Learning to Sense and Respond

Stephen Parry.Former Head of Strategy and ChangeFujitsu Customer Services

Independent Lean Service Strategist and Practitioner.CASE STUDY MATERIAL AND CONTACT DETAILS www.stephen-parry.co.ukTel: +44 7838 114 997 sgparry@aol.comNew Cranfield School of Management Case Study available.

Stephen Parry’s career in service centre operations spans over 15 years, during which time he has been responsible for building and operating large scale international call centres invarious sectors; IT Services, Retail Direct-Marketing and Financial Services.

He has extensive experience in the areas of customer service strategy, proposition development, organisational development, business process alignment, technology introduction, change and turnaround management.

Most recent role was Head of European Strategy and Operational Development for Fujitsu. In 2001 he was awarded both the European Call Centre of the Year award for Innovation and Creativity, and the European Call Centre of the Year award for best people development program.

In 2002 he took Fujitsu to the finals of the UK National Business awards for Customer Focus and they became winners of the 2003 National Business Awards for the Best Customer Service Strategy.

Feasible parts creating an infeasible whole.

Functional units with functional goals and targets

F1 F2 F3 FnF4

Independent SolutionsDesigned to Meet functionalTargets andGoals.

S1 S2 S3 SnS4

Customer Throughput process

Its not unusual to have thirty or more solutions lining up for the attention of Senior Management

How concerned is your customer with internal targets and goals?’

Feasible parts creating an infeasible whole.

Functional units with functional goals and targets

F1 F2 F3 FnF4

Independent SolutionsDesigned to Meet functionalTargets andGoals.

S1 S2 S3 SnS4

Its not unusual to have thirty or more solutions lining up for the attention of Senior Management

Improved Customer Experience ?

How concerned is your customer with internal targets and goals?’

Mass production legacy

Today, service delivery issues are emergent features of the Mass production paradigm

Organisations are headed by “Command and Control”, “Productivity and Profit” based thinkers

Middle managers are tasked with representing their departments in terms their bosses will understand

Line managers are taught to measure and control their teams using comparative methods, regardless of the work performed.“It is not necessary for any one department to know what any other department is

doing. It is the business of those who plan the entire work to see that all of the departments

are working … towards the same end.” Henry Ford.

• This has had its day…..….

Issues.

How do you create cross-functional unity?How do you measure service from the customers’ perspective?How do you identify and remove the causes of costs?How do you innovate new service offerings?How do you create a differentiated business?

Issues.

How do you identify new opportunities with existing customers?How do you realise the knowledge potential of your staff?How do you identify critical intangible assets?How do you create customer success?

Transformation: (Theory-to-performance model)

TheoryPrinciplesThinkingDesignOperationBehaviourCulturePerformance

TransformationHappens here

Change initiatives: (Theory to performance model)

Quality movement, TQMFish Re-engineeringCore-competenciesOutsourcingLean Manufacturing and ServiceFifth DisciplineHigh Performance TeamsPeople Centred LeadershipBalanced ScorecardSix-SigmaCRMMBWA MBO

Don’t do the ‘wrong-things’ righter!

Without a change in THINKING

these initiatives become Management Fads

TheoryPrinciplesThinkingDesignOperationBehaviourCulturePerformance

Em

erge

nt p

rope

rties

Case Study: Fujitsu. Consult, Design, Build and Operate IT infrastructures.

165,000 employees in over 65 countries

65,000 people in software and services

12,500 consultants worldwide

Leading in IT services

Asia Pacific #1

Worldwide #3

UK #3

Ranked in top fifty international companies** Forbes International 500 2002

Worldwide ITServices Revenue

$35.0B

$21.5B

$15.6B

$14.0B

Source: McDonald Equity Research – IT Services (15/10/2002)ASK FUJITSU…

Contact us on +44(0) 870 242 7998

Or Visit:www.uk.fujitsu.com

Case Study: Endorsement. Massachusetts Institute of Technology.

‘Through Sense and Respond, Fujitsu has achieved remarkable mastery in the use of staff and client knowledge to drive continuous improvement. In particular, they have converted customer knowledge into powerful drivers of business strategy.’

Dr. Joel Cutcher-GershenfeldSenior Research ScientistEngineering Systems Division and Sloan School of Management, MITCo-Author of Knowledge-Driven Work (Oxford University Press, 1998)

Case Study: Sense and Respond wins best customer service strategy.

The judges at the 2003 National Business Awards praisedFujitsu for demonstrating an entire cultural change around the needs of its customers and could, as a result of its customer service strategy, demonstrate business growth, innovation and success.

It’s not about IT, it’s about the flying passenger. Customer benefits driven by the call centre

“I can’t print”Ticketing,

Boarding Passes, Bag Tags.

Flying Passenger impact.Queues at ticket office.

Queues at check in,

Boarding delays

Missed connections

Customer dissatisfaction

Customer perception of bmi

It’s about making our clients successful.

It’s not about IT, it’s about flying aircraft. Customer benefitsdriven by the call centre

“I can’t access”Parts ordering,

Staff allocation systemFinance system.

e-mail system.

Impact on bmi staff.Aircraft repair delays

Unable to schedule Aircrew

Missed air slots

Head office administration delays

It’s about real people doing real jobs.

It’s not about IT, it’s about creating business value.

‘Fujitsu are enabling bmi to provide added value to its flying customers’.‘Using its sense and respond approach, in the past two years Fujitsu has reduced the level of calls to the bmi help desk by 40%. The time to fix has also reduced by 70%, both as a result of increased knowledge of the customer's business’

Richard DawsonCIO bmi

The Purpose:To keep bmi passengers flying through the provision of an effective, efficient IT infrastructure.

It’s about making clients successful.

Case Study: Customer service strategy: Background summary.

Drivers for change.In 1999, losing business (just meeting contractual obligations).High staff attrition, losing market share with no differentiator.

Challenge.To transform the organisation in order to understand and meet customer needs.

Critical barriers to overcome.Traditional organisational thinking, silo design, performance measurement, efficiency fixation.

Targeting the unthinkable. – this was not a quick fix solution.Transforming organisational performance, thinking, learning and measurement.Educating the marketplace to have higher expectations.

Choice

Freedom

Power

Performance is a matter of having

which is a matter of

withthe

Role Design

Processes and Procedures

Performance Measures

Policy

Technology

The organisation is a hindrance to both employees and customers.

Matter of Design

Organisational Transformation

to do.

What is Sense & Respond ?

A philosophyA different management approachA complete logicA new set of operating principlesA way of measuring the service from the customers perspectiveIt allows operations to take control of operationsIt works on People, People, PeopleGreatest distinction is the use of human intelligenceIt is now a core competency in a ‘better way of thinking’

Sense and Respond operating principles.

Deliver against customer purpose in every step of the value chain.

Apply end-to-end measures along the value chain.

Manage the organisation as ‘one system’.

Measure individual performance against customer success.

Measure front-line staff on creating value, managers oncreating capability.

Engage in the relentless elimination of corporate waste.

Three important areas for a truly customer-focussed organisation.

Bui

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hip

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Bui

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Cap

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SENSE what matters to customers

People

1.People

2.People

3.

DRIVE the service

Adapt – Evolve – Inform – InnovateRESPOND

Clients and their customers

Front-linestaff

Support organisation

Where is the customer value ?

1. 2. 3.Why the transaction. How we transact. How we innovate.

What matters to customers.

Business intelligence.

Measuring client business-impact, cost and benefits.

Innovate new services.

Develop client account.

End-to-end measurementof service performance in terms of: •Customer success•Costs•Revenue•Type, time, frequency•Forecasting customer satisfaction.

VALUE(Optimise)

OPPORTUNITY (Innovate)

FAILURE(Remove)

INSTITUTIONALISED(Re-think)

Customer environment Front-line staff Support organisation

Demand Profile: Which company is being successful?

VALUE(Optimise)

OPPORTUNITY (Innovate)

FAILURE(Remove)

INSTITUTIONALISED(Re-think)

Company A Company B

Traditional assessments might indicate these two companies perform equally

Taking action.

Operational Development

Product and ServiceDevelopment

SENSEwhat mattersto customers

Adapt, EvolveInform, Innovate

RESPONDV O F IOptimise

Innovate

Remove

Re-think

Value Demand data drives the entire organisation.

Consumers

or

Customers

Front-line

Operation

Training

and

HR

Sales

and

Marketing

3rd Parties

Technology Commercial

1. 2. 3.

Product

DevelopmentDemand ActionDemand Action

Value OptimiseInnovateRemoveRe-think

OpportunityFailure

Institutional

Sense and Respond transformation starts with understanding the user context.

Transformation begins at the user interface by understanding why customers transact and to what

purpose they use your goods and services.

Then identify how end-to-end service provision

creates value for users.

Only when you understand what value looks like from the customers perspective, can meaningful

action can be taken.

2.People

Understand how front line add value.

Measure the business against what matters

to customers. Demand Analysis.

1.People

Gather business intelligence and build

system map.

Understand what matters to users and

their customers.

Understand their environment.

Sense and Respond: What matters to customers?

Business intelligence map is then linked to the service.

3.PeopleDevelop

organisational support activities,

technology, processes, job roles, training, and people.

Sense and Respond: What matters to customers?

Business intelligence map is then linked to the service.

Sense and Respond: Putting it all together.

Front-line staff gathering business intelligence.

Throughput process

Where do your Customer and People measures fit in?

Leading-Predictive MeasuresFu

nctio

nal

End

-to-E

nd

No Matters to Customers Yes

Resourcing and

ZERO DEFECT SLA

AHT

Calls/Man/Day

CustomerSurvey

First TimeFix

Total ElapsedTime by demand type

Value SLA

Critical Customer Success Factors

Av Speed of Answer

Lagging Measures

Sense and Respond

SLAs are based on what creates

Value

Todays SLAs are mostly based on a

Zero DefectMentality

Transformational approach.

1. 2. 3.Understand what matters

to customers

Understand how the organisation responds

Remove organisational waste,optimise delivery

Develop new customer opportunities

Learning to sense

Learning to respond

EnterpriseValue

Framework

Mobilisation

Leadership

Accreditation

The transformation objective is to align the service to the real needs of users while optimising the value chain

Internal Fujitsu Service. Headcount 2000/2003 End of 1999 = 125 people End of 2003 = 30 people

30

40

50

60

70

80

July

Augus

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tembe

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Novembe

rDecem

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Janu

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ruary

March

April

May June

Month

Headcount(FTE)

2000/012001/022002/03

Internal Fujitsu Service. Monthly Costs 2000/2003

80100

120140160180

200220

July

Augus

tSep

tembe

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Novem

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Decem

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Janu

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ruary

March

April

MayJu

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Month

£(000)

2000/012001/022002/03

Internal Fujitsu Service. Demands (Calls + e-mails) 2000/2003

7,000

10,000

13,000

16,000

19,000

22,000

25,000

July

August

Septem

ber

Octobe

rNov

embe

rDec

embe

rJa

nuary

Februa

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hApri

lMayJu

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Month

Volume

2000/012001/022002/03

Internal Fujitsu Service. Demands per Advisor 2000/2002

350

550

750

950

July

Augus

tSep

tembe

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Novembe

rDece

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Janu

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ruary

March

April

May June

Month

Demands/Advisor

2000/012001/022002/03

Leveraging Value for Business Benefit

1-5%

MC

100% Profit

Opportunities:

Increase SalesRevenue

Decrease BusinessExpense

Reduce ServiceCosts

Benefit areas: Traditional Helpdesk Solution

Lower transaction costsLower Total cost

Decrease in sites andHeadcount

Quicker critical mass

ClientCustomers

ClientUsers

3rd PartySupport

SupportFunctions

Helpdesk

Client Benefit Areas.

Increased Customer Satisfaction.

Increased EmployeeSatisfaction.

Increased Revenue.

Reduced InfrastructureCosts.

Reduced BusinessCosts.

Benefit areas: Sense and Respond Management Centre

Client Benefit Areas.

Lower transaction volume

End-to-end process time reduction

Increased productivityHigher skill levels

ClientCustomers

ClientUsers

3rd PartySupport

Support Functions

ManagementCentre

Increased Customer Satisfaction.

Increased EmployeeSatisfaction.

Increased Revenue.

Reduced InfrastructureCosts.

Reduced BusinessCosts.

Increased user productivity

Greater technology utilisation

Appropriate self helpUser requirements

identified

Business intelligenceService alignment

Alignment to customer purpose

Decrease sites and headcount

Go to market propositions

Performance ManagementBest Value

Risk reduction

People1.

clients and their customersPeople

2.Front-line staff

People3.

Support organisation

Make and Sell

Organisational Behaviour: Old to NewSense and Respond

Measures related to the customer

Functional management to systems thinking

From blamestorming to brainstorming

Management to leadership

Making the numbers

No freedom to act

Customers come 2nd

Managers tell, workers do

Crisis management

No communication

Mass production thinking

Leadership andRe-education

Open culture

End-to-endmeasures

New measures related to purpose

True customer focusDeliver what matters

Deliver customer IT strategy

Leaders and empowered staff

MechanisticHired hands

Fixed product

OrganicHired minds

Product innovation

ThinkingOperation

Performance

From panicking ahead to planning ahead

Quotes: From the Industry.‘What makes these call centres stand head and shoulders above

others is their management method. It's generated an incredibly high level of commitment and motivation amongst the staff.’

Gary Fisher, Research Fellow. Centre for Economic PerformanceAston Business School

‘The Sense and Respond process has proved itself with very real benefits, not only to the clients but internally to the people involved, by way of job satisfaction, and by breaking down inter-department barriers.’

Alan Hughes, Client Manager. British Standards Institute, Management Systems

‘In essence, Sense and Respond helps to re-engineer customer support. Through a disciplined regime of continuous improvement,benefits have been realised in quality, costs and performance.’

Roger Camrass, Director, Client Business Transformation. Fujitsu Services

Quotes: From the Staff.

It [Sense and Respond] provided a total shift in my way of thinking, getting into the customer’s business and absorbing it. Putting the customer’s needs first, each time. Getting rid of the waste and concentrating on delivering what matters.

It [Sense and Respond] has allowed me to approach things from a different angle, look at the facts and disregard opinions and stories.

I now have the courage to stand up and present data and facts to show reality and to be committed to providing opportunities for others.

I have become much calmer. I can see the impact I can make without all the noise and drama.

It [Sense and Respond] has given me a much broader perspective and a new focus. I now see happy customers. I can now see what will make them happy. I am learning what matters.

I discovered a new way of thinking for myself and about the role I perform and that using relevant data can assist in changing people’s attitudes.