HR professionals understand the impact culture has on employee engagement and business performance. But what is harder to establish, is which particular aspects of culture drive superior business performance and positive engagement by managers and staff – and more importantly how to measure it, writes Linden Brown
Research by MarketCulture Strategies has validated what many of us intuitively know, that those organisations that have a strong customer-focused culture produce sustainable business growth and profitability and have more passionate and loyal employees. A strong customer culture is founded on the belief that “what’s best for the customer is best for the business”. Examples of companies that have it are Amazon.com, Virgin, Costco and salesforce.com.
Also it is now possible to measure and benchmark your level of customer culture for a function, business unit and your organisation overall.
Which organisations are actively building stronger customer cultures?
Australia Post, Telstra and Westpac are companies at various stages of building customer culture. Others like global retailer, Ikea, have gone through this process and have embedded a customer culture into their organisations and are focusing on maintaining and strengthening it.
They have been able to make customer culture tangible, have learned how to communicate it, and foster the behaviours that are most relevant. Also they have seen the benefits for their businesses.
What is HR’s strategic role in customer culture?
HR plays a strategic role when it engages in activities that can be directly seen to support the business strategy and drive business performance. Development and measurement of the firm’s level of customer-focused culture is one of those activities. By helping to strengthen customer-focused behaviours of leaders and staff, identifying weaknesses and their relevance to business results, and measuring progress, HR professionals make the link between culture and business performance tangible, relevant and a top priority for senior management. There are five actions for HR’s strategic role at the table:
- Link customer culture to business performance
- Measure and benchmark customer culture
- Tie recognition and remuneration to customer culture and customer feedback metrics
- Keep senior leaders engaged through customer immersion
- Collaborate with finance to measure the financial benefits of customer culture to the business
What is involved and how can HR drive it?
There are a number of steps to building a strong customer culture.
1. Developing a customer-centred vision, values and strategy. At Telstra, its HR professionals were involved in working with senior leaders to develop the vision and values. They also worked with the CEO to articulate what the desirable culture and values should be to establish a “One Telstra” mindset and relevant behaviours towards customers. At Westpac, values agreed around “customer delight” and “one team” became an essential foundation for developing strategies and actions that enhanced customer focus and customer experience. The HR group played a central role in facilitating cross-functional groups in this process.
2. Gain the buy-in, commitment and focus of senior leaders. At Credit Suisse this is done by having all senior executives “be” customers by going through the process of buying a service online and in the bank’s branches. They then report back to the senior management team describing their experience and what needs to be improved from a customer perspective. This “customer immersion” process involving senior leaders and non-customer facing managers can be facilitated by HR professionals to gain or reinforce commitment and priority focus of senior leaders. It helps make the customer “real” and connects HR with what really matters – influencing senior leadership and managers to improve value for customers that drives future business performance.
3. Translate vision and values into meaningful action. The Virgin Group has a clear vision, set of values and working principles across its diverse businesses. Virgin stands for value for money, quality, innovation, fun and competitive challenge. They use memorable symbols. In a bathroom in one of Virgin’s offices where the toilet roll sits on the wall you will see the words “this is the only place you will be ripped off at Virgin’ – reinforcing the value for money positioning of all Virgin businesses. At Virgin Trains in the UK, CEO Tony Collins, supported by HR professionals, engaged in many workshops with his leaders and staff to help them translate their vision and values around customer service into meaningful action.
4. Conduct customer mindset and skills workshops. The learning and development HR professionals at Westpac design and develop workshops for people leaders to strengthen their customer mindset and provide them with skills to lead their teams with customer-centric behaviours. At Westpac senior leaders attend the early workshops and later act as facilitators in subsequent workshops. You will know you have effective buy-in by senior leaders when they enthusiastically attend and facilitate these workshops.
5. Facilitate cross-functional collaboration. Cross-functional collaboration that focuses on creating value for customers through new products and services and better customer experience results in far better delivery of value. When customers are frustrated by organisational silos and lack of coordination and communication across the business they will look for alternatives at the first opportunity. Most large businesses have internship programs and plan secondment of people across departments to create more collaboration between different functions and business units. Skilled HR professionals play a key role in planning and executing these programs, that otherwise would fall by the wayside or would be sporadic and ad hoc.
6. Develop customer culture behaviours at leader and individual levels. Corporate culture determines what people do – how customer complaints are handled, whether promises made to customers are kept … and whether staff really care about the customer’s experience. HR has a key role to play in helping leaders and their teams define and enact behaviours consistent with a strong customer culture. By facilitating town halls and cross-functional group meetings HR professionals can help bring these behaviours to life through story-telling, case studies and experiences told by real life customers. These help to embed these behaviours into the business. At salesforce.com, the highly successful Silicon Valley based software company, Alex Bard, senior vice president, says: “Inside our DNA we will always do the right thing for the customer first – we will think about how would we feel about this happening to us if we were on the other side of the interaction.”
7. Formalise recognition and reward systems. This is one of the centrepieces of HR’s role. When rewards are directly linked with customer culture behaviours and customer satisfaction and advocacy outcomes they act as a powerful reminder of what is important in the business … customers! At Telstra now everyone’s remuneration is affected by the net promoter scores – the tool that measures customer advocacy. Improvement targets are set and take-home pay is affected if targets are not achieved. The HR team plays an important role in explaining how compensation works and also providing advice and helping managers with both informal and formal staff recognition systems for outstanding service, collaboration and innovation for the customer.
8. Measure customer culture progress against targets. Many large organisations conduct employee engagement surveys. These are important to understanding staff motivation (or lack of it) and employee attitudes. What they do not measure effectively are customer-cultural behaviours. Yet, we know that these are strategic because they drive business performance and can be directly tied to different business strategies. Companies like Fairfax Media, Konica Minolta Australia and BlackRock are now starting measure, benchmark and track customer culture.
9. Redesign and conduct recruitment and induction programs that reflect the company’s customer-centric vision, values and strategy. Brian Hartzer, CEO of Westpac, tells the story of how the customer performance and business performance was substantially and permanently lifted at NatWest’s 110 London area bank branches. The HR group there had a strong customer culture and understood what was needed to attract, induct and train new people for these branches to strengthen their customer-focused culture. The HR people came up with an idea for the ad to be placed as posters in London’s underground tube stations – resulting in a deluge of applications by the type of people with the attitudes they were seeking. They trained them with customer service skills, helped tie these to customer metrics and developed recognition systems to reinforce the desired behaviours with customers. Within 6 months the customer satisfaction scores increased substantially across the 110 branches to levels that were well beyond what people could ever remember.
10. Refresh people leader skills and tools supporting customer culture. As guardians of corporate culture, HR professionals need to play an ongoing role in upskilling, coaching and supporting leaders and their teams to higher levels of customer culture.
How can you and your team become more customer-centric?
For you and your team to play an effective role in these steps, you should assess your own level of customer culture and strengthen it. You should be able to act as a role model and advocate for customer culture. To evaluate where you stand answer the following questions:
- Have we clearly identified our customers, their needs and the value we need to deliver to them?
- Have we clearly defined our service standards and expected customer behaviours of team members based on customer feedback and collaboration?
- Do we have an empowered team, open to new ideas and tools that connect HR activities with strategic business priorities?
- Are we measuring the impact our activities are having on customer satisfaction and business performance?
- Are we measuring and benchmarking our own customer culture and setting targets for improvement?
- Do these things well and your strategic role in the business will be greatly enhanced.
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