while the customer service teams treated all support calls as transactions would not create much-needed market differentiation. Their delivery and support models were working at cross purposes, providing a very different customer experience. The company also realised they had a choice either to improve their current operating mode from medium to very high in order to get beyond the differentiation curve by using a mode most operators were using or change the game by seeking a different operating mode. The company brought both the solution providers and customer service operations together, (they resided in the same premises but operated separately) created change communities within the front-line operation, designed change and improvement into everyday work, redesigned the measuring system and introduced targets based on customer outcomes not quantities supplied. After just nine months, the service climate had changed dramatically; staff were involved in improving the operation every day and developing new and innovative services. This was at a fraction of the cost of the previous operation models. Capability Climetrics® : Service Climate Comparison Before and After Strength After High End-to-end Management Solution Before Providers Medium Customer Service Differentiation Curve Low Mass Mass Mass Mass Production Customisation Specialisation Adaptation Climate Type © See Business Differently Ltd 2008 Fig 6 © Copyright 2008 See Business Differently Ltd.
  • 14. Decision-making and responsibility changes Before After Before After Statement Statement % % % % Understanding our services allows me to 42 100 I am involved in decision making. 28 45 take effective action. Understanding the customer improves my I make decisions with the customer in 14 83 14 67 commitment. mind. Understanding customers helps me make My data improves the quality of decision 15 95 0 83 better decisions. making. It is my job to share information with my I can improve processes and methods to 0 63 15 65 peers and managers. serve the customer. I help my organisation understand what I use customer data to help managers 0 82 17 63 customers value. make better decisions. My manager supports my decision when I I am confident making decisions with 0 49 13 66 have customer data. customer data. The management team is committed to I understand how the whole organisation 17 50 16 68 improving the quality of work works for customers. Fig 7 In fig 7, there are a selection of questions (before and after) highlighting how changing the operating mode and designing change capability into day-to-day operations resulted in a change in employee involvement and responsibilities. The company is now much more proactive and provides high levels of customer engagement and much lower operating costs. The biggest payback has been the transformation in the relationship between the company and its clients, by moving the business from crisis management to a predictive proactive disciplined adaptive business model, the company has obtained their clients trust and repeat business. This change was designed with behavioural outcomes at its centre, technologies, processes, service offerings, reward and recognition systems; management training and leadership development were all aligned to this purpose. Dual Operating Modes reveal an organisations true attitude to customers. Figure 8 shows the typical climate distribution for different industries. It is evident from our research, like the company above, a number of industries have two operating modes, one for the sales process and a very different one for in-life services (after sales or customer service). They pay much more attention to individual needs when trying to acquire customers than supporting them once then have bought a product or service. In addition where consumers/citizens have to comply with regulatory requirements, a mass production mode to service is often chosen. Fortunately, this is now changing, albeit slowly, as evidenced by the advances made in the way Inland Revenue and Tax advice services are currently being delivered. Data illustrates the cost of retaining a customer is a fraction of the acquisition cost and that most customers defect because of bad in-life service. However, contrary to years of evidence, organisations still create mass-production customer-service environments as a means of keeping costs down, when in fact, quite the reverse happens. The above case study demonstrates that it is possible to provide highly individualised-responses for both sales and in-life services and provide it at a fraction of the cost. © Copyright 2008 See Business Differently Ltd.
  • 15. Capability Climetrics® : Service Climate Comparison Typical Industry Distribution Strength Water Energy Utilities High Utilities Insurance Purchasing Services Investment Low-cost Computers Services Airline Travel Revenue Services Health-Care Mobile Phone and Tax Services Medium Support Services Independent Mobile Phone Financial Legal Consumer Credit Card Purchasing Advice Advice Advice Post and Services Parcel Services Consumer IT Corporate IT Differentiation Consumer Support Services Curve Work and Low Pensions Banking Services Services Mass Mass Mass Mass Production Customisation Specialisation Adaptation Fig 8 Climate Type © See Business Differently Ltd 2008 The diagram above shows the dominant service climate for a number of industry sectors. However, within each sector, a range of operating modes exists. It has to be said that only in one or two sectors there are companies that have actively moved away from the commoditisation of the mass- production and mass-customisation modes to create higher value services and better customer experiences found in the mass-specialisation and mass-adaptation modes. Companies that take a unified approach to providing high-level, responsive services for all parts of the customer life-cycle will retain their customer base and prosper over the long-term. At the end of the day, it’s customer purpose that defines value and dictates how the organisation needs to be designed, built and operated. © Copyright 2008 See Business Differently Ltd.
  • 16. Footnotes and other white papers from See Business Differently. 1. CCA White Paper: Sense and Respond, New Principles and a New Vision for the Call Centre Industry. (Parry) 2. CCA White Paper: A Demanding World: How much value do you create for customers? (Parry) 3. CCA White Paper: The Service Climate and Customer Intelligence Workers. (Parry and Fisher) 4. Climetrics ® Call Centre Diagnostic: Translating the Service Climate into operational actions. (Parry and Fisher) Further Information and other publications Book The book outlines an innovative and proven framework for organisational change, which enables companies to move away from a “mass production” mentality to one of “on-demand adaptation’ and deliver greater customer-value right across the corporate enterprise. Sense and Respond: The Journey to Customer Purpose. Parry, Barlow, Faulkner (MacMillan 2005) Strategy White Papers Measuring for Value. Transformation Pitfalls and Lessons. (Parry and Marr) Articles Service Climate Management Cracking the Customer Code Seven Deadly Sins of Transformation and Change Gem a call centre transformation case study Office Products Direct: A Call Centre Turn around. Detailed Case study complete with project plans, task lists, organisational redesign, interviews and results. TV BBC Documentary The Crunch Call Centre Change, Innovation and Creativity. Channel 4/Einstein CIPD. Sense and Respond Call Centres. Radio BBC Radio 4 In Business with Peter Day: Lean Service in Call Centres (Listen again http://www.bbc.co.uk/radio4/news/inbusiness/inbusiness_20080131.shtml ) Website downloads: www.seebusinessdifferently.com Contact details Stephen Parry +44 (0) 7838 114 997 stephen.parry@seebusinessdifferently.com Diagrams and Trademarks remain the property of See Business Differently Ltd. All Rights Reserved. Climetrics ® is a registered trademark of See Business Differently Ltd. © Copyright 2008 See Business Differently Ltd.