Leadership for happy staff and customers

Indicators of customer satisfaction show that executives who empower employees not only manage to hold on to valued staff, but also improve levels of service, as Iwona Tokc-Wilde reports

Improving customer service need not involve a radical change in policy or complicated technology. Adopting a different management style and company culture, together with customer-focused personnel training, can increase both employee satisfaction and customer engagement. 

The traditional “command and control” structure of organisations may no longer be fit for purpose in a connected world, where both employees and customers want to be engaged differently. “Today’s team-based organisations respond best when their leaders are with them, not above them,” says Rachel Barton, head of Accenture’s Customer Strategy Practice. 

Some companies are, therefore, moving away from a hierarchical structure to one that is flatter, with fewer or no levels of middle management between staff and executives. 

So-called flat organisations tend to organise themselves around the work that needs to be done and not around people occupying specific job functions. Time etc is a virtual workforce platform that provides services to businesses worldwide. Three years ago they switched from an upwards flow of work and reporting to mutual delivery, says founder Barnaby Lashbrooke. 

“This means everyone, including me, delivers whatever is needed to other people in the business in order to push things forward,” he says. For example, Mr Lashbrooke now deals with every client complaint personally. 

“But I still make sure the team are fully involved,” he says. “When they see how seriously I take every complaint, it hammers home the importance of customer satisfaction so they are getting better at resolving issues before they turn into complaints. It’s also good for clients to see the founder cares about their custom and that no complaint is too small.” 

Employee engagement statistics

Despite significant growth in the last few years, Time etc receive fewer than ten complaints a year. Mr Lashbrooke points out it was the mutual effort that has led to all complaints being resolved satisfactorily in the last 12 months. “We’ve also seen a significant increase in team retention and morale since switching to this way of working,” he adds. 

In flat or flatter organisations, leaders seek their employees’ opinions regularly and act on them. “Engaging your workforce as equals, taking on feedback and keeping the dialogue open through every channel are all ways to flatten the management structure,” says Ms Barton. 

Employee engagement at London Overground Rail Operations (LOROL) has been central to its success as the fastest growing UK rail company since privatisation. HR director Darren Hockaday says: “The way that LOROL has always approached engagement is simple yet highly effective: you regularly and consistently ask employees what they think, you analyse and think about what they’ve told you, you take appropriate action, and then tell the employees what you’ve done and why.” 

At LOROL, improved employee engagement now equals improved customer satisfaction. As engagement rose to 91 per cent in 2014, so did passenger satisfaction, which at 91 per cent nearly doubled from 57 per cent in 2007. 

CULTURE AND TRAINING

Four years ago insurance company Cornish Mutual flattened the management and delivery of their personnel training, changing their corporate culture in the process. “Every employee in the company, from managing director to administrators, has been trained in coaching skills,” says Sharon Plowright, head of operations. “Out of this has grown the company’s ethos of ‘training for all by all’ and in the last year more than a third of employees were involved in passing on their skills and experience to others.” 

Employees at Apple's Genius Bar
Employees at Apple’s Genius Bar

The fact that all staff, regardless of position, can now deliver customer service training was “a conscious move from a culture which was highly compliant, dependent solely on people following procedures, towards a culture focused on customer experience”, says Ms Plowright. Since the move the company has won several national customer service training awards for its high standards of customer service. 

Research has consistently proven a link between happy employees and happy customers

“Our net promoter score, an indicator of how likely our customers are to recommend us, is industry-leading at +78 and customer retention rates are consistently over 90 per cent too,” she says. 

Lawrence Jones, chief executive of internet hosting company UKFast, says their net promoter score has also improved, from +50 to +70, since he invested in an in-house training department last year. 

EMPLOYEE AUTONOMY

In flatter organisations, front-line staff have a bigger say in how they deal with customers, which has direct impact on customer experience. At John Lewis, staff work on the premise that the customer is right and they just need to solve any problems as quickly as possible. What they call “heroic recovery” contributes to John Lewis scoring the highest marks in various customer satisfaction surveys year on year. 

The world’s best hotels would not be the world’s best without their employees having almost complete autonomy, says Phil Anderson, client director at Ashridge Business School. “When I recently visited the Ritz Carlton in Singapore, staff were able to spend up to $2,000 replacing or repairing any item damaged by guests, without seeking approval,” he adds. 

GO THE EXTRA INCH

De Vere Hotels and Village Urban Resorts have a new customer service initiative called Going the Extra Inch, which empowers staff to take action to exceed their guests’ expectations. People development director Mike Williams gives an example of an employee who, working breakfast service, overheard a guest saying they preferred firmer pillows and went out at the end of her shift to buy them. 

“We’ve also created VIPs – Very Informed People – in each hotel, who look for ways to improve customer service, and who then present their ideas to their hotel manager and the company executive team,” says Mr Williams. 

Mr Anderson insists that in call centres and similar organisations, staff simply must have autonomy to be effective in dealing with customers. “First Direct are an excellent example, they are truly a one-stop shop,” he says. 

At Wahanda, an online bookings platform connecting consumers and beauty businesses, the customer service staff are allowed to make judgment calls and issue credit notes without reverting to line managers first. “Our tech team aims to turn around any issues with the site within 24 hours, so our combined efforts have resulted in pushing up our net promoter score to over 70,” says Wahanda’s chief executive Lopo Champalimaud. 

When employees have a bigger say in how and when they work, and get incentivised to deliver results, this too leads to better employee satisfaction and engagement, and to better customer service. At Wahanda, there are no limits on holiday allowances. “We simply trust people to do their job and they use their good judgment when it comes to taking time off,” says Mr Champalimaud. 

UKFast gives £1,000, £500 and £250 to the top three support engineers at the end of each quarter. “Earlier this year, high-performing engineers were also taken on an all-expenses-paid trip to Las Vegas,” says Mr Jones. De Vere Hotels and Village Urban Resorts celebrate their best employees at annual employee awards. 

“Research has consistently proven a link between happy employees and happy customers,” says Ms Barton. De Vere Hotels and Village Urban Resorts have run their own comparisons of their employee engagement scores for each hotel against their customer service measures, discovering a compelling correlation between the two. “Our three hotels with the highest customer satisfaction scores of over 80 per cent are also the top three when it comes to employee engagement, again over 80 per cent,” says Mr Williams.