Compassion has always been
a driving force of humanity. This drive remains true in the
business sphere, where there are many examples of organizations
defining a higher purpose that is above the traditional accumulation
of profit as means of their existence. This may lead to a
competitive significance in the very near future.
This year the global future forum (GFF) held
a two-day meeting of senior executives from the retail financial
services industry to examine their perspectives on the future.
The group observed that they served an oversupplied market
that is highly regulated, is often distrusted by its customers
and that can stand to improve upon it’s customer service
practices.
Surprisingly, the group also agreed that they
had lost their purpose. This loss of purpose had led them
to the electronic, ‘self-service’ supermarket
model where volume of sales and cost reduction, done in the
pursuit of profit, are the guiding principles.
Nearly three quarters of respondents to our
recent GFF Pulse survey believe that by 2008 organizations
that differentiate their customer service practices will
enhance their market performance beyond others who have more
price competitive offerings. We appear convinced that excellent
customer service remains a winning strategy for the future.
Unisys and Management Today magazine has run
the UK Service Excellence Awards for the past nine years.
The most recent category winners - all chosen for the outstanding
customer service they provide - met in the south of France
to share their winning strategies. It soon became clear that
excellent service is all about people. More accurately: your
people. One by one the presenters shared how they hired for
attitude and trained for skill and how they demonstrated
respect for each other internally on a daily basis. As one
winner put it: “Hire nice people and treat them well.” This
sense of well-being will overflow into great customer relationships.
What also emerged is that many of these winning
organizations are inspired by a purpose other than pure profit
accumulation. We are living in an age with little sustainable
competitive differentiation and where regulation and technological
convergence are limiting opportunities for organizations
to take differentiated positions. The availability of information
makes it easy for empowered customers to make informed decisions
and as a consequence price will often be considered amongst
a list of other factors for reasons to buy a product.
It is becoming clear that we are increasingly
including ‘soft factors’ into our buying decisions.
These soft factors include an organization’s sustainability,
social responsibility, and environmental and ethical policies.
According to the Pulse, over 72% believe that the younger
generation will not seek identity from their work but from
what gives their life meaning. Companies who deliver both
will attract the best, most socially responsible talent in
the market.
One Service Excellence Award winner is an estate
agent with enthusiastic customer advocates and committed
staff who stay with them twice as long as their industry’s
norm. When you’re trying to form longer-term customer
relationships this could be a key factor in your competitive
position. Extraordinarily, this organization is owned by
three charitable trusts whose founder had a vision to “feed
the hungry and clothe the poor.” These trusts benefit
from over a million euros every year from this very profitable
estate agents activity. This business has a goal of being
the most trusted in their sector. In an industry which needs
to be regulated due to corruption, their demonstrably higher
purpose could be a winning formula.
But will this strategy make money in other
sectors?
Mervyn Pedelty, Group Chief Executive of UK-based
Co-operative Financial Services, identifies that 30% of his
profit can be directly attributable to his organization’s
stance on sustainability and ethical investment.
In looking at a future with a growing savvy
consumer and employee base, the key to attracting business
will be to have a well founded ‘higher purpose’ that
stands above pure profit. What’s yours?
© 2005 The Global Future Forum. David Smith is the CEO of GFF. Contact him
at david.a.smith@gb.unisys.com, and read similar work at www.thegff.com.
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