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British Gas Transformation Transcript

Joe Dyer Director of Customer Service, British Gas

Delivering Through Our People

I. Preamble

I was thinking about Nick’s analogy about the fuel, so I have an ad lib addition here. If the data is the fuel, and the technology and process is the vehicle, I pose the thought to you of which racing car in a Grand Prix won a race without a driver? I am going to be talking about the strategy around the people and the culture; how we are executing against this strategy, and how this ties back to the shareholder.

II. Pillars of Key Strategy

To summarise what you have heard so far, you heard about the data segmentation strategies, and the packaging of a customised offer. You have heard about the automation of processes and systems that enable that. You have heard about all the re-engineering that is going on. If that is the foundation of our transformation, then people are the piece that really brings it all together. People are the piece that is going to execute. The real challenge is around thousands of people, and that is where the analogy to the racing car breaks down a little bit, because that is one driver. We have to execute, and are executing, by enabling thousands of people. In the slide, what you see are the segmentation systems and processes being the foundations, and the columns being the pillars of the key strategy that will drive us delivering an enhanced customer value culture. I want to talk briefly about these pillars, and in a little bit more detail about what we are doing against each of these.

III. Empowerment

Starting with managers as leaders, this is about focusing our managers on leading and developing our front-line agents, which is not an insignificant challenge, because of the thousands of people involved. You heard Mark talk about empowerment earlier on, and empowerment is going to be a key element of our strategy. I can tell you that, from my background, and I have worked for some pretty well-known companies – I heard somebody from Citigroup here – I have worked for Citigroup, and for American Express, and I have most recently moved from Capital One, to mention just three. I visited two of our sites and met front-line agents and managers, and I have met our core team. I can tell you that we have great people at British Gas, deeply caring and with a deeply rooted level of knowledge. Our challenge, and our vision and transformation is about enabling those people to drive excellent service and deliver customer value. This is a key element of the strategy, and of delivering the one and done first point of contact resolution strategy.

Organisation design is about leveraging this foundation, and these systems and simplified processes, to re-align ourselves from a customer-focused perspective, as opposed to the internal, functional types of perspectives, and enabling the one and done, single point of contact, one-stop shop.

Some of you may ask what the difference is between ownership and accountability, and empowerment. It seems like the same thing. Actually, it is vastly different, because with empowerment comes a significant amount of accountability, because one cannot hang one's hat on "I obeyed this rule and followed that escalation process". The ownership and accountability will rest at the point of contact to deliver the results. We will be talking about that, and it is about doing the right thing. It is about leveraging knowledge and a deeply caring culture to execute at the first point of contact, resolve the customer problem, and deliver the customer value, which, ultimately, drives the shareholder value.

IV. Reward Structure

You already heard a little about the reward structure. We are re-aligning the rewards structure, and I will talk briefly about that. That needs to promote the right kinds of behaviour that further drive customer value and shareholder value. All of that comes together with delivering personalised service.

V. Personalised Service

Personalised service is an interesting concept when we are the size of British Gas, because it is about creating the perception of smallness and uniqueness from a customer perspective, while still leveraging the size that we have to drive economies of scale cost benefits. That is what this is all about, which ultimately drives customer value and shareholder value.

We have begun a comprehensive programme to execute against this. Managers, as leaders - I would say to you that training is going to be a common theme across all five of our pillars, and we are certainly investing a great deal of resource, time and energy on leadership development and training for our front-line managers and senior managers, to become effective coaches, be there for our front-line agents, mentor and develop them, and work on broadening our relationship with our customers. Equally importantly, they will deepen the relationship with our customers, and that is what retention and prevention of churn is really all about.

Empowerment is easy to say but hard to do. We are committed to continue driving this through. You cannot just go out and say "You are empowered." It is about defining the decision-making frameworks that are going to enable our front-line agents to continue to take the accountability for resolution at the first point of contact. It is about delivering that one and done, which ultimately drives reduction in call volumes, and I will talk about that in a second. It is at the very core of our one and done expectation.

Organisation and design leverages simplified processes to re-align ourselves. We are driving deeper into a concept of a virtual call-centre, and our intent is to have at least 80% or more of our calls handled at the first point of contact, and leveraging the capabilities that we are building to the fullest extent, further driving down our cost to serve.

VI. Customer Satisfaction

We know, from our market research, and I do not know how much you have looked at other companies’ market research, that there are a couple of key indicators or key dissatisfiers in most customer satisfaction measures. One of the leading ones is around transferring of calls, and the customer not being able to talk to the right person the first time. The organisation re-design will help to drive that down, and you heard that from Paul earlier on, with the one and done, one-stop shopping.

Ownership and accountability is a little different to empowerment, but with empowerment comes accountability and doing the right thing. A key element of this is also around re-aligning our metrics, to move from volumetric types of metrics – which I am sure most of you are very familiar with from call?centre environments – to focusing on getting the customer value right and doing the right thing. I had an interesting training leader in Indianapolis who used to say to me “Joe, you have to inspect what you expect”. That is what this is all about. You will see that we are talking about something called the Balanced Score Card – and this is something we are deploying today – which will include measurements at the individual level around quality, accuracy, productivity, and driving customer value.

VII. Feedback

If you can remember back to Nick's presentation and his diagram that showed the flow from data to personalised service, at the bottom was a return arrow. That is the feedback process. We have to gain and glean information about our customer at every single contact. Creating the feedback mechanism is not just about the individual customer, but about generalised opportunities that our front-line agents see every day, and creating the mechanisms to capture that information and feed it back in, so that we can learn and continue to improve. This is going to be a key piece of ownership and accountability, and our front-line agents are going to take ownership and accountability of that.

As you have already heard, we are in the process of re-aligning our reward structure, and a significant portion of our front-line agents' remuneration will be around variable compensation related directly to performance, to the balanced score card, and driving customer value.

VIII. Summary

In summary, what I would like to say, just to pull it all together, is our customer-focused culture will drive, and continues to drive, great customer value, and it is enabled by knowledge of the customer, automated easy-to-learn systems, simplified processes, delivered by great agents and leaders on our front lines, highly trained and deeply caring but, more importantly, empowered to resolve at least 80% of the problems at the first point of contact. You can see that it is our intent to reduce our front-office call volumes by 20% as a result of this further driving down of our cost to serve. It will be supported by continuous feedback and development, with a common set of principles that underline our fundamental business values and how we do business.

I would like to close on that and open it up to questions.