Planning and Achieving Change (CCA Research Council)

© Copyright 2008 See Business Differently Ltd.

Planning and Achieving Change

See Business Differently Ltd. Stephen Parry, Beverly Evans, Susan Barlow November 2008 V3.1

Price £95

CCA Research Council Report


Key Headlines Customer contact centres are facing unprecedented challenges and transformation is essential for survival. Pressure exists to improve customer experience, reduce operating costs, motivate staff and create differentiation. Traditional customer service models and call centre designs no longer meet the needs of the modern customer. This calls for a new approach to organisational design, development, leadership and change. So, where does an organisation begin? This paper outlines a number of new key concepts. Change Capabilities There are numerous types of change initiatives within organisations, from tactical improvements within the local workspace to large, strategic change to structures and technologies. In order transform any of these situations effectively, these simple questions must be asked: ‘What does the organisations change community look like? and ‘Does it support my current business model?’ This document will provide some insight into these important questions, and the answers will be unique to your situation. Operating Mode: There are many types of businesses ranging from simple, transactional businesses to high-value professional services. Trying to deliver high-value services in a transactional mode will be disastrous. A clear understanding of the operating mode is necessary to clarify your approach to change and the type of change you need to produce. Within this paper, See Business Differently provides a useful guide to help you determine both your current and future operating mode. Service Climate The Service Climate is the combined perceptions of customers, employees, managers and leaders; it is an outcome of the day-to-day behaviour of your business. It predicts the performance and long-term profitability of an organisation. Understanding your current service climate will provide insight into the selection of approaches required to create change in behaviour of both customers and employees. See Business Differently uses a service-climate diagnostic, Climetrics® (4), to measure how well the organisation, as a whole, identifies, understands and delivers value against customer needs. The soft stuff is the hard stuff See Business Differently firmly believe the key to successful change is the creation of change communities (change capabilities) that reside within or as close as possible to front-line operations. It is people who create change and it’s a change in their behaviours that sustains it. Even if you are implementing a change program based on technology, placing behaviours at the centre of your program will always deliver a better return on investment and improve both engagement and acceptance. ‘You get the behaviour you design for’. So how do we design better behaviours and infrastructures at the same time? To start, the organisation needs a change framework, a clear understanding of its chosen operating mode, the type of change capability it wants to create, and the kind of service climate it would like to establish.


Executive Summary

This paper outlines a framework to provide organisations with insight into the following questions:

• What type of operating model best suits our needs? • What organisational capabilities do we require? • What are the implications for our change management teams? • What type of leadership and executive support do we need? • How can we determine if our contact centre has the maturity to change? • What type of change approach should we use to gain involvement and commitment?

The Challenge ‘How do we translate an executive strategy into an operational design, implementation plan and our ongoing managing practices?’ And, ‘how can I influence the change agenda?’ Solution Approach What is required is a universal set of approaches and methods that can be used by any customer contact centre given their unique operational circumstances and maturity. Assessing Readiness for Change In order to move the organisation to its future state or change its operating mode, it is necessary to determine the elements that need to be removed, strengthened and created. Solution Design Having identified what needs to change, an approach needs to be selected and change elements sequenced into a route map. This paper will discuss various change models and highlight the critical factors that influence the choice of approach and route map design.


Approach This paper outlines a three-stage framework for designing, building and changing organisations to help organisations introduce new managing practices and operating structures. The change assessment framework and subsequent route map planner focuses on understanding the alignment between the following areas:

• Operating Model • Operating Mode • Organising Systems • Managing Practices • General Service Climate (i.e. operational performance and behaviour) • Delivery Capabilities

Particular attention will be given to the following areas:

• Ability to define and measure customer value and end-to-end delivery performance. • Ability to share customer data and operational performance information at all levels within

the organisation. • Ability of the organisation to introduce innovation and improvement. • Leadership styles and drivers at each level within the organisation.

Discovering the current state A clear understanding of current operational practices, capabilities and change readiness is required. In addition, the organisation needs to gain insight into the operational practices that need little or no change and those practices and capabilities that it needs to create in order to move to an adaptive service model, focussing on meeting ever-changing customer needs.(1) Information gathered during this exercise will need to be socialised with senior teams and provide valuable input into the future state design and implementation route map. The route map needs to focus on leveraging previous investments in technologies, practices and skills. Change Assessment Framework Executive teams are responsible for determining the market positioning strategy, offerings and business strategy, while operational teams need to create an execution plan or operating strategy. An example of the See Business Differently change assessment framework can be seen in Fig 1


Maturity Gap

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Executive Direction Data for these areas (highlighted in green) is usually provided by senior executives. Operational staff will need to translate these activities into an operational plan. However, it is not uncommon to find situations where executive teams have not clearly defined the company’s market positioning, offerings, means of differentiation or even the business strategy. In these situations, contact centre operational managers have two choices:

1) Do the best they can with the current lack of direction and hope they are doing the right thing.

2) Take a leadership position and use customer data from the contact centre to inform and drive the executive agenda. (1), (2).

Alignment between the executive objectives and operational execution is often perceived as an executive responsibility. However, operations are closest to the customer and understand customers’ deepest needs; operations, therefore, must take the leadership position if there is to be a real transformation in the customer experience, employee engagement and long-term profitability.

Market Position Strategy The market position strategy defines how the organisation positions itself in the market place against its competition. Some areas to consider are:

• Industry sector and customer groups. • Level of value creation (Are services simple transactions or professional

services?). • How does the organisation differentiate itself within the sector? • Market dominance, cost advantage, value advantage, price leadership.

Offerings and Differentiation An organisation must be clear about what it intends to provide and how. In addition, it should ask itself whether or not it has packaged its goods and services in an accessible form. Can customers easily buy the goods and services? Ideally, offerings should be differentiated in some way. Differentiation may come in many forms. The offerings themselves may be unique, or the way in which services and products are delivered may increase customer value. Business Strategy Business strategies usually comprise: Corporate Culture: Values, mission statements, leadership style, team work, flexibility/adaptability and change management. Strategic Intent: Futures, re-engineering, downsizing, organic growth, acquisitions, restructuring, share price, sales, profit, earnings, productivity, volumes, core business and new product or service development. Strategic Planning: Vision, goals, aims/objectives, analysis, business development.

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Operational Responsibilities Operations need to create an operating strategy and change approach to execute the overall executive strategy. Operating Model When considering change, a clear understanding and definition of the current and future operating model need to be articulated. (4) For example:

• Does the organisation have a virtual model, using technology to link a distributed advisor resource such as home workers?

• Are all delivery capabilities fully owned and controlled by the company? • Does the organisation operate a fully outsourced, on-shore or offshore

model? • Does it operate a centralised (one or two big locations) or distributed

model? • Does the organisation operate in-house call centres with outsourced call

overflow? • Does it operate a web-based, agent-less model? etc.

The list and combinations can be extensive; however, defining both the current and future operating model are key to understanding the later construction of a change/transformation plan. Operating Mode See Business Differently research (4) has demonstrated there are typically four types of customer service operations, each requiring different management focus, employee skills and customer engagement. Understanding the current dominant mode and future mode of operating will assist in the formulation of a change/transformation plan. Below is a brief summary of each mode.

• Mass Production: One size fits all

This is a spray-on service. It has low variation in types of offering; employee skills are basic and customer engagement is transactional. Competitive basis is commoditised into high-volume, low-value work. Delivery models usually include automation and off-shore solutions. Management focus is on costs and agent utilisation Change capability resides in centralised, specialist groups for all types of improvement and change.

• Mass Customisation: One size fits all with options The customer experiences more choice, but the model is a variation of the one-size-fits-all. The employee helps the customer select from a fixed menu of options. The customer experience and employee engagement, however, are relatively low. Competitive basis is commodity-driven with an emphasis on providing value-add. Delivery models include automation and off-shore solutions. Management focus is on cost, efficiency and the standardisation of customised options. Change capability resides in specialist groups for large projects and local specialists for process improvement.

Fig 2


• Mass Specialisation: The Department Store

The customer is offered more choice, usually (but not exclusively) under one roof or on the same phone call; however, customers must know which service they want, where to obtain it and integrate each one from different sources. Since employees possess deep specialist knowledge, they will engage customers at a much higher level, and the customer experience is personal and solutions standard. Competitive basis is in-depth specialities connected to expert communities. Delivery models use skill-based routing and expert ‘presence’ networks. These may include off-shore capabilities when professional skills are more valuable than cultural skills. Management focus is on developing knowledge within staff, capturing and reusing solutions and efficient solution delivery. Change capability resides in advisors for process improvement, local specialists for all other aspects of business improvement, centralised resources for project or program management for interdepartmental or technical change.

• Mass Adaptation: The Personal Shopper

The service will provide personalised advice to suit the individual. Employee skills are high and they will integrate and combine all solutions on the customers’ behalf in unique combinations, resulting in high customer and employee engagement. The customer experience, therefore, is personal and unique. Competitive basis is a trusted advisor and expert. Delivery models need to support high customer contact time, solution research and delivery effort. Management focus is on developing customer relationships, creativity, expertise, customer assurance, developing front-line decision-making and customer business outcomes. Change capability resides in the advisor community for engaging with customers, learning from customers, developing change plans and leading change. High-level project management for structural or technical change is usually found in centralised teams.

The operating-mode characteristics clearly illustrate how the underlying work-design principles impact the customer experience, employee involvement, management focus, delivery models, change capability and leadership styles.

Mass Production Mass Customisation

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making. Customer outcomes.

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solutions.Optimised Delivery.

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Improvement or Transformation? Organisations must ask themselves do they want to improve what they are currently doing or do they want to transform their business? If improvement only is needed, then the organisation should clearly identify its current operating mode and take steps to enhance it. If, on the other hand, the business needs to change what it does, such as moving away from remedial break-fix services towards providing managed services, then a transformation in the operating mode should be considered. Organising Systems Organising systems are the subsystems designed to control, monitor and enable effective and efficient deployment of operational resources. Some of these include:

• Reward and recognition systems • Governance systems • Management review • Fiscal control • Performance review • Process-management systems • IT reporting systems • Workflow systems • Resource and capacity planning systems, etc.

In order to facilitate and sustain change initiatives, consideration must be given to those organising systems that would create a barrier or accelerate change. Managing Practices Managing practices establish the conditions for an effective service climate, drive employee behaviour and produce the customer experience. (3) They are the methods used by staff and management for the planning, organisation and control of work with particular emphasis on: decision-making, performance improvement, innovation, customer-knowledge sharing, standards and change capability. An organisation should also consider these questions when evaluating its managing practices:

• What methods are used to determine operating key-performance indicators? • Does a mechanism exist for capturing customer needs and routinely sharing them with the entire

business? • What mechanisms are in place to help the workforce improve its workplace and end- to- end

processes, even when the process leaves the confines of the customer contact centre? High-performing customer contact centres that create long-term profitability, a superior customer experience and service climate pay particular attention to the managing practices that create wealth for the both the customer and the business.(2) These practices go beyond the day-to-day management of resources and the hypnotic drive to provide the fastest and most efficient means of processing work. Instead, they focus on the creation of customer value and the maximisation of employee potential.


Organisations, in order to differentiate themselves, need to consider if the day-to-day operation (front-line staff and 1st line management):

• Understands and interprets individual customer needs • Makes sense of customer needs and their implication for the business • Shares customer needs systematically across the business • Encourages first-line management to train front-line staff to listen and adapt to customer needs,

instead of simply directing and controlling operations to hit output targets. • Help employees improve their workplace and end-to-end processes (end-to-end, includes the

processes that leave the confines of the customer contact centre) • Involve front-line employees, who are most knowledgeable about customers’ needs, in the

improvement of products and services. Research (3) has shown that these areas have a significant impact on an organisation’s ability to differentiate itself and have an enhanced operational performance and a superior Service Climate. Service Climate The Service Climate is the combined perception of customers, employees, managers and leaders. It predicts the performance and long-term profitability of an organisation. See Business Differently uses a service- climate diagnostic, Climetrics® (4), to measure how well the organisation as a whole, identifies, understands and delivers against customer needs. Behaviour Many years of research have demonstrated that people cannot be instructed or coerced to behave in a particular way if the desire is long-term behavioural change. Our own Service Climate Management research (3) has shown that ‘You get the behaviour you design for’. The biggest influence on the behaviour of staff and managers is the managing practices adopted by the company in response to the design of the operation. It is no coincidence that behaviour in this model is shown as an outcome along with operational performance. The four operating modes: mass-production, mass-customisation, mass-specialisation and mass-adaptation will provide insight into the type of behaviour an organisation wants to create, as each operating mode requires different types of customers, employees and management behaviours. Often in the absence of a good operating system, companies resign themselves to checking and policing behaviours (coercion) as a means of mitigating the problems associated with a bad operating system. Maturity Gap This is a measure of how advanced or sophisticated the current operation is. Often businesses try to move an operation to a higher level of maturity without understanding how secure and confident people are with the current approach and their ability to take on new challenges. Foundation Gap Operational weakness will surface during a time of change. Therefore, before any change is contemplated, a close examination of how well the current operation delivers against today’s requirements is needed. A realistic assessment will determine if the operation is currently ‘just-coping’ when meeting today’s demands. The change programme will expose any operational weakness very quickly. Failure points can surface in the most unexpected way, throwing the change programme into disarray. It will be the change programme, not the current operational weakness that will come into disrepute.


Using the framework Stage One: Can we deliver today’s business? This identifies if the business can deliver against its current commitments and identifies corrective actions to create sound foundations. Stage Two: Can we deliver tomorrow’s business? The same framework is used to articulate new business requirements and the characteristics of the future-model. Stage Three: What is the change-programme design and route map? The organisation should evaluate design options, and it needs to select a change approach and design the route map. A very simple Red Amber Green system can draw attention to the areas most in need of definition, design and improvement as illustrated below:

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Defining the Change Approach Having defined the gap and identified the capabilities, a change approach needs to be selected. Every organisation has its preferred or established approach to change; however, it makes sense to leverage the existing change approach if it has an established track record of success. What Change Communities Does the Organisation have at its Disposal? There are usually a number of approaches available to an organisation depending on how they view responsibility for change and improvement. The established change community will illustrate the dominant leadership thinking behind change in general, either top-down dictatorial or bottom-up. Typical change communities are front-line operatives; specialist groups, either in front-line operations or central change teams; or senior, trusted advisors working with the executive teams. The diagram below demonstrates how a change approach should be selected based upon the organisation’s dominant change community set-up and the level of urgency behind the change. The scope of change (i.e. is it a unit-level change or a cross-functional organisational change?) needs to be considered. To overcome change resistance, a combination of top-down and bottom-up approaches are needed. This will create true involvement and workforce acceptance for new ways of working.

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The Difference between Front-line Involvement and Consultation Very often organisations choose a centralised, change-team approach to drive change without having first built up any front-line change capability. In these situations, employee involvement and commitment is very limited and change will encounter significant resistance, even failure. Employee engagement is usually limited to discussions and communication. This is not employee involvement; it is change consultation. Front-line involvement means the staff themselves are designing, driving and delivering change. Encouraging front-line operations to be involved in the early design stages or even asking them to create a new future state themselves will increase change commitment, aid communication and speed up implementation. To many senior teams this will seem like a loss of control, but the process is counterintuitive, providing greater control and increased change velocity.

Fig 5


Proactive and Reactive Change If change has become urgent and the organisation finds it is working from quadrant C, the opportunity for a more-considered, proactive approach will be somewhat diminished; however, recovery is still possible, providing there are high levels of communication and reassurance to the workforce. Organisations need to understand that approaches that are highly-reactive and urgent by nature become highly political and depend on position power for their execution. This form of change carries higher risks of alienation and failure. The strong advice emerging from change modelling is to build change capability into front-line operations on a daily basis. This will create a long-term, core competency that can be leveraged at times of crisis and reduce the stress of change programmes, spread the cost of training and, more importantly, gain more commitment and optimism from all stakeholders. It is clear organisations that can change rapidly are more likely to prosper in the new-world economies. Ultimately, a change approach will always be a trade off between building change-capability slowly, over time, in preparation for an undefined change, or leaving it until change is imminent. Changing the way the business operates and behaves Below (fig 6) is a diagram detailing how a telecommunications company decided that simply providing internet and telecoms solutions in various bundles, while the customer service teams treated all support calls as transactions would not create much-needed market differentiation. Their delivery and support models were working at cross purposes, providing a very different customer experience. The company also realised they had a choice either to improve their current operating mode from medium to very high in order to get beyond the differentiation curve by using a mode most operators were using or change the game by seeking a different operating mode. The company brought both the solution providers and customer service operations together, (they resided in the same premises but operated separately) created change communities within the front-line operation, designed change and improvement into everyday work, redesigned the measuring system and introduced targets based on customer outcomes not quantities supplied. After just nine months, the service climate had changed dramatically; staff were involved in improving the operation every day and developing new and innovative services. This was at a fraction of the cost of the previous operation models.

Capability Strength

Climetrics® : Service Climate Comparison Before and After

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Decision-making and responsibility changes

630It is my job to share information with my peers and managers.

5017The management team is committed to improving the quality of work

490My manager supports my decision when I have customer data.

820I help my organisation understand what customers value.

9515Understanding customers helps me make better decisions.

8314Understanding the customer improves my commitment.

10042Understanding our services allows me to take effective action.

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630It is my job to share information with my peers and managers.

5017The management team is committed to improving the quality of work

490My manager supports my decision when I have customer data.

820I help my organisation understand what customers value.

9515Understanding customers helps me make better decisions.

8314Understanding the customer improves my commitment.

10042Understanding our services allows me to take effective action.

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6816I understand how the whole organisation works for customers.

6613I am confident making decisions with customer data.

6317I use customer data to help managers make better decisions.

6515I can improve processes and methods to serve the customer.

830My data improves the quality of decision making.

6714I make decisions with the customer in mind.

4528I am involved in decision making.

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6816I understand how the whole organisation works for customers.

6613I am confident making decisions with customer data.

6317I use customer data to help managers make better decisions.

6515I can improve processes and methods to serve the customer.

830My data improves the quality of decision making.

6714I make decisions with the customer in mind.

4528I am involved in decision making.

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In fig 7, there are a selection of questions (before and after) highlighting how changing the operating mode and designing change capability into day-to-day operations resulted in a change in employee involvement and responsibilities. The company is now much more proactive and provides high levels of customer engagement and much lower operating costs. The biggest payback has been the transformation in the relationship between the company and its clients, by moving the business from crisis management to a predictive proactive disciplined adaptive business model, the company has obtained their clients trust and repeat business. This change was designed with behavioural outcomes at its centre, technologies, processes, service offerings, reward and recognition systems; management training and leadership development were all aligned to this purpose. Dual Operating Modes reveal an organisations true attitude to customers. Figure 8 shows the typical climate distribution for different industries. It is evident from our research, like the company above, a number of industries have two operating modes, one for the sales process and a very different one for in-life services (after sales or customer service). They pay much more attention to individual needs when trying to acquire customers than supporting them once then have bought a product or service. In addition where consumers/citizens have to comply with regulatory requirements, a mass production mode to service is often chosen. Fortunately, this is now changing, albeit slowly, as evidenced by the advances made in the way Inland Revenue and Tax advice services are currently being delivered. Data illustrates the cost of retaining a customer is a fraction of the acquisition cost and that most customers defect because of bad in-life service. However, contrary to years of evidence, organisations still create mass-production customer-service environments as a means of keeping costs down, when in fact, quite the reverse happens. The above case study demonstrates that it is possible to provide highly individualised-responses for both sales and in-life services and provide it at a fraction of the cost.

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Capability Strength

Climetrics® : Service Climate Comparison Typical Industry Distribution

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Consumer IT SupportServices



© See Business Differently Ltd 2008

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The diagram above shows the dominant service climate for a number of industry sectors. However, within each sector, a range of operating modes exists. It has to be said that only in one or two sectors there are companies that have actively moved away from the commoditisation of the mass- production and mass-customisation modes to create higher value services and better customer experiences found in the mass-specialisation and mass-adaptation modes. Companies that take a unified approach to providing high-level, responsive services for all parts of the customer life-cycle will retain their customer base and prosper over the long-term. At the end of the day, it’s customer purpose that defines value and dictates how the organisation needs to be designed, built and operated.

Fig 8


Footnotes and other white papers from See Business Differently.

1. CCA White Paper: Sense and Respond, New Principles and a New Vision for the Call Centre Industry. (Parry) 2. CCA White Paper: A Demanding World: How much value do you create for customers? (Parry) 3. CCA White Paper: The Service Climate and Customer Intelligence Workers. (Parry and Fisher) 4. Climetrics ® Call Centre Diagnostic: Translating the Service Climate into operational actions. (Parry and Fisher)

Further Information and other publications Book

The book outlines an innovative and proven framework for organisational change, which enables companies to move away from a “mass production” mentality to one of “on-demand adaptation’ and deliver greater customer-value right across the corporate enterprise.

Sense and Respond: The Journey to Customer Purpose. Parry, Barlow, Faulkner (MacMillan 2005)

Strategy White Papers

Measuring for Value. Transformation Pitfalls and Lessons. (Parry and Marr) Articles

Service Climate Management Cracking the Customer Code Seven Deadly Sins of Transformation and Change Gem a call centre transformation case study Office Products Direct: A Call Centre Turn around. Detailed Case study complete with project plans, task lists, organisational redesign, interviews and results.

TV BBC Documentary The Crunch Call Centre Change, Innovation and Creativity. Channel 4/Einstein CIPD. Sense and Respond Call Centres.

Radio BBC Radio 4 In Business with Peter Day: Lean Service in Call Centres (Listen again http://www.bbc.co.uk/radio4/news/inbusiness/inbusiness_20080131.shtml )

Website downloads: www.seebusinessdifferently.com Contact details Stephen Parry +44 (0) 7838 114 997 [email protected] Diagrams and Trademarks remain the property of See Business Differently Ltd. All Rights Reserved. Climetrics ® is a registered trademark of See Business Differently Ltd.