CMOs: Look to operational risk leaders for insights into achieving operational excellence
Focusing on operational excellence in customer experience is a key trend for 2017. It’s also a strategic way to change the culture of organizations that have committed to customer experience (CX) transformation even though mid-managers and employees have not fully embraced a new mindset and changed their behaviors.
Many companies spend massive amounts of money on CX technologies (omnichannel comes to mind) without making a dent in how they treat their customers. Often the call center interaction, the chat experience, the retail store engagement, and the direct sales interplay lead to utterly dismayed customers who expected decidedly better treatment. All the investments in CX technologies that provide delightful moments of truth in the customer journey can only pay off if the employees who engage directly with customers provide a delightful, helpful, rewarding customer experience. But many leaders are flummoxed: how can they create fundamental changes in often entrenched employee behavior? It’s not easy.
While customer engagement is vitally important to organizations such as retailers, banks, insurers, telcos, direct-to-consumer manufacturers, and government agencies that serve citizens, very rarely – if ever – is someone’s life on the line or accident is waiting to happen as a result of poor customer interaction. Yes, terrible customer experience can, for example, lead to losing an extremely high-value consumer or a top B2B customer that goes to another supplier for better service. The financial ramifications may be enormous, but usually the consequences are not life-threatening or disastrous. Because the stakes are not so critically high that failure is not an option, companies that serve customers in the call center, in stores, over the web and so forth may not pay enough attention to changing their employees’ behavior, providing better training and incentivizing their employees to achieve true operational excellence.
However, companies with inherently high-risk operations must take operational excellence and change management seriously–as if the stakes could not be higher. These types of companies include discrete and process manufacturers, utilities, oil and gas, mining, and government agencies such the military, homeland security, intelligence, and fire and rescue. It is their calling: without organizational excellence, stakeholders or employees may be at extreme risk.
I recently read an interview with an executive at one of those high-risk companies, published by the PEX Process Excellence Network. Bonnie Schwartz is vice president of environmental health and safety at Calpine, America’s largest generator of electricity from natural gas and geothermal resources. It’s a $6 billion Fortune 500 company with over 2,200 employees. I’ll summarize the main points in the interview that provide examples of how to achieve change management and operational excellence. Here are the main points she made:
- In order to address operational excellence, organizations must first address their most strategic issue driving the need for operational excellence. (In her company’s case, it is environmental health and safety; for CMOs in customer service companies, the driving issue would be an intense focus on customer experience management.) The CEO level sets the tone, Ms. Schwartz believes, then the message is driven throughout the organization because employees respond to what leaders do and say.
- Employee incentives must be aligned to operational excellence. Identifying the right incentives is essential for changing behavior and building operational excellence. Once incentives are in place, she believes that a culture of searching, identifying, prioritizing, and mitigating risk should be implemented along with the right tools and knowledge to assess and manage the risk that undermines operational excellence.
- Change management must focus on jobs in the real world. Often, job requirements vary in small and large ways every day and employees need to be prepared for larger-scale culture change, as well as variability in daily tasks.
- Training and educating employees is key for addressing risk and operational excellence. All employees need to understand the risks inherent in their jobs and be prepared to handle those risks. Educating employees also includes finding the right people for the right roles.
- Continuous improvement is essential to operational excellence. Once the right processes are developed and deployed, Ms. Schwartz says, “from there, [you] can build in feedback loops to continually plan, check and adjust. This is a continual process and it’s important to build a culture which enables this plan of continuous improvement.”
- Creating a management system is vitally important but often skipped. “Companies should be asking ‘how can management systems provide a framework which fits into current practices and priorities’ . . . If we use this as a tool to help us work on the high risk activities, it enables us to cut down our to-do lists and prioritize efficiently.” Implementing this type of management system with a feedback loop starts with a top-down process that ultimately changes how work is done and perceived on a daily basis.
For more insights from this interview, download “Laying the Foundation for EH&S Excellence.” If you would like to learn more about operational excellence and change management, check out the Operational Excellence & Risk Management Summit in Houston, Texas, February 7-9. I plan to be there as well.