Does lack of management experience cause most contact centre problems? The perspecitve of the "Puritan Gift"

The blog has tackled strategic questions before, from SOA to CRM and from process to performance, but a new book has got me thinking. The book is the 'Puritan Gift' by Kenneth & William Hopper (352 pages, published by I.B. Taurus & Co.). It's on the Financial Times list of best business books of 2007 and has been extremely well reviewed.

It's a very interesting book and one that is difficult to summarise without loosing at least some of the depth that makes it so well argued. The starting point for the book are the questions: "Where does the Protestant work ethic come from? And how did America achieve such dominance in management for so long?", deep and important questions for business I'm sure you'll agree but while they might not seem relevant to the contact centre, the conclusions are very illuminating.

The book argues (very persuasively) that the rise of management as a 'profession' (rather than as a set of behaviours or values) destroyed America's management culture. It makes a strong argument that what it terms 'domain knowledge' (i.e. experience of the area in which you work) is crucial for anyone working as a manager in a given industry and that management in it's own right is not a transferable 'horizontal' skill that can be generically applied across all industries. The book is particularly acid and well targeted in its criticisms of business schools and their fads around building this belief in the 'professional manager' who has no real knowledge of the area they work in. This 'professional' can engage in high-visibility tasks like financial engineering or succession planning but does not actually understand basic business operations or know what most workers at the business actually do.

Of necessity, I've only provided a very brief summary, but there is a much better overview in this review on the Manchester Business School blog of Prof. Peter Kawalek and also the BBC is making available a short (7 min) and a long (24 min) video interview with one of the authors which I highly recommend. The book also has a website.

I hope the relevance of the book is starting to become more obvious. Contact Centres were set up to help people and yet are widely disliked. I talked about this dislike in an October post ("For a Friday - why are contact centres so disliked?"), but I feel now that I was still commenting more on symptoms than root causes.

It is my strong suspicion that many contact centre problems come from senior management setting objectives with no knowledge of what a call centre does. There are of course extreme examples, like the contact centre described in "Reporting - Having your cake & eating it", which managed to achieve a 230% annual agent attrition rate through its management system, but I suspect there is a much more general problem of unrealistic objectives behind so much of the dissatisfaction with contact centres.

A former colleague of mine, now non-executive director of a very organisation with very large call centres, confirms this suspicion. He regularly sits for a day with agents taking calls and from that he gains a far greater understanding of the problem areas for his organisation than he does from management presentations. Management have often never worked in a customer facing role and so have great PowerPoint slides on 'the customer experience' (and other abstract concepts) but no practical experience of what the customers actually do feel and which problems regularly crop up. In my experience, having worked as a call centre agent is one of my great strengths when working today with call centres. There's a big difference between talking (abstractly) about soft tools for motivating agents to perform certain behaviours, as so many consultants do, and my experience of being on minimum wage unless you got bonus for meeting your call targets. It's not that a nice environment isn't important for agent performance (see past posts like "Sometimes it's not rocket science....") but pay really does matter. As an agent I would have liked to give every caller the desired customer experience (as was suggested in various HR goals for agents), but I was paid bonus to wrap up calls in under five minutes. No surprises which mattered more to agents...!

Yet the fundamental reason behind the mis-aligned metrics, the agents incented to do things against the organisations interests, the poor customer experiences and the broken processes is that senior management are have often not experienced their organisations customer service or worked in customer facing roles. Were they to promote more from the shop floor or insist that managers regularly went back to the floor to take calls many of these issues might be resolved.

Yet the cult of the manager is insidious. When I suggested to one organisation that it might be an idea for the graduate managers to spend a period taking calls so they understood the business better, I got the response back that "...if we did that they'd hate it so much we'd struggle to retain them." This left me slightly stunned. After all, if the call centre experience was that bad, did they think the agents liked it much? Unsurprisingly, their high agent attrition rate reflected what the call centre was like, but lack of management understanding meant the problem not dealt with and instead was treated as 'cost'. In this case, (as Richard Dworkins describes so well in his FT article on the Puritan Gift), management decided to outsource the contact centre to save money rather than fix it. Of course they saved no money in the final reckoning as they ended up spending far, far more on advertising and brand to counter the reputation they acquired for poor customer service, and the cost of managing the outsourcer was greater than anticipated.

The core point of the "Puritan Gift" is that managing something that has not been experienced or understood by managers is likely to fail. There is no real substitute for "domain knowledge" and contact centres that are looking to achieve excellence would do well to build that into their thinking.

Why Canada might illustrate some coming European Contact Centre trends

Just before Christmas I was interested to see that the province of Nova Scotia was setting up a call centre association. This is primarily a business driven initiative (as you can see on their website), rather than the more usual government agency approach that I've seen in Europe.

My interest was partly because I knew some of the people setting up the association from when I worked with Scotiabank (a major employer in Nova Scotia), but it was also because the challenges they face seem very relevant to Europe.

In the past the Canadian Contact Centre market has been driven by two factors, firstly nearshoring operations as US companies looked to take advantage of a nearby, skilled workforce that was at least 25% cheaper than its US equivalent due to the weakness of the C$ and secondly by a strong domestic market. This is all changing as the US$ declines and the C$ appreciates driven by Canada's natural resources. This currency change is a long term trend and while it takes place, Canada will loose it's ability to compete on cost. Good news overall for the Canadian economy, but probably bad news for places like Nova Scotia on the far edge of the Atlantic and with limited natural resources.

Europe has in some ways a very similar challenge. The Euro has gained in strength during the current turbulence, and while this is not driven by a commodity based economy, the effect is the same as those pricing in Euros will not be able to compete on cost. For call centres in France and Germany this is perhaps not a major issue. For the German market, most possible contact centre locations (at least with native German speakers) are already in the Euro zone or are priced in the equally strong Swiss Franc. For France and the French speaking market the cost challenge comes more from Morocco and North Africa than within the Euro zone. I've covered some of this previously (in the post "Offshoring and mainland Europe"), but currency issues are likely to be minor factors for the French speaking market, as North African currencies may appreciate too with the rise in commodity prices.

The real challenge from the strength of the Euro will be felt in the more marginal areas of the Eurozone that are furthest away from the French/German economic centre. The Irish Republic is one are where the strength of the Euro has already caused inflationary problems and earlier this week RTE were reporting on a potential loss of competitiveness. While the Irish economy remains strong and has a very favourable tax regime, it is unlikely to remain able to compete purely on the basis of cost. The part most affected will be those Irish contact centres focused on serving the UK market. That part may struggle as UK pound weakens against the Euro and perhaps even reverses the traditional trend. Other areas whose contact centres that may struggle with a stronger Euro are Portugal (I would not be surprised to see more offshoring to Brazil or even Africa, especially Angola & Mozambique) and perhaps Spain.

In short, while a strong currency is generally a good thing, it does have significant implications for contact centres that previously competed on cost.

Security, Call Centres and Fraud

Fraud, especially around identity theft, is one of the hot topics in the UK at the moment.

Obviously, the UK government department HM Revenue & Customs losing the data of 25 million people has made it a more commonly discussed topic than it was before. Then this week, anyone in the UK who still didn't think loss of personal data was serious now has the example of Jeremy Clarkson to consider. Clarkson (a television show host & newspaper columnist) was so sure that the impact of lost data was over-exaggerated that he published his bank account number and bank sort code in his weekly national newspaper column, claiming that there was nothing to fear. As is now reported, he did have something to worry about. One of the readers of his column used his details to set up a monthly £500 direct debit from his account, as the charity the British Diabetic association is one of the many organisations that does not require a signature when setting up a direct debit.

All of which is jolly good knockabout fun, but risks obscuring a more interesting and more serious story (and one more relevant to the European Contact Centre blog).

Also this week, in a less reported story, an identity fraudster managed to persuade Barclays call centre to issue a credit card to an existing customer called Marcus Agius. This identity fraudster then used the credit card to withdraw £10,000 pounds from a Barclays branch. The more startling point of this is that Marcus Agius is not any customer of Barclays but is the chairman of the bank and has been on the board since September 2006.

I'm not surprised that a call centre agent didn't recognise the chairman by name (though alarm bells should perhaps have rung when he found at the employer during the application process!), as new or junior staff may not be very interested in executives at that level. The two things that do stand out for me in the Barclays case are that firstly the card could be applied for and sent out to an address that was (at best) open to interception and (at worst) totally different from that used normally by an existing customer of the bank. The second is that security measures like passwords failed completely to verify the applicant.

Now you may assume that in a call centre environment verification will always be a problem when a physical signature can't be presented and you can't see the face of the applicant. This is not the case.

I've written previously about Natural Language and Automated Speech Recognition (for example "Speech market share - the role of non-European languages"), and identity verification by voice is a natural extension of this technology. The problem with passwords is that they verify what you know, not who you are. Should what you know not be only known to you, then that knowledge ceases to become verification as to who you are.

Voice prints, or similar techniques of deriving a unique identifier from a voice, offer a much better way of verifying identity. I've mostly had experience with IBM and Nuance in this field but lately I've been very taken with the approach of VoiceVault. VoiceVault do seem to have taken a purer security approach to the problem of voice verification and I rather like that. There do seem to be significant variations in how each vendor approaches the verification problem and so far (though this is early days), I've been very interested in how the different approaches produce results. All of these potentially work with voice portal technology (though I'm primarily interested in applying them with CVP, the Cisco Voice Portal).

The big advantage of voice portals is that they provide an environment where applications can be combined and hence you can have layers of security. So for example, it's unlikely that speaker verification alone would be adopted, even if it could achieve 99%+ rates of verification. Instead, a combination of password, speaker verification and other measures could be deployed relatively easily in a portal environment to provide layers of security. That way even if one security measure is defeated others are likely still to work.

Would speaker verification alone have been enough to prevent the Barclays situation? I doubt that it would have prevented the situation by itself, but it could have highlighted the anomaly of the situation to the agent, and could have triggered further security checks and processes. In the end good processes will provide the security, what technology can do is enhance them and make it harder for them to be defeated.

Are Onshore call centre jobs always good news?

Normally I would always say "yes", but today I saw a story on the BBC, "Debt firm expands with 200 jobs", that did make me reconsider.

The two hundred UK jobs are always good news, but it's a slightly ambivalent feeling when the firm describes these jobs as being created because of "...rises in the levels of debt in the UK and the global credit crunch". It's not an area of financial services that I've done much work in previously, but it does seem to be one of the financial services sector growth areas for the near future.

Still, we'll see later today how bad things are when the Bank of England's Monetary Policy Committee meets to decide this month's interest rates.

Calabrio expanding in France

I'm not a regular reader of CRM Today, but I was interested to see the announcement that Activeo will become a reseller of Calabrio Workforce Management for the French market.

I suspect it's a good move, especially as Activeo will be selling it as part of its Cisco Unified Contact Centre Enterprise offering. I've posted previously on Workforce Management in Europe ("Workforce Management - Part 2 Vendor Selection") and I suspect the Calabrio offering is well timed. Holy-Dis are strong in the French market, but they are strongest for a more general workforce management for branch offices or small contact centre rather than the more specialised high-end contact centre where Cisco Unified Contact Centre Enterprise is usually implemented.

You can get a decent overview of Activeo's approach to Cisco Contact Centre here (mais seulement en Francais!).

Happy New Year - 1,000 new UK call centre jobs

I was wondering what blog topic I should begin the new year with. This good news story, "Call centre begins recruitment drive" in the South Shields Gazette seemed a very appropriate way of starting.

Garlands, one of the UK's largest privately held call centre companies is adding 1,000 jobs (100 in the first phase)to their South Shields centre. It's interesting to see that these are onshore customer service jobs, primarily for the telecoms/ broadband industry.

Now my experience of the telecoms industry is that many organisations have a high percentage of low margin customers and make their money on a much smaller percentage of high spending customers. In the past this has led to a focus purely on cost of service and for many organisations that meant looking at offshoring. It's good to see that the onshore is now a consideration again when customer service is a consideration besides cost.

In many cases, offshoring purely for cost led to a reduction in customer service quality (and as previously discussed in posts like "Offshoring and mainland Europe" and "On-shore Call centres in decline.... is that the whole story?"), that decline in customer service led to the brand value of the business being damaged. Offshoring should not be blamed purely for customer satisfaction declines though, any large change program focused only on cost would have reduced customer satisfaction. A good example is Powergen (now called EON), a big UK energy utility, who closed their Indian operations. The BBC reported their managing director as saying this was because Powergen were "...not prepared to achieve savings at the risk or expense of customer satisfaction". Six months later in Jan 2007 this seemed to have produced results as the BBC ran a story that Powergen had moved from last place on EnergyWatch's table of customer satisfaction to second place.

It's good also to see that Garlands as an onshore outsourcer recognise that they will compete on quality and innovation rather than cost. It's not just that they run Cisco technology in their call centres (they also use a number of other suppliers as well), but more that they have a strong focus on the quality of their workforce and the agents working conditions. I know recent surveys suggest that salary is a major driver for agent recruitment, but as I argued in my last post "Sometimes it's not rocket science....", it is a key factor in agent retention.

Anyway, a Happy New Year to all readers and I hope you have a pleasant work environment and successful year.