What does it take to embed values and effect cultural change?

Barclays Bank boss wants to effect culture change through new values

Today I read that the Barclays boss tells staff to sign up to new values or leave.  It makes interesting reading, the following paragraph resonated with me:

“Over a period of almost 20 years, banking became too aggressive, too focused on the short term, too disconnected from the needs of our customers and clients, and wider society. We were not immune at Barclays from these mistakes.”

Then I read the following paragraph and my mouth fell open:

“He said bankers pursued short-term profits at the expense of the values and reputation of the organisation, and in the coming weeks more than 1,000 staff would be trained to spread the new values and embed them throughout the bank.”

Any ideas as to what it is about this paragraph that stopped me in my tracks?  I can tell you that it is not the first part of the paragraph. No, what stopped me in my tracks is the following:

“…. in the coming weeks more than 1,000 staff would be trained to spread the new values and embed them throughout the bank.

I get that the top man at Barclays wants to effect cultural change. And he is using values as a pillar of the new culture.  So far so good.  My question/concern is centred on how one embeds values and roots cultural change.

How do you train adults to spread the new values and embed them?  

I know you can train people to use a fire extinguisher.  I have undergone that training.  I know that you can train some people – if you put in a five days of intensive role based training – to become great facilitators.  I have undergone that training.  I know that you can train people to use a new CRM system. I have undergone that training.  Can you train people to live specific values?

Yes, you can preach values to them. Yes, you can pressure them into going through the motions of spreading values. No, you cannot embed values through training.  You cannot get people to live value simply through training and spreading the word.  To think that you can do so is to fundamentally misunderstand the being of human beings, values and culture.

I notice that the values that I live, often without even noticing that I live them, arise out of the way my parents lived and thus how I lived as a child.  I notice that there are values that bore themselves into me slowly by virtue of training intensively to become a chartered accountant.  I notice that there are values that gripped me as a result of working with a wide variety of people when I was running companies that had gone into receivership or administration.  I particularly notice the creative values that sized my being-in-the-world after spending twelve months working for a creative digital agency.  Up to that point I had put analytical value on the throne and looked down on creative people, creative values, creative lifestyles. Now I value the triad of creative-analytical-systemic values and thinking.

Do we have values or do values have us?

Listen carefully, we don’t seize/live values, values worms themselves into us and eventually live us!  Yes, you read that right.  I am father to three and I can categorically state that their values are not the ones that I preached. No, they are the values that my wife and I lived.  How does that tend to happen?  Through a totality of interconnected references: language, talk, practices, equipment, paraphernalia, and projects pursued.

My advice to you and the top man at Barclays, forget the preaching, forget the training. Listen to Chris Bailey. Why? Chris, who has a post-graduate degree in anthropology, shed light on values and culture in his recent post titled Three Myths of Corporate Culture.  It is worth reading. Here is what he starts his list of myths with:

“Myth #1. Culture can be built, top-down.

Yes, it’s important for leadership to clearly articulate goals, values, and mission. But these elements merely provide direction and structure, the expectations of management. They are not the culture themselves. The problem is that management has come to see culture as one more way to institute controls over employees. If you read, “This is the [insert company name] way” when discussing culture, then you’re reading a top-down, executive mandate for what management wants the culture to be…but likely not what actually is. And just because the CEO says, “This is our culture” doesn’t make it true. It’s way bigger than that.”

To effect cultural change focus on equipment, language and practices

You might be new to culture change.  You might be new to the language I am using. And you might be wondering what is he talking about?  My response to Chris’ post on culture should clear up your confusion:

“Hello Chris

It occurs to me that you do have a richer nuanced understanding of culture. I am a simple guy and I strive to ask simple questions those to do with phenomenology. And so the question that I ask is where does culture reside? Put differently, where can I find it?

The likes of Khun and Heidegger have provided me with an access to that question. Culture lies in and is enacted in a totality of references that includes people, language, practices, equipment, paraphernalia, and projects pursued. If you get this then you get, for free, that the culture in marketing will not be the same as the culture of sales and neither will be the same as the culture in finance….

Sometimes the easiest access to influencing changes in culture is to change equipment, paraphernalia, language and practices. Let’s just take equipment and eating. What happens if I take away knife and fork and replace them with chopsticks? This little change does have significant ripple effects. Given time, it changes cooking and eating practices. Notice, I did not have to issue instructions, do marketing, deliver presentations, engage in propaganda, change KPIs…...

Sadly, culture is misunderstood, as you say, that most of what passes for culture change is pre-destined to failure.

Maz”

Summing up

You do not embed values and effect culture change by sending people to classroom training.  You do not embed values by preaching.  The access to effecting change and culture is through language, discourse, practices and equipment.  Oh, I forget to mention: it all starts with the man at the top and cascades downwards – that is to say that the man at the top has to be a visible living example/embodiment of the values in action through practices.

‘Shoddy customer treatment’: does the banking scandal unconceal the rottenness at the centre of capitalism and ‘business as usual’?

Welcome to the 21st century desert.  The  desert of nobility, neighbourliness, honesty, decency, integrity, responsibility and accountability. Welcome to the desert of moral purpose, moral leadership, moral values and moral conduct.

Given the recent revelations regarding the UK banks  you might be tempted to assume that I am talking about the banking industry.   After all the banks have been shown to:

And the Governor of the Bank of England has asserted the following

  • ‘shoddy customer treatment’;
  • ‘deceitful manipulation’
  • ‘excessive levels of compensation’;
  • bank staff have been ‘let down’; and
  • banks need ‘leadership of an unusually high order’.

If I am not talking about banks and the banking industry then who am I talking about when I talk about the ‘desert of moral purpose, moral leadership, moral values, moral conduct’?  I am talking about Anglo-Saxon capitalism.  Yes, the banks and the bankers cheat customers, mislead/deceive customers and the regulatory authorities and pay themselves way in excess of the value that they create.  Yet they are not the only ones.  Take a good look at the telecoms industry where ISPs mislead customer regarding download speeds. Or the deliberate practice of making it hard for customers to be on the right plan.  Take a good look at the gas and electricity suppliers.  Take a good look at the automotive trade especially car repairs. Or the software business where ‘ignorant’ customers are sold sophisticated software that they don’t need and/or will not be able to make good use of……….

Have you ever wondered why with all the talk of customer service, customer relationships, customer focus, customer engagement, employee engagement, customer loyalty, customer obsession there is so little of the genuine stuff?  I have.  And this is what I say:  underneath all this fine talk is a capitalist structure and mindset that does not value people, nor relationships, nor communities, nor the long term.  In this capitalistic system ‘relationship’ is simply moving from one transaction to a series of transactions that line the pockets of the company.  There is no commitment to genuine care for one another.  Engagement is doublespeak for getting the customer to buy more from the company, sell on behalf of the company (word of mouth, word of mouse), conduct customer service or product development on behalf of the company.  Engagement does not involve the company actually listening to customers, getting involved nor standing for the values/outcomes that matter to customers.

It is a system, a structure and mindset devoid of morality and humanity.  Morality and humanity are seen as a brake on money making – revenues and profits.  Money making is the be all and end all – the reason for existence of the company.   Customers, employees and suppliers are resources to be captured and used as productively as possible.  With customers the objective is to extract as much money as possible at the lowest cost.  Which is why customer service is atrocious and product quality is ordinary.  The same is true for suppliers -suppliers are usually set demanding targets and then squeezed for every penny and usually not paid on time especially if they are smaller and weaker.  Employees are unloved and feel unloved – the objective is to get as much out of them for as little as possible. Anglo-Saxon governments do a great job of colluding with big business: if you do not instill fear of destitution in the hearts and souls of employees then how can you get them to work hard for little pay?

Yet business is only a subset of the bigger system – society.  As in family therapy we can focus on the ‘bad child’ point out his flaws and ask/tell him to change or we can look at the bigger picture, the family, and as a more useful question: “what is it about his family that calls forth this ‘bad child’?”    And “What can this ‘bad child’ unconceal about the family?”  So the more useful question is this one:  “What does this behaviour of the banks unconceal about us, about big business, about our institutions, about our society?”  And having seen what we have seen are we willing to courageously face what is so and act?  Or will pretend that it just needs a patch here and there and go back to our seductive sleep like we did after the credit crunch secure in the dream that all is perfectly ok?

If you and I want a ‘world that works’ then each of us must play our part.  That means what we do and do not do matters – as customers, as  employees, as citizens, as voters. If we want companies to treat us better than we have to be ‘better’ customers  – buy only from those companies that merit our custom.  If we want companies to act ethically and treat people right then we have to act ethically and treat people right – including picking and working for the right companies.  If we want our society to work then we have to act and shape our institutions – including those who supposedly govern in our name.

Want to grow your business? Build a Roadmap to Revenue – sell the way that customers buy!

Why are you focussing on the Customer Experience?

Isn’t the answer something like:

  • turn more of the people who have a need for and/or an interest in buying the ‘products’ you are selling into customers of yours;
  • increase the happiness of the people who have bought from you (customers) because you have made it easy for them to buy what they are looking to buy.  And because what you sold them does the job they expect it to do for them / enables them to arrive at their desired outcome.  And because the experience of using your ‘product’ matches and/or exceeds their expectation; and
  • helps you to get more interested buyers to turn up at your store and/or website (without heavy marketing spend) because they have heard good, even great, things about you from the people who have already bought from you?

How exactly are you going to find out what matters to your customers and convert that into a roadmap?

The question is how exactly are you going to find out what really matters to your customers and then convert that into roadmap that helps the people who are in the market to buy (buyers) to buy from you rather than your competitors?  That is the answer that Kristin Zhivago has answered comprehensively in her book Roadmap to Revenue.   Roadmap to Revenue is a book that speaks to me, it occurs to me as being grounded in experience (not theory), speaks/points at the ‘truth’ as shown by experience and is useful/actionable.  What makes that good?

The tag line for the book says it best “How to sell the way your customers want to buy”.  In this book Kristin lives up to what she preaches in the book – she delivers on the promise set out in the tagline.  Roadmap to Revenue provides a actionable, pragmatic and robust method (and tools and tips) for generating insight into customer needs (as buyers) and converting this into an actionable roadmap for giving giving customers (buyers) what they are looking for and thus growing you revenues.

The skeleton upon which the book hangs, the heart of the book, is the Roadmap to Revenue method that consists of three steps:

DISCOVER is concerned with figuring out how to make buying easier for the people (buyers/customers) who would benefit from the ‘products’ you are selling.  Kristin gets that there are various ways of getting at this insight including interviewing employees, conducting focus groups and using social media.   She also gets their limitations.  Based on that understanding and the kind of actionable insight customer interviews provide, Kristin strongly advocate interviewing existing customers to get at buyers needs and experience.  Furthermore, Kristin is clear that these interviews should be carried out over the phone, not face to face.  Why?  Because, our customers are that much more open, more honest, more disclosing when this interviewing happens over the phone.  If you have questions/doubts then think back to the faux pass Barclays made in asking me for my feedback face to face.

DEBATE involves the key players in your organisation to take part in conversations where they discuss, analyse and prioritise the feedback provided by your customers in the earlier Discover step.  The objective is to come to an agreement on the “essence of your promise to your customers” (in my framework I refer to this as the value proposition) and to determine which buying category your ‘product’ falls into so that later you can determine/get to grips with the customers buying process.  Kristin recommends a 2 day offsite “Brainstorming and Planning Meeting”  to do the work that is necessary in this step.

DEPLOY involves taking all that you have learned and turning that into a “Buying Process Roadmap” for each of the distinct ‘products’ that you are selling.  This map will show: the different stages of the customers buying process; they concerns that show up at each stage; the actions they take; the questions that customers are asking/grappling with,;the answers that satisfy them; and the best tools for providing those answers.  Once the Buying Process Roadmaps have been constructed it is time to put together the “Revenue Growth Action Plan”.  This is the implementation plan which sets out what you are going to do to improve what needs to be improved, to fix whats broken, to create what is needed and is not there……

Highlights from Roadmap to Revenue

Here’s a truncated list of the stuff that jumped out at me, resonated with me, created value for me:

1. “In order for you to sell, someone needs to buy.  If you make it easy they will buy from you.”  This is the essential concept out of / from / on which the entire book is constructed.

2. “The fundamental problem: When you thinking like a seller, you’re not thinking like a buyer.”  I absolutely love this oneWhy?  It is the ‘disease’ that infects just about every Customer initiative and the people who are infected cannot see that they are infected!  So any ‘customer-centricity’ is always driven by the needs and vantage point of the seller and selling. 

3. “Nothing gets the attention of a customer or prospect more than giving them what they want”  Why?  Because most sellers don’t give buyers what buyers are looking for and want in order to buy.

4. “There are dozens – even hundreds – of ways to market your product or service.  Only your customers can tell you how they want to buy what you sell.” People inside your company are so disconnected from buyers that they fall for whatever is the latest fad (think social media) or the most convincing salesperson.  They forget that the right person to ask is the buyer – only she can give you access to her world.  Only she can help you to find the right ways to market your ‘product’.

5. “If the CEO isn’t speaking up for your customers, there’s nothing that anyone else can do – regardless of their position – that will turn the company into a customer-centric organisation.”  I absolutely love this as it speaks to my experience of what is so within organisations and why most customer-centric efforts wither.

6. “Branding is the promise that you make.  Your “brand” is the promise that you keep.”  How many brand marketers really get that?  How many CMO’s get that?  How many Tops get that difference?  That small difference is the difference that makes a difference – the difference between the sellers perspective and the buyers perspective.

7.  “If the product or service is substandard, the word will get around.  Marketing won’t be able to save it.  The Roadmap to Revenue system is designed to get people together with good products and services, not to trick people into buying bad products and services.”  How much of current business practice is the latter – focussed on tricking people into buying ‘bad’ products and services?

8.  “The critical characteristic is the function that is so important to the customer that it compels the customer to buy the product.”  This reminds me of the needed to focus, to keep present to the 20:80 rule – to concentrate on that which really matters and do that excellently.

9.  “Perception is reality.  More specifically, your customers’ perception is your reality.” That is the way that organisations should work.  And almost every single one that I have interacted with, worked for/with, consulted with does not practice this.  The default condition in organisations is the opposite – it is the reality of the people (with power) in the organisation whose reality counts everyone else is mistaken including customers!

10.  “Desire is what starts the person on his buying process.  However, as soon as he begins the buying process, his skepticism kicks in.  The more expensive and complex the purchase, the greater the scrutiny that the customer will apply to the purchase.”  Why?  This is clearly spelt out in this aptly titled post by Kristin: Why Do Buyers Agonize?  Because Sellers Lie and Minimize.

Final words and disclosure

Kristin has written a gem of a book and I wholeheartedly recommend that you put this on your reading list.  I’d go further and say don’t do what I did: buy it from Amazon and have it sit on my Kindle for a month or so.  I am grateful for Kristin for sending me a physical copy (free) and inviting me to review it on this blog.  It is only when the physical copy turned up that it got my attention and I started reading it.  Once I got started I had to read it all as I found it that insightful, that useful.  If you do read it and don’t get value out of it then I’d love to hear from you!

If you don’t answer this question correctly then your customer efforts are simply putting lipstick on the pig

Yesterday British Banks Gave Up The Fight Against Compensating Their Customers
Yesterday the British Banks (HSBC, Barclays, Lloyds, RBOS…) that ‘own’ the retail banking market gave up, reluctantly, their legal fight against compensating the millions of customers who were ‘mis-sold’ payment protection insurance (PPI): ‘Millions in line for PPI redress’.

The British banks are notorious for delays especially when it comes to handling complaints and refunds.   Today the FSA has instructed these banks to accelerate compensation payments: ‘Financial Services Authority wants banks to speed up PPI payouts’.

Was it ‘mis-selling ‘ or deliberately ‘ripping-off’ customers?
Whilst the newspapers use the term ‘mis-selling’ consumer groups and others describe PPI as a ‘rip-off’ or ‘racket’.  ‘How the PPI scandal unfolded‘  makes it clear that “Britain’s banks have been aggressively selling ‘ineffective and inefficient’ – but highly profitable – payment protection insurance for more than a decade.”

This is what the Citizens Advice Bureau said about PPI:  “Payment protection insurance (PPI) is sold to borrowers with the promise of peace of mind and reassurance that credit or mortgage payments will be covered if their personal and financial circumstances change for the worse.  However, many CAB clients find that they cannot make a successful claim on their policy because of exclusion clauses and administrative barriers to making a claim.  Premiums for PPI policies can add 20 per cent or more to the total amount to be repaid on a loan agreement, thus increasing people’s indebtedness rather than preventing it.”

The one key question that lies at the heart of the customer-centric orientation
If you read widely you will see there are all kinds of views on what it means to be customer-centric and no shared agreement.  As such all kinds of people and companies are claiming to be customer-centric.  If you believe you are customer-centric then I put this question to you:

  • Is it ok for you to make money by taking advantage of your customers trust, ignorance, biases and other cognitive weaknesses?

If it is ok for your and your organisation to take advantage of your customer then you are not and will never be customer-centric.  Why? There are two ways to answer this question.

The blunt answer is that you are self-centred and selfish. Given that, it is simply not possible for you to be other-centred including customer-centred.

The polite answer is that long term relationships are central to a customer-centric orientation and these relationships rest on trust.   Trust, in turn, rests on the three key pillars: honesty, fairness and competence.   As Peppers & Rogers say in Rules to Break & Laws to Follow:

Customers may forgive honest mistakes but will never forgive dishonesty.

This point is articulated rather well by Nils Pratley in the following piece: ‘The moral of this PPI tale: don’t rip off your customers’.

Incidentally, dishonesty literally sucks the heart out of many of your employees: how many people genuinely want to exert the best of themselves in dishonest activities?

If you wish you can stop reading right here.  However, if you have the interest then follow me and lots explore/probe the customer-centric paradigm a little further using the Be-Do-Have framework.

Have: what you want to get out of your ‘relationship’ with the customer
What does top management (‘Tops’) really care about? They care about what they are measured and rewarded on. And what is that? Ultimately it comes down to exceeding analyst expectations on revenue, margins and profits. This and the behaviour that it generates are discussed in this HBR interview with Roger Martin.

Do: the actions that you take to get what you want
Things get a little trickier when we get to the Do part. What do you have to do to get the results that you want? You can make the numbers through a whole array of actions. For example:

  • locking customers into longer contracts for example by moving from 12 to 18 month contracts for mobile phones (e.g. telecoms);
  • take advantage of your customers ignorance and sell them products (e.g. PPI) that are not fit for purpose (e.g. banks);
  • deliberately making it difficult for your customers to work out which product is the best fit for their needs so that they buy the more expensive product (e.g. telecoms);
  • making it difficult for them to stop doing business with you and switch to another supplier (utilities, broadband, financial services, hi-tech..);
  • cutting the investment in customer service by making it more difficult for customers to contact you and if they do then having the call handled by someone in a distant country;
  • ensuring that your products do what they are supposed to do, that they are easy to use and have high resale value (e.g. Honda);
  • making it easy for your customers to do business with you (e.g. Amazon, eBay); and
  • standing for a set of values, practices and products that connect with a specific segment of the population (e.g. Virgin, Apple); and
  • viewing yourself as being in the business of ‘delivering happiness’ (Zappos).

Given the breadth of choice that you have,  limited only by your imagination, how do you decide what is the right course of action?   You may be thinking that brand values might help here. They can if they are lived in values. They are useless if they have been dreamt up for marketing (influence / propaganda) purposes.

The BE domain is the source of all guidance on what courses of action are ruled in and ruled out.  So let’s take a look at that.

BE: existence, stance, character and values
The BE domain is NOT concerned with the personality you put on for show – to seduce the people that you wish to seduce.  Nor is it concerned with what you say or your intentions.

The BE domain IS concerned with your authentic self.  Specifically it deals with the issues of purpose, stance, character and values as an integrated whole.  A different way of looking at this is to examine how you behave when you are under pressure: what are you willing to do or not to do no matter what the personal cost?

At the organisation level you face a fundamental choice.  To BE the kind of organisation that prospers through honest dealing and creating superior value for customers.  Or to BE the kind of organisation that does whatever it takes to make the numbers – treating people (customers, employees, suppliers..) as objects to be manipulated for one’s own benefit.

The default setting, as illustrated by the British banks in relation to PPI,  is that customers are seen as objects to be manipulated for the benefit of the organisation. Where concessions are made to customers it is because of regulatory pressure or because competitors force that move.  In Martin Buber’s view this is the ‘I- It’ orientation.

Are your customer efforts simply an exercise in putting lipstick on a pig?
You and your organization become customer-centric when you refuse to make money by taking advantage of your customers.   That means practicing and living honesty and fairness.  Until you do that all of your Customer experience, customer engagement and loyalty initiatives are simply an exercise on putting lipstick on the pig.  You might reap the rewards now yet sooner or later the pig will show through and you will pay the price.  Let me end by quoting from Peppers & Rogers once more:

If being fair to customers conflicts with your company’s financial goals, then fix your business model or get a new one.