Rise and Fall of a Roaming Empire part 3

Yeesterday, the story counted how a flawed system was implemented to meet a schedule with little visibility to the impacts of the company's operations. Today I pick up the story with how leadership responded.

So how did leadership respond? In a word, slowly. Customer Care leadership, at first, did not believe they were allowed to say the plan isn’t working. After all, this was a plan dictated by the CEO and CIO. If they communicated the catastrophe underway in their domain, would they be held responsible? As time passed and the awaited miracle did not occur, the scope and nature of the problem were finally communicated upward. Tiger Teams were created to quickly resolve the previously unknown bugs. It soon became evident that a quick turnaround was not in the cards, so a massive effort to restock the Call Centers with human talent was begun.

As staffing increased, the problems did also. New representatives were put on the frontlines before they were trained properly. While the calls were answered faster, customer satisfaction remained low. Customers sometimes resorted to calling in repeatedly for the same problem, each time getting a different answer. The strategy was to call until they spoke to someone who provided the result they wanted. Call volume was now 40% higher than normal.

Addition of representatives led to issue with call center logistics which simply did not keep up with the growth. Call abandon rates remained high and even increased at certain locations. When investigated, it was found that increased human capacity at one center would cause additional call volume to be routed to them; however without the telecommunications capacity to handle those calls, the calls would be dropped.

Fast forward many months. Staffing level at the call centers remain high, Customer Care representative abilities improved with training, triage tools were developed, and issues with the billing system was substantially fixed. Call Center statistics began to trend to, and eventually meet objectives. Problem is over, right? Not even close.

Customers continue to leave in droves. Instead of adding millions of net customers each quarter, as the competition does, this once prospering company began losing over a million per quarter. The company brand, once a proudly protected asset, is now seen as a symbol of poor customer service. Revenues are in decline, forcing draconian expense and capital budget cuts. Employee morale has dropped to unprecedented levels. Layoffs and rumors of lay offs are continuous. Billions in goodwill have been written off. Many Wall Street analysts wonder if the company can even survive. The CEO and CIO are long gone.

How could this dramatic turn about happen within a matter of months? Never underestimate the power of poor leadership. It can affect change faster that good leadership. So what are the lessons from this real life story?

1) Leaders must create an environment that encourages candid conversations. Subordinates must never feel that delivering bad news might be seen as rebellion or poor teamwork.

2) You can’t trade the Customer experience for Shareholder value. Leadership had prioritized synergy targets over everything else. Basic customer service was compromised in an attempt to please Wall Street and the shareholders. It failed miserably. Customer loyalty suffers. Company shares have been reduced to junk. Stock price is now a small fraction of what it once was, and customers continue to vote with their feet.

3) Projects must never meet arbitrary dates AT ANY COST. To set a tone of inflexibility encourages bad behavior from the top down.

4) A company brand is directly linked to the quality of customer service. Customers will never think positively of a brand that is not backed up with quality service. If leaders recognize this linkage, they might quantify the impact to customer service (or brand) as a cost or benefit of every project. Some abandon business cases would then rise to the top of a list while others might fail before they could do damage.

5) Never take your benefit before it is realized. The leadership in this story did not consider the high cost of believing in synergy. When it was not realized, they had zero chance of recovery.

6) It will require years to develop a reputation for good customer service, but a good reputation can be destroyed in just weeks.

This company is still at risk. Revenues continues to fall and layoffs to reduce expense is now a regular occurrence. While the quality of Retail and Customer Care experiences are improving dramatically, the damage was already done. Customer perception has not caught up with the current reality of good customer support.

In an effort to balance the budget, a large technical organization was recently “gifted” to another company to run at a lower cost. This gift can not be reclaimed. If the experiment fails, however unlikely, the company will no longer have the technical skills in place to operate the state of the art network they deployed. It is a roll of the dice. The result of which may be years in discovering.