How the Dept of Justice developed an assurance governance mapping tool…

Have you been tasked with providing an analysis of how assurance activities within your organisation are mitigating against risk?

Ahead of ERM for Government 2014,  Jacinthe Galpin, Director Risk and Audit at the Victorian Department of Justice gave us a sneak peak of developments across risk management….

Jacinthe is an innovative governance executive with over 15 years’ experience across public and private sector corporations, including the Australian Taxation Office, British Petroleum, Telstra Corporation and the Department of Justice.

Jacinthe believes that governance functions can – when well executed – not only provide robust assurance and comfort but can also deliver innovative best appropriate practice.

The Department of Justice Victoria has developed an assurance governance mapping tool. Can you give us some background on what this is and why it was developed?

An assurance governance map is an one-page analysis of how assurance activities in organisations are mitigating against risks. Assurance governance mapping allows an organisation to assess both the presence, and effectiveness of, governance, risk and control processes. It also highlights opportunities for realistic reduction of assurance activity (if existing activity is sufficient) or where assurance activity must be increased (if existing activity is insufficient).

While assurance governance mapping may not tell you anything new, it distils information from a variety of inputs into a single point, allowing organisations to see their risk and control environment on one page as an executive summary of an organisation’s risk environment.

The Department of Justice is a complex and diverse organisation. Assurance governance mapping will help us understand our risk environment – our exposures, threats and opportunities – and make informed and intelligent decisions about that environment. It will help our decision making and strengthen the intelligence and data we use to make those decisions.

With increased regulatory and compliance requirements, how important is it for public sector organisations to understand and manage their risks?

Public sector organisations must have frameworks in place to identify, analyse, evaluate and treat risk. The community expects nothing less.

A good risk management framework increases organisational awareness of exposures, threats and opportunities, and gives its owner the tools with which to manage those risks to acceptable levels.

Can you give us some insight into the findings of your mapping tool? And how has this made you reassess your approach to difference kinds of risk within the department?

The Department of Justice’s tool is still in development so I can’t speak about the findings yet. However, we expect to be surprised by the end result as assurance governance mapping is usually an exercise where everyone ends up learning a little more about their business. History shows that organisations tend to saturate known risks with control structures whilst the severe and protracted problems are a little tougher to deal with and, as a result, control activity tends to be more limited or targeted. My own personal experience has shown me that in many organisations where severe and protracted problems were critically exposed, it was only via the assurance governance map that the exposure was identified and subsequently treated.

For the Department of Justice, the implementation of assurance governance mapping will enable us to best direct our efforts in terms of control and treatment strategies. We will be able to better target areas of exposures and ensure that our lines of defence remain robust and strong.

Developing a proactive risk culture is a major challenge across the public sector. What strategies can risk leaders deploy to develop a proactive risk culture and build capability in the risk function?

Building and maintaining a culture in which the awareness and discussion of risk is paramount is critical to the successful development and implementation of a risk framework. A good culture is developed with and for its business, is agile and responsive and seeks to embed risk in the day to day operations of a business, rather than a cumbersome additional compliance exercise. A bad culture is one where the executive has decided what the culture is going to be and it is henceforth dictated to staff.

Good risk management leaders should conduct risk surveys, talk to their business and find out what people really want rather than what you think they need. Working closely with your business to institute change by degree may result in slower cultural transformation, but your results will be more sustained and embedded.

Join Jacinthe and key stakeholders from State, Local and Federal Government during ERM for Government 2014.

Too many insurers focusing on process, not experience

There’s a bit of an issue with in the claims industry if this is the case, according to KPMG’s 2013 General Insurance Industry Survey, only 33% of insurers feel their distribution network generates a consistent positive customer experience across all channels. Perhaps even more worryingly, results show 72% of insurers still do not feel their firm’s digital strategy adequately supports building trust with suppliers.

The claims experience is pretty unique; perhaps one of the most emotional many people will go through. When you make a claim, many customers are experiencing a time of trauma. It can be quite difficult to match service levels, procedures and experience. One way to adapt to this is by building trust and rapport between claims representatives and the customer. There are a few different areas that need to be addressed. I recently turned to one of Australia’s leading insurance providers, Allianz, to get some insight.

Engagement and culture

Allianz is continuing to drive employee engagement as a key focus. Allianz was named as the Large General Insurance Company of the Year for the last three years running. Commenting on the most recent award, Niran Peiris, Managing Director said “Allianz’s focus is on delivering a tailored, flexible and competitive service. When it comes to our customers, our philosophy is to deliver a service that builds loyalty, particularly when it comes to delivering on our promise to help them in the event of a claim.”

In addition, the Life Claims area of the business also recently won the 2013 ‘Product of the Year’ at the Australian Banking and Finance’s 2013 Insurance Awards. Praise included ‘The Allianz Life claims experience, which offers customers dedicated specialist Life claims officers ensuring exceptional service.’

Linda Broady, Head of Customer Focus explains the on-going journey across the organisation:

“Developing a strong customer culture and high levels of employee engagement requires sustained focus and attention over the long haul. You can never take your eye off the ball. Creating a truly customer focussed culture is something that only comes from relentless and long term effort and attention, from the top down, and across every part of the organisation. We approach this in a very deliberate way through an ongoing cycle of measurement, action planning, communication, execution and line management accountability.

“Aligned with our focus on building a service culture, creating an engaged workforce is equally important if we are to maintain consistent and exceptional service levels. In addition to driving this via line management accountability, we have Regional Leadership Teams in every geographical location responsible for developing and executing engagement action plans aimed at addressing local opportunities. As a result, our engagement levels continually improve and are well above the Australian norm.”

Recognition is another important lever in creating an engaged workforce and driving service culture. We have local and enterprise recognition programs that recognise and reward customer focussed behaviour, by both internally and externally focussed employees.

“One of our key leadership values is ‘Building mutual trust and feedback’. As part of this we conduct an annual Internal NPS program aimed at generating constructive dialogue and measuring internal service levels. A healthy customer focussed organisation must have a strong service ethic at all levels and across all functions. Employees and managers delivering service to external customers rely on receiving excellent service themselves to be effective.

“In insurance, you get limited opportunities to get it right with the customer, as interactions are typically irregular. Therefore, it’s vitally important we leverage those opportunities when we get them. Having employees who are able to genuinely engage with customers is an essential ingredient in the creation of loyalty and trust. The link between engaged employees, willingness to apply more discretionary effort, and improved service levels is well established, and is central to our beliefs at Allianz.

“It’s widely understood that a claim experience can be a moment of truth for a customer. The circumstances surrounding a claim can often be stressful and associated with heightened emotions. As such, the customer’s experience has the potential to be one of delight or dissatisfaction.

“Employees managing claims need a combination of technical skill and emotional intelligence. Targeting people with a strong service ethic has been a key ingredient in our hiring practices for a number of years, not only within Claims but across the whole organisation. The ability to engage with and have genuine conversations with our customers at every touchpoint and interaction is essential in creating strong relationships.

“The most important time of all is during a claim. Claims specialists need to have a finely tuned antenna to respond with the appropriate amount of empathy and apply good judgement and common sense. For example, a customer calling from a motor accident scene may not be in the right frame of mind to respond to questions that enable us to complete claim lodgement. There are more important issues at stake – for example, is the customer and their passengers OK? Would they simply like reassurance that they can get their car towed away without getting our approval? And, yes, that it’s fine to call back or lodge the claim online or via our Claims app later.”

Nowhere was the importance of having the right people to manage claims more clearly demonstrated than in the case of last year’s NSW Bushfires, where over 200 properties were devastated, and the lives of those impacted were irrevocably changed.

Allianz has an experienced, specially trained team and a robust Event Response Plan that is mobilised into action when these type of catastrophic events occur, including a Mobile Office to ensure we can base our operations wherever they are needed.

However it’s the people that make the difference in times like these. One of our employees involved in working with customers who had been impacted by the NSW Bushfires said, “I noticed [I could] speak with a customer one day and they [hadn’t] retained much of the conversation a few days later. They [were] dealing with the fact that they will need to rebuild their homes and lives and for those doing repairs, they feel guilty for still having a house when others have nothing left. … Some had lost their home, special trinkets, family heirlooms and even pets. All they were left with were memories of their lives. I realised I would have a direct impact on their lives and this was a very powerful and emotional thought for me personally – I formed a connection with all the customers I spoke with”

Build supportive systems

Allianz operates a complex business model, servicing B2B (brokers, motor dealers, mortgage brokers and financial institutions), B2C (direct business) and B2B2C (end customer of intermediaries).

This presents challenges in managing claims, acting on behalf of our partners as well as ourselves.

When a claim is lodged, it is allocated to a Claims Specialist, who is responsible for the smooth and efficient management of the claim. Allianz ensures that other members of the team can assist with enquiries should the customer or a third party (such as repairer or assessor) call when they are unavailable. Linda explains how consistency is ensured:

“We have clear service delivery and behavioural standards and metrics to ensure quality and consistency in execution.

“At the end of the day, the most efficient process is one that suits the customer. If your people practices, systems and processes don’t align with delivering an experience that works for the customer then, not only does it drive a poor experience, it creates inefficiencies and reduces productivity.

One of the areas we’re focusing on right now is end-to-end experience design to ensure we are delivering experiences that fit customer needs and expectations. This starts with understanding the service attributes that define satisfaction at specific touchpoints. Along with redesign, building metrics and methodologies to measure experience from the customer’s perspective and link them to employee accountabilities, is essential to a healthy customer experience ecosystem.

Join Linda Broady during Claims Experience Management 2014 where she will be delivering the Case Study: Embedding a Culture of High Performance: Using Voice of Customer to Reduce Customer Effort and Optimise Service Quality and Consistency.

Inside Johnson & Johnson: Transforming the HR function across 14 countries

After working across the SSON portfolio for a couple of years now, I’ve seen few key trends starting to emerge.

One that really stands out is the heightened focus on the HR function. I first noticed the theme during the 2013 Shared Services and Outsourcing Week, which saw a huge increase of HR professionals in the room. Since then, it’s continued to be a hot discussion topic. So, what’s causing the spotlight to shine on HR? And, perhaps more importantly, how can this core function that affects every single employee help drive a smarter business?

To uncover some answers, I recently caught up with Cherrie Porter, Senior Human Resource Director at Johnson & Johnson. She’s responsible for ensuring the successful transformation of the Human Resource function in 14 countries across Asia Pacific. Cherrie is going to be kicking off our HR Transformation stream during Shared Services and Outsourcing Week Australasia 2014 and it’s looking set to be a packed room.

We discussed the changing role of HR, the importance of taking a staged, tailored approach and the pitfalls of change management during a transformation project.

SSO Week has seen massive growth in number of HR attendees, why do you think that is the case?

It’s one of those things where I don’t know exactly what’s caused it, but I think some of it is driven by the fact that HR is becoming more sophisticated as a function and the professional HR people now working in that function really do want to be part of the strategic activities, the more value-adding activities rather than the pure transactional piece.

HR wasn’t always seen as a profession that required qualified people in the role. In its own right, it’s now starting to be elevated to where it should be.

Why was the decision made to standardise processes at J&J over the 14 APAC countries? Did you face any integration issues?

We’ve approached it on a couple of different levels. Historically J&J has operated as a very decentralised company, meaning that in any one of those 14 countries there could be multiple operating companies.

In Australia there are four, in China 13, in Singapore nine, each with a different number of companies; it’s meant that there has never been a head of J&J in Australia.

Firstly, we standardised processes, not across Asia Pacific as a whole, but at a country by country level. From there we said: ‘OK Australia, here are your four ways of doing different transactions for HR, pick one. You can start with a fresh sheet of paper; just pick the one you think is the best option and build on that.’

The focus is currently on China, there are nine different ways of getting compensation information to Payroll, and there will soon be just one.

Technology also had an impact. Our aim has been to keep things as simple as possible, so we developed a template of how we thought a process should be. That template was taken to different countries to establish if it could work. Sometimes we’d have to change a few things depending on legislation, etc. For example, some countries would require paper copies of certain documents.

Aligning processes to fit the technology template was a challenge; we were faced with some real push back. These new electronic processes interfered with the way things had always been done for years and often required a few cultural shifts. We really had to challenge the value-add on each process and ask how we can become more efficient and effective in the way we’re operating.

Our mantra has been ‘simple, standard, global’ and we really just questioned if it doesn’t fit any of those three… Why not?

Using a phased approach clearly helps achieve success. How does your change management strategy fit in with this and how have you been ensuring continuity and support throughout?

Change management is always tricky, it’s relentless. I’ve been at J&J now for nearly eight years and I’ve been working on this transformation for all that time.

A few years ago we decided to move everybody onto a SAP platform, reengineering all the processes, harmonising all the policies, using an outsourced vendor. We went live with that in several markets.

It lasted three years, and in April 2013, we brought all those countries back into J&J. They’re still running on SAP but now they are under our control, we run them and don’t have our third party vendor doing the transactional work anymore; it’s set up internally.

In the meantime we had to deal with all those other countries that weren’t on SAP.  We had to be flexible enough to say, we made one decision and it’s not really working for us and it’s time to change course, but that doesn’t mean we’ve thrown everything out. We’ve tried to leverage the best of what we had before and revisit that strategy, the vision and the direction. Our vision and direction of the transformation was right (moving transactional work into one area so HR partners could focus on business strategy), we just needed to make some changes to our approach.

As a result, countries went backwards and forwards so they’d probably been on a bit of a rollercoaster. The more progressive HR operators in those countries have jumped on board and got on with it to see where it’s all going. There are still people that are clinging to the old way of doing things, or believing that this is just another fad and if they sit it out long enough it will all go away.

For us the key was to just bite chunks off and move at a pace people are comfortable with. Some of our staff have been here for over 25 years, so it was important to not rush in.

At a country level, China has always been the big challenge for us. It’s the fourteenth and last country that’s coming on board and it’s where we are currently. They’ve looked at the project and seen that it’s not going away and as a result are much more bought into it.

Success builds success; the momentum has led to people more willing to participate. The softer approach, the small steps rather than large leaps, has certainly helped us.  It wouldn’t work everywhere, but it’s something that is working for us, never lose sight of the big picture. We learn from each other and we listen.

Have you been faced with any unexpected obstacles on your journey? Are there any lessons learnt you could share with other organisations on the same route?

Some of them are a little bit sensitive as it’s our own internal doing, such as the battle between HR and Payroll (I’m sure we’re not the only ones that have that). It leads to a lot of politics and has definitely been one of our biggest obstacles, working cross-function, internally.

Change management has also been an obstacle in terms of how people react when things don’t go well. Looking back to the start of our journey, it wasn’t going well with our third party vendor and a brave call had to be made to bring it back in-house. Unfortunately after that, we were almost too scared to move, so we went into this 18 month period where not much really progressed. The countries that had been on the brink of going live were told to hold for two months, it turned into almost two years where nothing happened.

Choosing your external partners wisely makes a huge difference. Spend the time finding a really good fit and someone you can trust and really work with; that makes all the difference if they understand you and what you’re trying to achieve.

Finally, you’re delivering a case study presentation during the Australian SSO Week 2014, taking place in June in Melbourne. What will the audience be able to take away from your session?

If I put myself in the shoes of someone attending rather than facilitating that conversation, it’s those lessons learned that can help the journey. There’s no right and wrong to any of this, it’s just keep your eyes wide open. Ask yourself, if I’m about to embark on this journey what do I need to be on the look out for? It may not be exactly the same as what happened at J&J but it’s still a really good question to have on a checklist. Some of those watch-outs and some of the big ‘ah-ha’ moments, those are the things people will walk away with.

I know myself when I’ve sat in these sessions, it’s reassuring to hear that others are having a similar experience and that you’re not going crazy! It’s a great experience to be with like-minded individuals and take away a few things that are potential pitfalls and traps. I can hopefully help people avoid going far down the wrong path. I don’t know there’s any way to totally avoid it but the eyes wide open is a good way to describe it.

New airport funding revenue set to take off…

There are a lot of issues facing infrastructure funding at a national level. The simple truth is there’s less money in the government pot. As a result, it’s time for economic infrastructure projects to start thinking outside the box about how they’re going to get funding.

Economic infrastructure has a distinguishing characteristic – there is a third party revenue stream generated by people that want to use that piece of infrastructure.

If you want to use a road, or use an airport, then there’s a way in which airport charges are included into the overall financial structure.

Pre-GFC environment, people were ready and willing to take the risk on the third party revenue streams. But as times get tougher, it’s becoming harder to justify taking the risk on the revenue stream.

To get a bit of insight on exactly how we can start to green-light regional airport development projects, I caught up with Martin Locke, Partner at PwC.

Martin and I took a look at the different models government can use to facilitate new investment in infrastructure that is expressly going to have an impact on productivity, and have an impact on growing the economy, generating revenue streams over time:

  1. Government can still decide to build and finance a new piece of infrastructure in its entirety. As revenue streams begin to firm up, government can then choose to sell off that piece of infrastructure. That’s been done in the context of some of the road transactions recently in Queensland. That model is what can be referred to as ‘build now, future sell’ and could apply in relation a completely new piece of infrastructure, or a piece of infrastructure that is an expansion of an existing arrangement.
  2. Another model is to leverage existing assets. This is when the government identifies a particular brownfield asset that’s already generating a revenue stream, and looks at how to expand it. Stakeholders may be asked to step up and take a risk on a revenue stream before it’s been firmed up. Repayment is sometimes provided out of the existing asset, rather than the expansion.  There’s an example of this currently being developed in the roads area with the extension of the F3 to connect up with the M2 motorway. That’s been done as an extension of the original concession – it’s called Missing Link. In return for taking on the risk of constructing and generating this new revenue stream, shareholders ask for compensation in the form of extending the lease term on the existing concession.
  3. Revenue securitisation is another option. When social infrastructure is financed from substantial government investment, it’s because the private sector won’t take the revenue risk. For economic infrastructure projects, the government’s approach is to pay the private financier an availability payment once the infrastructure has been built, generating a return on the initial private capital. Separately, government will also look to generate a charge and revenue stream from that piece of infrastructure. That type of transaction is what’s currently being contemplated for th East West Link project in Victoria. It’s also an example of what was in relation to the subsequent leasing of the Sydney desalination plant.
  4. Contingent support: The fourth area is for government to provide some form of contingent support for a project.  For example, private financier funding might build an expansion, and the government agrees to provide funding support for that expansion. When the private sector financiers step up with their money, they’re told what the projected revenue stream is going to be, as it’s still a projection, and government provides a return guarantee (normally set at a lower level). There’s a cap and collar type arrangement that is adjusted depending on how much is earned. Once the level of the cap is reached, any excess revenue is paid back to government.
  5.  Finally, government can provide subordinated debt. The private sector will provide funding, but will only agree to fund around 50 per cent of the capital costs of the expansion. This will be because they can only see sufficient revenue to amortise 50 per cent of the capital. Government can then offer the remaining balance, in the form of a subordinated loan. Their subordinated loan is only serviced after the prior ranking loan for the banks has actually been repaid. It provides a mechanism where government is providing funding, designed to earn a return and ultimately be repaid.

The above models certainly offer some innovative funding methods, but without a solid business case to begin with, hopes of funding will be slim. Martin shared his key advice for building a successful business case:

Provide clear support for the future ability to generate third party revenue.  If you’re coming up with financial projections around how you’re going to repay your capital, and how are you going to come up with different forms of revenue stream, do your due diligence around that revenue stream to provide strong evidence.

People make a mistake of confusing economic analysis with financial analysis. People will be trying to justify a project by claiming it’s got a really good economic cost benefit ratio. A lot of indirect economic externalities might help generate a really decent economic cost benefit ratio, but unless they are related to financial benefits, the project will not be financially viable.

The government has become increasingly credit constrained. There’s very little money to deploy. They would far sooner see projects being privately funded rather than publicly funded. Ask yourself: How do I make sure that I’ve actually got a business case and a financial structure that is consistent with private funding being made available?

Hear more from Martin during Regional Airport Development 2014 where he’ll facilitate the workshop ‘Exploring Alternative Funding Models for Infrastructure and Commercial Developments’.

 This workshop will assist you with understanding the alternative infrastructure funding models; and aims to guide you through the processes and criteria for securing such funds. Now is the time to comprehensively explore your funding options to ensure you can turn your master plan into master actions.

Google Is My Co-Pilot.

The Lemonade Chronicles

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How did anyone survive without Google?  I almost can’t fathom it.  

If I think about my own, personal use of Internet searches, the bar graphs would be short at first.  Little toes in the water here and there, mostly for fun or curiosity.  No real conception of how powerful is the tool.  I’d searched on Yahoo!, Ask Jeeves, Altavista, Hotbot, Excite, and probably some others I’ve long since forgotten.  But those searches were sure so mundane.  So pedestrian.  “Good Halloween Costume,” maybe.  Or, “Red Sox Schedule.” 

I didn’t realize the unbreakable magnetism Google held over my life, really, until we got a puppy last May.  That little black furry creature brought a whole bundle of “what the hells” with her.  And a whole new epoch of ridiculous-in-retrospect search queries began.  

I’m savvy enough to have long-since discarded lengthy queries with proper sentence structure and punctuation.  I haven’t asked…

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Getting true value from outsourcing: the recipe for success

I first bumped into Jane Stafford, Executive Manager for Banking Process & Optimisation at Suncorp Banking during our Process Excellence event last year,  then again during Shared Services and Outsourcing Week. Jane certainly knows a thing or two about outsourcing – she’s been in the banking and finance industry for more than 20 years, spending years managing the optimal blend of insourcing and outsourcing strategies and implementation for business processes.

Jane’s current role is to manage Process Ownership for Suncorp Bank, monitoring, measuring and delivering business improvement strategies with a focus on process simplification, cost reduction and improved customer experience.  I recently caught up with Jane ahead of here workshop at SSOW 2014 to delve into the key ingredients for achieving an optimal blend – helping other organisations to maximise the true value of outsourcing.  Jane shared her insights on how the landscape has shifted, paving a new way for vendor relationships. Take a read below:

I’m absolutely seeing a need for outsourced providers to continue to be relevant by looking at providing services that sit outside of data entry. Automation is really kicking off in in our industry. We’re seeing far more centralisation of corporate functions (generally the higher value activities like analytics). That’s going have a flow-on effect into knowledge process outsourcing.

We’re seeing the impact of increased regulation occurring. That puts a squeeze on our margins and puts the spotlight on process innovation. The knock on effect to providers is they need to be able to innovate with end to end outsourcing and continue to drive down the cost that sits within that process through lean methodology or something similar.

A few years ago there was a lot of low hanging fruit for outsource providers, if they could do the data entry, they had business. However, client needs are changing as a consequence of a number of different factors that puts pressure on them to go up the value curve in terms of what they can offer from the service point of view.

There are a few fundamentals when looking to cement outsourcing and drive relationships that open up new levels of value:

Keep the ingredients fresh

The secret is building capability in-house to manage optimal blends. Optimal blends means that you are constantly looking at your landscape, making decisions around what is appropriate to outsource, automate and keep in-house.

It’s not as simple as locking in on those three things; it’s constantly evolving depending on what’s happening within your business, what’s happening within the environment and what’s happening in your innovation stakes. We have found most success in just having that management capability pool.

We’ve set up that infrastructure to manage an optimal blend for both onshore and offshore. My team are constantly monitoring dashboards to work out what’s on the horizon in terms of automation onshore or offshore. That involves rolling things back from time to time, and having a framework based on strategy rather than just reacting to what we had done previously.

Set the right temperature

Look at all the decisions that will need to happen to support the way you’ve decided to go. It starts by establishing your core competencies – all the decisions are based around that and people will be challenged if there’s no understanding of what they are.

Executive sponsorship is crucial. There needs to be an appetite to manage the people and cultural components, because every decision you make around in-house, automation or outsourcing has knock on effects that need to be managed throughout that change period. You won’t get your benefit if that isn’t addressed very early on.

One of the key things we learnt five or six years ago is that it’s okay to have a strategy that’s learnt during outsourcing, but if the business is not ready in its own maturity and its own journey, where you haven’t intervened enough to support a new culture, that culture will eat your strategy anyway.

Clean up as you go

Be clear on what your drivers are if you’re choosing to outsource. For us, it was about cost efficiency, labour arbitrage and accessing scale from the outset. But the more and more I get into it, the less important those factors are to me personally, the more I’m actually looking to have providers perform innovation, lean  and refine our processes to remove waste from them. If you don’t have that, your processes end up being old and full of waste.

There’s never a truer analogy of garbage in, garbage out, than when you’re doing an outsource transition…

Set the timer, watch it rise

There are some key areas where you can unlock huge value in the vendor–client relationship: 

  • Move away from master-servant relationships: We’ve tried to co-locate and second people from the outsourced organisation into our organisation, coming to an arrangement with our provider where we actually have contracted in someone from India to be in my team for 12 months. They are actively working in Australia, onshore, understanding the business end-to-end. It takes trust to open your books completely, but the sharing of information and depth of understanding about what we can achieve for our customers is far deeper.
  • At an operational level: Position your outsource provider as an extension of your current team, just sat in another location. Include them in your reward and recognition programme – our outsourcers tend to really enjoy that. It’s still a work in progress for us, but I think it’s the next big thing, to challenge both organisations to position themselves around the commercial structure. That’s where you’re really putting everything on the line.
  • Think beyond the service levels: Our commercials are still structured around SLAs, turnaround times and individual processes. That inhibits everybody from being free of worrying about whether or not a penalty is going to apply. The future is about contracting to end outcomes and saying, “You know what? We don’t care if it’s 24 hours or if it’s 48 hours, this is the outcome we are looking for”. The onus is on both sides, it takes trust and the other party to be willing to not take advantage of that trust too.

Happy employees, happy customers: creating the recipe to success

A well-articulated leadership vision and employee engagement lie at the heart of customer experience and brand success” according he founder of Australia’s RedBalloon and well-respected entrepreneur, Naomi Simson.

It’s an interesting concept, and one that’s gathered a lot of pace over the last 12 months. Workplaces are rapidly transforming and it’s easy to see why – results have shown that happy employees does in fact seem to equal happy customers..

To gain some insight on how this theory is working in practice, I recently caught up with Roslyn Hogan, she’s the Head of Customer Happiness at Red Balloon. Take a read of the interview below:

How are you driving a positive culture at Red Balloon, why is it a focus for you?

Simply speaking, culture is everything at RedBalloon. We pride ourselves on the fact that we have been listed as a BRW Great Place to Work five years in a row, one of only nine companies to do so. We come to work as ourselves, not our job titles. What we share is a deep belief in our purpose, which is to give people more good times. We also have a shared set of values that we live and breathe more than in any company I’ve ever worked for.

We drive that culture by acknowledging that “what gets recognised gets repeated”, both by the individual and the group who witnessed that recognition. On this basis it follows that if you recognise behaviours in line with the culture of the business, it will reinforce those behaviours and therefore drive more of the same. It becomes a self-fulfilling prophecy.

What would you say is going to be the key differentiator between businesses that drive their CEM strategy to new levels and keep ahead of the competition, and those that don’t?

The key difference is results. Your CEM strategy is at large is your sales strategy – they go hand in hand.

Do you have any results to demonstrate the direct correlation between culture, customer experience and business performance?

Are you familiar with the saying “Happy wife, happy life”? Well, the same could be said for the workplace in that “Happy employees, happy customers”. We believe that if our people are happy, it leads to happy customers, happy suppliers and ultimately, a happy financial performance.  RedBalloon has often been quoted as saying “employees are the new customers” and “happy people = happy profits”. And that’s exactly how you should look at it. If you’re willing to go the extra mile for a customer who is upset, then shouldn’t that same attitude apply to your loyal employees?

The results here at RedBalloon speak for themselves. Our employee Net Promoter Score (eNPS) is 100%, so we have unquestionably happy people. Our Net Promoter Score has risen by 14% in a year, so we have happy customers. And as a result of both happy people and happy customers, our sales per call has increased a whopping 34% year on year (2013 to 2014), which equals happy profits for our business.

How do you ensure consistency across all touch points to provide a seamless experience?

Coaching is imperative at RedBalloon – when it drops off, so does the quality of service. The Customer happiness team are empowered to deal with a whole range of customer inquiries. They are largely self-sufficient and free to make decisions as individuals. Every customer happiness team member knows they have an individual impact on the RedBalloon brand – good or bad.

We’re active on several social media platforms including Twitter, Facebook, Instagram and Flickr. We know that every customer is unique and we want them to be able to reach us in the way that best suits them. Every employee who interacts with customers via social media platforms, email or over the phone are trained with the same key messages. We empower our people to deliver a great customer experience that exceeds customer expectations at every opportunity – we even have discretionary budgets set aside to surprise and delight our customers.

It’s all about training our people to do their best, and then trusting them to get the job done.

What would be your one key piece of advice for anyone looking to improve the culture of their organisation?

My one key piece of advice would be to train and empower your people. If your employees know they are making a worthwhile contribution, and if they are noticed and rewarded on a regular basis, they will be happier and more willing to give their extra effort day in, day out. At RedBalloon we have an annual training budget set aside for every single employee – with knowledge and confidence comes the power to trust your own instincts and discretion. We also reward our people with points to redeem against RedBalloon experiences, and we find these rewards work just as well in other organisations seeking an out-of-the-box reward alternative to store vouchers and cash bonuses. Believe it or not, happiness is throwing your people out of a plane!

Finally, customer centricity is a phrase that’s been gathering pace across the industry – what does it mean to you?

Customer centricity for me means that our customers are always at the heart of everything we do. We want to be an integral part of our customer’s experience; we don’t want to just facilitate it. For us, this means listening to them with open ears and constantly evolving our approach based on the feedback we receive. But in a way it’s more than that – we don’t just listen; we actually act on what they say. We have no limit on our call times to ensure that we can meet customer expectations and needs every time because we understand that excellent communication is fundamental in every relationship – it’s no different when it comes to customer service.

It’s also important to ensure that we effectively communicate with our customers before, during and after the sale of an experience to ensure we’re there every step of the way. Our ‘How was it for you’ survey is sent to every customer after they complete their experience, and we constantly benchmark our customer reviews and use this feedback to better what we do.

Customer centricity means putting our customers first with their best interests at heart.

Hear more from Roslyn and a brand new line up of Customer Experience experts during the 7th annual Customer Experience Management. She’ll be delivering the presentation. ‘Case Study: Happy Employees Equal Happy Customers’.

Find out more by visiting www.customerexperiencemanagement.com.au   – be sure to check out the resource centre for more exclusive interviews, articles, past presentations and top tips.