How to make your present less tense: fix the now, don’t just focus on what’s next
Many of the alternative-fund industry’s problems are rooted in the past: past processes, decisions, technologies. And despite manually intensive, inefficient, error-strewn approaches the industry has grown in complexity and scale. So good – so far. Match fundamental inefficiencies with an over-riding desire for growth and it’s tempting to overleap inconvenient issues in favour of market projections and a shiny future-state. Which is perhaps why so many service providers persist in prioritising new products and new business, ahead of real and current customer service.
Making matters worse are Client Service Management Teams, intent on deepening relationships while far distanced from the heavy lifting. An over-promise, under-deliver cycle evolves, infuriating frustrated clients further.
While individually small, these niggles combine into a chain reaction of normalised dissatisfaction and widespread under-performance. And it only takes one competitor to get a head start through improved service, although whether the service is actively good, or just slightly better than poorer rivals is only apparent after the deal is done: buyer beware!
It’s surprising that we don’t apply what we expect as consumers to what we deliver as providers. We expect to click and collect: activate account, scan your KYC and away you go. Forget the technology, dedication and super slick processes behind the scenes: our expectations continue their exponential rise. We never wanted the glossy brochure and overzealous salesperson. We like without even realising the benefits we’re gaining from cost savings going straight into more efficient (and more profitable) ways of giving us what we want, exactly when and how we want it.
Good service management begins with designing the right model for the most commercially attractive customers. All the essential elements without scattergun investment with the business focused on those interactions that have most impact on service and profitability growth.
My team and I spend a lot of our time evaluating ‘what good looks like’ for our clients. And in our experience, leading service providers share five principles for superior service provision:
1) Articulate the strategy succinctly: great business leaders have a simple, clear, succinct strategy message that guides their business.
2) Identify the most important clients: successful firms know, and focus on those customers most important to current profitability and future growth.
3) Concentrate on the touch points that satisfy these clients and raise demand: effective firms know themselves. They understand what activities have the greatest impact (positive or negative) on customer behaviour and service levels and reallocate investment accordingly.
4) Set realistic goals for implementation: efficient firms reality-check themselves regularly. They’re pragmatic about their own ability to implement wide-scale change; they realise smaller steps can be more effective, and more accepted by the teams performing the tasks.
5) Constantly revisit performance: good companies live in the ‘now’, continuously monitoring their performance and client expectations and adjusting their models accordingly. They understand that good service takes time to perfect and is evolutionary; bad service impacts fasts and lasts long.
The Blame Game
New technology can transform a business by radically increasingly productivity or eliminating labour intensive processes and humans love to blame systems. But when we look closely at document management, management information or fund accounting, what we typically find is a behavioural, or a structural, problem.
At some point in their past, most firms have introduced non-standard business practices. Now they have grown, these become barriers, not enablers, lacking the structure and standardisation the firm needs to scale effectively.
What brought us here may no longer take us forwards, particularly when the old ways haunt the managerial psyche. Before lurching towards any new technology saviour, firms need to identify the root cause or risk recreating a vicious cycle.
The good news is that a sound methodology can start to unlock complex issues surprisingly simply. We always look at:
1) Standardisation: current practices that reflect ‘special requirements’, and non-standard activities that are expensive to support and rarely charged for;
2) Internal services: teams which provide internal reports that are either not needed or where the time-cost outweighs the value;
3) New business acceptance: operations staff who are excluded from the new business / prospectus review process, leading to complicated services which should have never been agreed to;
4) Differentiating activities: a lack of understanding of which core competencies maximise most value;
5) Outsourcing: too much shadowing – which can be resolved through active engagement with the service provider or client;
6) Untrained customers: a failure to educated and train clients on the services you provide to ensure they really work for them.
Maintaining the edge
Corporate strategy is defined as choosing what not to do, and in our view, service excellence is defined by choosing what not to do well.
Excellence comes at a cost: the client pays for the premium service you offer. Or rather they used to, before market competition drove regularity. Any business wanting to deliver great service and maintain a competitive cost structure must compromise on some aspects of its offering. This allows funding to be funnelled directly to areas with the greatest impact on service perception. Failing to accommodate this economic reality in basic service design is probably the single biggest culprit of flawed service. Ultimately, quality of service is what the client values: nothing else constitutes quality. Service is not quality, despite what many managers believe, simply because it has significant cost or is hard to deliver.
As a business leader, your responsibility is to be fearless: move on from past practice; interrogate the present and focus relentlessly on delivering accurate, on-time and on-budget services your customers truly value. If you do, not only will the future take better care of itself – the present will be a lot less stressful too.