It’s a good question and one that was addressed by key private sector business leaders Brian Dive, Managing Director of DMA Consultancy and Anthony Thomson, Chairman of Metro Bank this morning. The session, chaired by Chris Johnson, UK Human Capital Leader at Mercer, aimed to draw parallels between the work of councils and some of the UK’s largest companies in reducing workforce costs while creating healthy organisations where innovation can thrive. What makes an unhealthy organisation? DMA Consultancy’s research suggests that many organisations suffer from too much hierarchy and this can make for an unhealthy organisation. There are usually three issues:
1. Pay grades = hierarchy
Too many pay grades in an organisation can appear to create a hierarchy. It’s almost as if pay grades some how migrate into being the system of organisational design in itself.
2. Too many layers of management
This dilutes the accountability of the organisation, because less people are given ownership over decision-making rendering them less effective.
3. Titles
What do our job titles mean? Are titles real and related to the job, or just false in nature? They don’t always align with clear accountability. If you put someone in a position with clear accountability and responsibility, they will thrive, if you take away decision making, they will have no ownership and therefore lack impact. A different approach Brian Dive from DMA Consultancy went on to describe their approach to organisational change. He explained that many chief executives are trained for top down decision making, but that if you look from the bottom up, you will start to see where value added decisions are being made. Their approach starts by interviewing people across the organisation about their role. They then look at each level of the organisation and evaluate where the value added decisions are being made. The DMA Consultancy solution involves less layers of accountability – a maximum of five clear management layers. If you draw a comparison with military, the lines of accountability and responsibility are really clear, they have to be. The DMA approach aims for the same kind of clarity in other organisations. It is based on one idea only: are you adding value to your customer, your colleagues, your organisation? To find out more about the DMA Consultancy model, check out the London Borough of Croydon video on the LGA website. Jon Rouse, Croydon’s Chief Executive believes the potential savings could be around £2.5 million. Other clear benefits are improved communications up and down the organisation and more space for management to operate freely. Brian Dive finished his session by asking whether your managers like bonsai trees? Bonsai trees remain small because of their constricted roots. Are you giving your managers room to grow? Here to serve our customers The second half of the session was presented by Anthony Thomson, Chairman of Metro Bank. He gave great insight into his organisation’s vision and philosophy. The Metro Bank mantra is “We are here to serve our customers”. Local government can certainly identify with this. Metro Bank sees itself differently to other banks and this seems to be part of their success. They see themselves very much as retailers and their banks are called stores. We all expect our local supermarket to be open for us on a Saturday afternoon, so why shouldn’t we expect the same from our banks? For Metro Bank it’s about being there and being open when customers want to bank. The Metro Bank philosophy is about value. Value for customers. Other similar organisations would have people believe that price drives everything, but the truth is, it’s value that matters most. Service, convenience and transparency are key aspects of value and at the heart of everything is the customer. Creating a differentiated model • It’s not all about driving out costs – people want great service, so there’s no point in reducing your ability to deliver. You can’t cost cut your way to growth. • UK banks receive 20,000 complaints a day – surely this means it’s worth incentivising staff to give great service? Creating a culture that reinforces the model • Authenticity – everyone is talking about using social media to get people to engage with their business. However, they don’t then enable the use of these social tools in the workplace. You need to follow through on what you say you’re about. • Recruitment – Metro Bank’s key requirement on its person specification is a smile! You go into some places and they treat you as “an unwarranted intrusion on their day”. Metro Bank does not want its customers to feel this way. • Empowerment – empower your people to react to situation the way they see fit. Anthony Thomson told the story of an employee in the bank offering a customer a cup of tea and a biscuit when a transaction was taking longer than expected. It resulted in more business coming their way. An empowered employee made a small decision, but it had a big impact! • Reward – Metro Bank employees are told to shout about success. When something has gone well they bring balloons and doughnuts round to that person’s desk. Sounds like a nice place to work! • Measure what matters – satisfaction, complaints and advocacy. Every Metro Bank store receives a mystery shopper every other day and there are customer panels to gain feedback on service. They also use the Net promoter score as an indicator of advocacy. Relentless execution
The Metro Bank commitment to providing a high level of service to customers is shown through every small detail of the business. For example, they say they are open from 8am until 8pm, but in fact they open about 10 minutes to eight in the morning, so that if you’re a in rush you can come in and be seen quickly at 8 o’clock. Likewise, they don’t close until the last customer has gone. Anthony Thomson adapted the well known Jack Handey quote to illustrate the Metro Bank vision for understanding their customers. He says, “To first know a man, you must walk a mile in his shoes”. He ended on a helpful piece of advice, “Create fans, not customers”. Does your organisation have fans? According to recent LGCommunications research, 70 per cent of residents are satisfied with council services, but would you call them fans?
