12 Lessons from a CFO that created a Customer Culture in the finance function

Culture Transformation

In my last blog post I described the customer transformation experience of the Finance & Administration support function in Telstra, a $25 billion Australian telecommunications company. Their CFO developed and implemented a vision of a “value service culture” (known as VSC) in which leaders and individuals viewed their stakeholders as customers and found ways of increasing the value (actual and perceived) they delivered to them. This transformation created a $15 million bottom line impact

In this post I summarize their 12 key learnings from this transformation.

  1. The senior leaders’ passion, ‘walking the talk’, ongoing monitoring and follow-through is critical to success
  2. Initially there is need for a Customer Engagement Council that guides the culture change. It works best if it is relatively small (5-8 members), has a mix of senior leaders and opinion leaders and focuses on overall planning and key initiatives. As embedding of new behaviors occur and support systems are implemented there is less need for such a group as responsibility is spread throughout the organization.
  3. Linking a culture change to a long term corporate or business strategy creates relevance and reduces perception that it is a fad.
  4. A set of guiding principles that reflect an emphasis on corporate values such as empathy and transparency is important in changing mindsets to embrace customer needs. It is necessary to continually emphasize these principles with practical examples to create the new cultural norms.
  5. Creating an emotional connection to the culture change and acceptance of a logical reason for urgency to change takes time in a large group. Creating a sense of fun, competition and reporting of “wins” in the short term can accelerate the diffusion.
  6. For Corporate Support groups that have limited experience in thinking about what they deliver from the customer’s perspective and lack a mindset related to delivering perceived value, the launch phase should provide concrete guidelines at the outset. A comprehensive communication strategy that continually provides examples of the new desired activities usually needs dedicated resources and focus to provide clarity.leading_culture_transformation
  7. Collaborating across lines of business can speed the desired cultural change across an organization. In disparate functions it takes time to find common ground for sharing. An initiative like VSC creates the common ground. Cross-fertilization of best practices makes the cultural change more exciting and effective and demonstrates to new staff the relevance and scope of the customer responsive culture. It also promotes collaboration and innovation.
  8. A clear framework and measurement toolsare vital to guide improvements and reinforce desired behaviors. These include:
    1. Customer culture measurement as a starting benchmark, then for tracking culture improvements
    2. Customer satisfaction metrics that point to areas that need improvement
    3. Customer focus behavior norms incorporated in manager and staff reviews and their key performance indicators.
  9. Technical people who have little experience in treating colleagues as customers will require a set of new tangible skills as well as an emotional connection that sees personal value in doing things differently. The emotional connection is essential for people to take “ownership” of the customer’s problem and follow through with a solution.
  10. Well structured workshops are valuable to alter mindsets and provide skills. These should be implemented as early as possible to provide immediate ‘how to’ concreteness to the desired change in behavior. Workshop attendees who represented all lines of business and all levels were generally inspired by the VSC initiative. Train-the-trainer follow-on enabled them to reinforce their skills, train others and leverage the benefits for the wider group. Also, management workshops to evaluate their own VSC behaviors as role models were useful in presenting a common picture of VSC across the entire group.
  11. People at all levels need to understand that behavior change is difficult. It takes more time than expected to embed new behaviors in an organization, particularly those that require new skills as well as a new mindset. A strong ‘command and control’ hierarchy is present in many corporate support functions because of compliance requirements. It takes substantial and continued effort to break the “police” mindset to enable people to take customer initiatives freely and without fear. Initiatives emanatingfrom the lower levels in the organization need to be encouraged, nurtured and reported.
  12. Culture change can be effected more rapidly in smaller groups, particularly roles that are consultative and rely less on systems that may be unaligned to customer needs. This means that in large groups, the new culture mindset, skills and processes must be effectively taken into all of the small sub-groups as quickly as possible to have the greatest chance of making them stick.

A culture change that produces a customer responsive organization makes culture one of the most valuable assets of a business. It is a organizational capability that can and should be measured and the profit impacts assessed. The end result of this VSC transformation was annualized savings and benefits of $15 million after an 18-month period. These benefits increased as the customer culture became more embedded.

Interested to find out more about how to measure and manage a customer culture? Visit our resources page here.

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