We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better. ~ Jeff Bezos

One of the biggest challenges in the world of customer services is understanding what type of service proposition you have. What proposition have you developed and delivered? What value – both in terms of services revenue, as well as customer retention, renewal and growth – you are going to have over the medium term. Many times, when I pose the question “what type of service strategy proposition do you have”, I am greeted with a blank stare.

Let me explain what the four types are; their key attributes; what challenges you have to focus on to stay in the race and you will then recognise the value of understanding which you are. In addition, which proposition you aspire to have – as I am sure that may think you are in the wrong “box” – as it were. Let us start at the entry type and in reverse order:

Type 4.  Price Driven, High Turnover services

Attributes: Commodity-like proposition.

This is where the race to the bottom in terms of costs is key. You are in a race to deliver the service with the lowest possible costs. As a commodity, the customer regards you simply as a provider of service, much like a utility company such as one that provides electricity or gas.

Challenges: Cost leadership and economies of scale is key to survival.

You have to be ruthless in managing costs and driving out waste. Scale is also key and this is where people will seek to develop shared service capabilities, such as off-shoring into a shared service centre, that delivers remote services to multiple customers.

Type 3.  Feature Driven, High Turnover services

Attributes: Slightly better perceived benefits, normally SLA based, high performance

This is where you have sold and are delivering a “rich” mixture of services – remote, on-site, regional, international, reactive, proactive, project-based, etc. For many of these, as part of the contract, you will have agreed Service Levels [called SLA’s] with the customer. In fact, you will probably have set up internal agreements on service across your organisation [often called OLA’s – operational level agreements].

Challenges: Deliver beyond “just the SLA” and Constant pressure to add extras. There are two challenges here. The first one is to deliver beyond just the SLA. The “water -melon” effect where you might have green SLAs and yet the customer perceived service is rubbish is something you have to consider. I have previously written on this. “Customer Service, what do you measure when SLAs don’t work? Processes, outcomes, and benefits”

The second challenge is that the customer is expecting you to constantly be delivering incremental and additional services – not necessarily free of charge, but you have to demonstrate their value. Often, customers will refer to this as “innovation” and you have to actively demonstrate this, else, you will be judged just on the SLA performance alone. A place you do not want to be in.

Type 2.  People Driven, Relationship-Based services

Attributes: Long-term personal relationships, but limited value proposition. For this type, the engagement and relationship is based on long-term personal relationships, at very senior levels in both the service provider and the customer. However, there is generally a limited ability to differentiate on value proposition of you as a service provider, but this is not important so long as the relationship remain strong.

Challenges: Understanding and addressing specific customer needs & relationship management. One of the major challenges is how you identify and co-create solutions with the customer. This requires extensive and deep knowledge of the customer and the customer’s medium and long term ambitions and how services can add value to these ambitions. The other challenge is to continually build and maintain strong relationships. Don’t forget this is a relationship, person based type and you can not rely on just the existing relationship you might have in the organisation. You have to extend the relationship network so that you are not reliant on just one or two people. After all organisations change and so do the people in positions of authority.

Type 1.  Brand Driven, High-Value Added services

Attributes: Compelling value proposition & solves complex service challenges. For this final type, this is brand driven based on both your brand as a service provider and also tied into the customers brand proposition as well. The services are extensive and add value to the customers business by solving complex issues that are recognised by the customer to support their business outcomes.

Challenges: Deep customer knowledge, globally consistent services & unique knowledge. To be able to compete and deliver the services, you have to have deep, extensive knowledge of the customer’s business and how your services compliment and add value to their business. To be able to deliver the complexity of services, you will generally have to have both local and global service provision and it has to be consistent – especially if it is a customer that is based in more than country, or you are working across their complete supply chain. You will have to proactively promote the customer experience you are delivering, going beyond the service descriptions and SLA’s and talk in the customer’s own language about the outcomes you are delivering.

Successful Service Strategies drive incremental margin:

To give you some idea of the revenue growth and margin you get from these different types of services, the list below compares the predicted margin levels for each type.

  • Price Driven – generally zero or 1-2% margin
  • Features Driven – up to 5% margin
  • Brand Driven – up to 10 – 15% margin
  • People Driven – over 15% margin

The conclusion is, that the two most successful service strategies are Brand and People Driven. THough you have to balance the amount of effort and time to develop these types of strategies. I have not touched on investments needed as they will be unique to each service provider and how much change is involved to develop the correct strategy.

I leave you with this quote as always….

You’ll never have a product or price advantage again. They can be easily duplicated, but a strong customer service culture can’t be copied. ~ Jerry Fritz

Management of Change – Latest research part 4 – Agility is the Key

Even those who fancy themselves the most progressive will fight against other kinds of progress, for each of us is convinced that our way is the best way.” Louis L’Amour (The Lonely Men)

In the last post, I talked about the accumulated impact of the change and that there is one driver of employee change that has the biggest positive impact in enabling change, Agility.

Agility is defined as: he state or quality of being agile. Agile is Characterized by quickness, lightness, Mentally quick or alert: and has its roots in the latin word agere, to drive.

The research talks about the fact that agile employees are more able to adapt to change because they themselves feel that they are in control of their own response to a changing environment.

The traditional approach to change in an organisation may go something like this:

A group of senior executives get together, normally on an “away-day” out of the office environment and review where the business is going; its plans and activities; where there are significant issues that need to be resolved. What happens next could be a committee is formed to look into the issues; or a task force; or a “hit squad”. Whatever the title, the outcome is normally, a set of recommendations and a plan is put to the executives; challenged; mulled over; reviewed; and finally, a set of changes are decided upon. Then, a senior executive, or maybe a group of executives are tasked with leading and driving the changes. They then start the change process, cascading DOWN the organisation the need for the changes. This is known as the “done to” effect. The employees feel as if they are the victims; completely out of control of their own destiny and in effect the object of the change.

In the Management of Change world that I am used to, it absolutely imperative to put the employee at the heart of the changes. You need to think from the employee outwards; to their managers; their peers; the customers they deal with directly; and ultimately the leadership teams interaction with them. This is the “Agility Approach”.

So how do you enable the employees to feel this way?

A personal connection with the employees; the peers of the employees all sharing experiences and learning from the change and putting the change in the context of the external world, not just an internal company view; really helps to have positive impact on the agility factor. The research concluded this section with the following statistics on percentage impact on change:

Leadership Confidence – 0.1%
Encouragement in the organisation to change: 2.6%
The context of the market conditions to change: 7.2%
Learning from your peers on the key changes and their engagement: 8.4%

The personal connection you have with the change: 11.3% impact

How you as a change agent can help effect the change is the next article in the series.

I leave you with a joke, an old one, but still funny:

A man is flying in a hot air balloon and realizes he is lost. He reduces height and spots a man down below. He lowers the balloon further and shouts, “Excuse me. Can you help me? I promised my friend I would meet him half an hour ago, but I don’t know where I am.”

The man below says, “Yes, you are in a hot air balloon hovering approximately 40 feet above this field. You are between 46 & 48 degrees N latitude and between 52 & 56 degrees W. longitude.”

“You must be an engineer,” says the balloonist.

“I am,” replies the man. “How did you know?”

“Well,” says the balloonist, “everything you have told me is technically correct but I have no idea what to make of your information and the fact is I am still lost.”

The man below says, “You must be a Manager”

“I am,” replies the balloonist, “but how did you know?”

“Well,” says the man below, “you don’t know where you are or where you are going. You have made a promise which you have no idea how to keep and you expect me to solve your problem. The fact is you are in exactly the same position you were in before we met but now it is somehow my fault.”

Management of Change – Latest research part 1 – Embracing Change

“One key to successful leadership is continuous personal change. Personal change is a reflection of our inner growth and empowerment.” Robert E. Quinn

One of the aspects of working in a B2B – Business 2 Business – service organisation, is that there are organisations and research that the company I work for subscribes to and as a consequence I can reflect on as part of my daily work. I continually seek to learn of new research in the MoC arena and also the impact of people in the change world.

I was able to attend a Corporate Executive Board [CEB] webinar [an online presentation and audio broadcast] on “Driving change through leadership transition”. The fascination for me was to reflect the latest research and the impact of the “Y” and “Z” generations and on the way that how you manage and lead change has morphed over the past 10 years. The CEB has 21,00 senior executives [including 100% of fortune 100 companies in the USA, 90% of the Fortune 500 companies in Europe, and more than 85% of the UK FTSE 100 companies – so a well connected organisation]. I would never advocate any single group or organisation, but these folks have been used by everyone and every organisation I have worked for for the past 15 years in a non-judgemental approach and are highly rated.

I thought I would highlight some of the key outcomes from the research I have read so far. They include:

# Change agents and executives that plan and successfully execute the change plans, achieving the benefits 9 months BEFORE those that don’t do this.

# If you are able to execute the change plans, you can achieve revenue AND profit improvements of 3 to 5%.

# If you embrace and lead the transition – acting and behaving as a “Transition Leader”, your direct reports can feel more engaged and can improve their performance more than 15% better than those who are not engaged. This is a significant change as the “Y” and “Z” generations want to feel more engaged. if these terms do not connect, let me know and I’ll put up a definition of “Y” and “Z”.

# Financially, for every £1 of revenue earned, there is 20p directly attributable to change performance and the outcomes. I have always worked on 10p directly and a further 10p indirectly, or 20% impact. This is the same over the past 10 years. You need to think of the 20% impact rule on any change agenda.

The final statistic for this article is that 20% are likely to be disengaged or leave the organisation as a result of a major. If you are looking to cut your people – remove, delete, sack, fire, eradicate – whatever term you can use, reflect that people numbers on a excel spreadsheet are PEOPLE…… and that this has a significant impact on a business.

i’ll post the 2nd part tomorrow which will include the four categories of success and measuring the impact of the changes. The post after that will cover how to equip people to make the change a success.

Customer Service and the impact of Millennials, part 2

“…The Millennial Generation will entirely recast the image of youth from downbeat and alienated to upbeat and engaged—with potentially seismic consequences for America.” — Neil Howe and William Strauss from “Millennials Rising.”

This is the second article in the series where I was asked to take part in a discussion on the impact of the Millennials on the service industry by the Field Service Magazine []. As part of the interview series, I was asked a number of questions and asked to provide answers. They are as follows:-

Across many industries we are hearing about the threat of an ageing workforce, but how much of this hyperbole or are we really facing a potential crisis here?
You’re right that we do have an aging workforce. In today’s climate it is inevitable. With a lack of expansion in the job market over the last five years and experienced people being made redundant, there is an imbalance between available jobs and experienced individuals. A person with 20 years’ experience is lot likely to be hired than a person fresh out of university with no experience as they don’t require such a large overhead in training. However, a person with a long history of work, will also more likely to be set in their ways nd be more expensive. So there needs to be a balance between young and old.

There was a Time Magazine front cover not that long ago that describe the millennials as the Me, Me, Me generation. [ ]. They have this unfortunate stereotype of being a needy bunch who expect promotion every two years just for turning up to work. From your experience, is that stereotype fair?
In part yes, though I don’t believe it is just restricted to the Millenials. I believe that it is common now to think you are entitled to more than you have – it is far more prevalent across age groups. The recent talk I attended by Matthieu Ricard highlighted that selflessness to be the current growing trend across generations.

So what are the key qualities of the millennial and most importantly are they a good fit for field service? The point above highlights the drive and ambition that millennials bring to a role. They are also native to modern technology which again is an advantage for field service work. They are adaptable, open to change, are flexible in their approach

So how do we go out and get them? What kind of programs are you running to attract millennials? Have you had to reconsider how you approach recruitment, for example using social media more and traditional routes like the local paperless? The millennial generation are now longer interested in the old style of recruitment. They need glossy websites, videos and campaigns through social media. This after all is the generation that grew up on the internet. They want to feel connected to and engaged with, not just a feature on a job advert.

When do you think companies should be looking to engage with the future workforce? University? High School? As early as possible. We are actively looking to sponsor programmes at school to help students get into the work environment early.

Of course this is a generation that is native with today’s technology. Two questions here – as the millennial workforce grows do you think we will see field service operations and the technology that empowers those operations ever more integrated? There will be a change. This is the generation that no longer calls or texts. They use instant messaging services and video calls through their smartphones/ tablets/ laptops. Field operational technology will no doubt shift from the traditional means. One company that is trying to stay ahead of the game is Amazons with its new video chat help system for the kindle.

And secondly do you think having up to date technology will play its own part in attracting millennial to an organisation? Technology might draw them in, getting their attention, but it’s not what will win them over. The company itself, the role, colleagues will still play a large part.

Perhaps one of the biggest difference between baby-boomers and millennials is the notion of ownership of knowledge. What is your take on this? It’s kind of been ingrained in us for many years that knowledge is power and there is a lot of kudos and potential gain in being the engineer that has the deepest knowledge. However, for millennials knowledge is not something to be hoarded away but something to be shared. This is the generation that grew up with Wikipedia just being there, remember. This is the generation that has no walls when it comes to information. Every part of some people’s lives is shared with thousands through social media daily.

Now surely for field service this is a good thing but there are two challenges that I see. Namely how do we stop the knowledge stored in our ageing engineers leaving when they do. And secondly how do we facilitate a culture of open sharing amongst our new workforce? There will always be a sense of withholding information. People need to be seen as important and master of their trade. However, this might be a result of job instability and the constant threat of redundancy. Perhaps this will change in the future. In the meantime mentoring and buddying is the only effective solution to sharing information especially with a remote workforce.

I leave you with this quote….

“Although they are better educated, more techno-savvy, and quicker to adapt than those who have come before them, they refuse to blindly conform to traditional standards and time-honored institutions. Instead, they boldly ask, ‘Why?’” — Eric Chester from “Employing Generation Why?”

Customer Service and the rise of Millennials, part 1 of 2 posts

Each generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it. George Orwell

I was asked to take part in a discussion on the impact of the Millennials on the service industry by the Field Service Magazine What on earth are Millennials you might ask? Well they are a group of people that can be best defined as:

Millennials (also known as the Millennial Generation or Generation Y) are the demographic cohort born between 1980 to 2000. They follow Generation X, my generation, who were born between 1965 and 1979.

Other names for Millennials include: Generation Y, Generation WHY, Generation Next, Nexers, The Digital Generation, and finally The Gaming Generation

They are the first generation of humans to have been born and brought up in a digital world. If you think about it for a moment you will realise that before the 1980’s there was no digital TV, no smart phones, no public internet, no Personal Computers, nothing of the Internet of Things, no Facebook, no Twitter, no 24*7 multi-channel TV, etc.

If you wanted to phone someone you either used a public phone box or called from home. If you were working on your homework, researching a topic or revising for exams, you either used the school or college library, the local public library or if you were rich [and we were not] a set of Encyclopedia Britannica books. There were only 4 terrestrial TV channels – BBC1, BBC2, ITV and Channel 4 [launched in 1982]. Satellite TV was only launched in 1990! Games were restricted to Atari and Space Invaders, or ping pong.

In the IT service industry, we have seen the technology shift more than anywhere else. When I started in the industry, the kit I used to repair were terminal’s, impact printers, and computers running Basic, Pascal, Fortran or proprietary manufacturer operating systems. Now it is Laser printers, PC’s, Intel Servers and a mix of Microsoft, Android, Linux and Apple OS operating systems – much more standard and non-company specific.

In the IT service world, the challenge is that our customers have equipment that may be very new, or up to 25 years old. This means that you need to have the skills and capabilities to be able to manage and repair a set of products that spans such a wide technology platform. In effect bridging two or more generations of knowledge.

This is the challenge all technology providers and supporters face. How do you have the skills and capabilities that you need to maintain a service for 25 years? We have a workforce that is now more than ever aging. A recent report stipulated that the average age of a customer field engineer was over 40 years of age. That 60% of companies currently report that they are understaffed in their technical positions. We are recruiting new engineers all the time and in a lot of cases, they are under 30 years of age with a Millennial view of the world. So what are the typical attributes of a Millennial generation are:

# Always Connected…24/7 and expect that the technology they use is as well
# Extremely self-confident and assured
# Optimistic and hopeful of the future
# They are very independent and are comfortably self-reliant
# Determined and goal oriented, you need to set challenging goals and reward them
# Highly success driven, they do not like it when failure occurs and seek to question why
# Lifestyle centered which means they are not indoctrinated into a 9-5 office world, work-life flexibility is key
# They live and breath diversity and inclusiveness and do not, in general have the same types of hang up and prejudices as the previous generations
# Every single one I have worked with are passionate about global, local, and community social support and activities. They are at the forefront for any charity or positive social actions
# They partner well with mentors, as they value guidance and support. However, they also expect respect
# They thrive on flexibility and space to explore and develop, so find time bound and structured sets of activity frustrating.
They are comfortable with speed and change and are flexible
# Finally, they are great at working together and you might find this surprising, very service oriented.

Why, would they be more service orientated than the previous generation? It is because of the world we live in and the growth of the service sector over the past 20 years. Since 1995, service sector jobs have grown 2x’s versus non-service sector jobs. In fact, over 80% of the jobs now in both the UK and USA are Service sector jobs, versus less than 15% that are traditional manufacturing type jobs. You only have to walk down the high street to see the plethora of cafes, restaurants, coffee shops and the like [for example Costa, Starbucks, Pret, Yo Yo sushi, and Subway just in the food sector].

In the next article, I will share the Q and A that was the outcome from the interview I did.

I leave you with this quote in homage to Christopher Lee who died on the 7th June this year.

He was one of the outstanding actors that spanned the Baby Boomers [1946 – 1964], Generation X [1965 – 1979] and even was recognised by the Millennials [1980 – 2000]. Think of the Lord of the Rings and the Hobbit series. He started his film career in 1948 and his last film was this year, 2015 – 67 years. He stared in over 206 films and 65 television appearances. Many a Friday evening I would stay up and watch a Hammer House of Horror film with Lee starring in it ….

What’s really important for me is, as an old man, I’m known by my own generation and the next generation know me, too. Christopher Lee

Customer Service, what do you measure when SLAs don’t work? Processes, outcomes, and benefits

“The measure of intelligence is the ability to change.” ― Albert Einstein

If you work in a B-2-B [Business-2-Business] environment, you will, at some point, have the opportunity to be in a customer account review. This is where you will be reviewing the performance of your organisation against the business commitments that the customer has contracted with you.

A recent account review sparked this article as the account review I attended was interesting for a number of reasons, not least of which, was the intense discussion on what we should be measuring to gauge the success of the services that we were providing.

Service Level Agreements and the Water Melon effect
The first topic that came up was SLA’s – or Service Level Agreements. SLA’s are is a part of a service contract where a service is formally defined and documented in the contract. Particular aspects of the service – scope, quality, responsibilities – are agreed between the service provider and the service user as part of the contract negotiations and these are then used to measure how well you are providing the services.

The customer brought up the concept of the “water melon effect” and there were a number of people in the room who did not know what that was, nor where it came from. I did! The source of the concept came from a publication from EquaTerra / KPMG in 2013, please see the enclosed for the article:

The water melon effect is where, on the outside the SLA’s are green and are green every month, but the customer feels that the service is not. Inside the water melon, however, issues abound. Often, SLAs are developed based on some form of fault tolerance. Uptime, mean time between failures, mean time to repair, call time, time to resolution and like metrics may register as compliant in the monthly report. However, these SLAs don’t do much to measure the things that really matter such as quality, working as a team, delivering on the business objectives, and working as a valued partner. So the definition is wrong, the target is wrong, and the calculation is probably wrong as well. Those who rely on service and support day to day know too well the operational issues and the impact on the business. Established at the beginning of the relationship in good faith, these SLA measurements tend to lose their meaning later in the contract, becoming pawns in an emotional game where the stakes are penalties, breach of contract, renegotiations, and even the search for a different provider of service. None of which actually add any value to the organization. And this is what was happening to the relationship we had with the customer. The customer themselves, recognised that the original set of SLA’s were not reflective either of their business, how they were looking to the future and more importantly, how we could support their business.

Processes, Outcomes, and Benefits
What then followed was a wide-ranging discussion on what the customer wanted and in fact what we could do to change? After all, without having to make major changes to the contract – in effect tearing it up and re-writing it, which neither party wanted to do, how could we work together in a mutually beneficial way?

We could, of course change the process measures, but keep the overall SLA’s the same – in effect “cheat the SLA framework”. But this did not go far enough. We were already measuring first-time fix, the percentage of calls resolved within 4 hours, etc. It did not feel radical enough.

We could of course measure outcomes, in effect change the measures around. Instead of first time fix, we could measure availability of store devices, ie, uptime of tills. This would mean we could reflect better the customer’s requirements, that of service availability to their customers, rather than how quickly we could get something fixed. Better, and more reflective of the customer’s world.

Why not go one step further and measure benefits? What were the benefits of the service and SLA’s we were tracking to the customer? This is where we were really putting ourselves into their shoes. Reflecting their business on the service we were providing. What did they really want? The fastest throughput of service for their customers. So that is what we are going to focus on. We are going to pilot a number of preventative services, targeting failing areas of the business. We are also going to be proactive in working with the customer on this. We are going to use the intelligence we have built up on their products and how they are used to suggest different approaches to how we will service them.

This is going to be the most difficult and will take time. But it makes much more sense than being known as a water melon provider!!

As always, I leave you with a quote.

“The true measure of a man is not his intelligence or how high he rises in this freak establishment. No, the true measure of a man is this: how quickly can he respond to the needs of others and how much of himself he can give.” ― Philip K. Dick

Take the dummy out of your mouth and learn positive verbal communications

“How would your life be different if…You walked away from gossip and verbal defamation? Let today be the day…You speak only the good you know of other people and encourage others to do the same.” ― Steve Maraboli, Life, the Truth, and Being Free

Further to the recent article “Take the fluff out of your ears. What on earth is the benefit of Active Listening?” I’d like to follow up with by discussing one of the most powerful tools we have as humans. That is our ability to communicate verbally. There is a very famous, often quoted and argued over set of statistics that were developed by Professor Albert Mehrabian who pioneered the understanding of communications. He currently devotes his time to research, writing, and consulting as Professor Emeritus of Psychology, UCLA. Mehrabian’s work featured strongly (mid-late 1900s) in establishing early understanding of body language and non-verbal communications.

The normal representation of Mehrabian’s findings is typically cited as follows:
7% of message pertaining to feelings and attitudes is in the words that are spoken.
38% of message pertaining to feelings and attitudes is paralinguistic (the way that the words are said).
55% of message pertaining to feelings and attitudes is in facial expression and body language.

If you think about the proportion of communication that you think you do, which is talking, and listening, you begin to realise that the words and phrases we speak, only account for 7% of the message we are sharing. 38% is the feelings and attitudes of the words that are said. So when I talked about the need to actively listen, this is where it comes into its own.

So what verbal communication techniques can you develop to help you?

Plan what you want and need to say: for those awkward silences with people you hardly know; and impromptu questions. Whether talking to a colleague or the boss; delivering a presentation; or trying to help someone non-technical understand technical information. You need to understand that a conversation is more than you just filling in those empty holes with words.

Put yourself in their shoes and energise your voice by remembering that a conversation is two-way; by understanding others, they will probably want to understand you. By thinking about the opposing viewpoint you may be able to understand and plan for some of the difficult questions or situations that may arise.

Showing interest and not interrupting will help to build rapport and trust with your audience, they are also more likely to want to listen to you too.

Minimise disruptions and distractions from our 24-7 always on, connected environment. Simply put your phone away or on silent; or if taking notes, looking up and making eye contact with the person, can vastly improve the way we communicate with each other.

Telling a story is one of the most powerful ways to activate your brain and engage your listener. You can paint a picture in your listeners’ minds; bringing your presentation to life; and turning a difficult subject into something interesting and understandable. THis is the approach I like to take. When I am presenting, I like to think of a maximum of three messages that I want to convey. I then state them at the front of the presentation, weave stories and anecdotes on these during the presentation and finish up by reiterating them at the end.

Finally, gestures and body language can be distracting and detract from, your message – you are constantly communicating even when you are not saying a word. THink back to the percentages at the top of the article – 55% of message pertaining to feelings and attitudes is in facial expression and body language.Ask a colleague for some feedback on your non-verbal communication, it’s their perception of what you are doing, rather than saying. Does it add impact to your message, or does it detract from what you are trying to say?

Don’t forget to take the dummy out of your mouth. I leave you with the following quote.

“When one watches some tired hack on the platform mechanically repeating the familiar phrases ….. one often has a curious feeling that one is not watching a live human being but some kind of dummy, the appropriate noises are coming out of his larynx, but his brain is not involved” ― George Orwell, Politics and the English Language