John Stanhope is currently Chairman of Australia Post and Chancellor of Deakin University in Australia. He is also Chairman of the Bionics Institute, the Port of Melbourne and the Melbourne International Jazz Festival. John is also a Director of AGL Energy. Prior to these appointments he was Chief Financial Officer of Telstra Corporation, Australia’s largest telecommunications corporation.
Dr. Linden Brown interviews John Stanhope, in this, the second in a series of interviews on Customer Culture (see 1).
John, as a person with a technical financial background, how did you develop a focus on customers and recognize the importance of customer culture to business success?
Well for me it started at an early age when I delivered the payroll to employees at the Line Depots around Melbourne for the Postmaster-General’s Department (PMG) – an Australian government department that controlled all postal and telecommunications services. I realized that they were my customers and if I delivered the payroll on time without any errors they would be happy and this transferred on to how they treated their own customers when installing or maintaining telephones. Later I worked with leaders who were role models on customer service and learned from them. Much later when I was part of the senior leadership team at Telstra as we went through a customer focus transformation I realized the vital importance of a strong customer culture and its impact on profit and growth.
What did you do to develop that culture within the Finance Group at Telstra?
My Finance Group had about 2500 people performing a wide range of different functions from payroll to tax to treasury. I realized that for them to create value and be seen to be valuable they needed a common purpose – value and service for their customer! I coined the words “Value Service Culture” as a reflection of what we needed to achieve and as the name for a group wide initiative to build a strong customer culture. It involved leadership workshops and customer-interaction skills workshops as well as town halls and “summit forums”. These were the vehicle for cross-functional collaboration through customer stories being shared, best practices spread across the departments and co-ordinated initiatives involving groups that served the same customers.
It required committed leadership from me and my senior leaders as passionate role models to develop this “customer” mindset. We measured our customer culture and also systematically assessed the value we were delivering to our internal customers.
How long did it take to have an impact?
Interestingly we did an analysis of the benefits for the business after the first 12 months and found that we had a profit impact of more than $15 million per annum in recurring savings and revenue improvements. But the real value of embedding the customer culture across the whole group took about 3 years. So we got both short term and longer-term benefits.
What has been the change in your experience at Australia Post?
During my time at Australia Post I have seen big changes in customer behavior. Our mail business has been in decline and our parcel business in rapid growth as a result of online purchasing by consumers.
Today the focus must be on ‘customer innovation’. Many companies focus on innovation, but it is customer innovation that counts. At Australia Post our customers want their parcels anywhere, anytime, so we ask: How can we provide a great delivery process that gets better and better over time and do it profitably? Innovation must occur to meet our customer’s need and expectation of ‘anywhere, anytime’.
All leaders must have a mindset that is externally and future focused. This includes foresight and peripheral vision with future customer needs and changes in customer behaviour as central. This is what drives customer innovation.
To develop this mindset leaders must have a relentless pursuit that everything is about the customer. John says: “There are little signs that tell you. At the start of a meeting ask – Is this about our customers? If not, don’t have the meeting. Another key sign is ‘language’. How do you frame a problem or an issue? Is it framed in terms of the customer or not?”
What else is required for people to be ‘customer leaders’?
First, every person that interacts with customers must be a customer leader. To do this they must be empowered to do it for their customers. This means that they must know that they will be supported and encouraged by their senior managers in the decisions they take to satisfy customers. Processes must be simplified to enable them to provide a timely, seamless customer service. They need to have the skills and confidence to deliver a great customer experience. In other words they have permission to do what it takes to deliver a great customer experience.
I remember as CFO at Telstra that we seemed to have some bottlenecks in some departments in delivering value for our internal customers. To find out why we used a measurement tool to gain feedback on our behaviors. One of the outcomes was that people felt they were not empowered or didn’t feel they had permission – yet we had explicitly tried to create a situation to enable people to make their own decisions for the benefit of customers. When we dug deeper we found that they did not have the skills or confidence, so we assigned an experienced “buddy” to work alongside them to provide skills and confidence.
What is your goal in the organizations you are associated with to achieve customer innovation and empowerment as a culture change?
Whether it is a company like Australia Post, a business like AGL Energy or a University like Deakin, I think culture change is simply a behavioral change. Simply said, not easy to do. The change in behavior must come from within each and every one in the organization. The behavior that always tests “Am I meeting the customer’s need and being valuable”. This testing must just become a natural behavior. When this is the case we are truly there.
A central theme of John Stanhope’s experience with customer centric leadership is the leader’s ability to foster customer innovation and empowerment as central to a customer-centric culture.
Empowerment is the extent to which employees are able to have permission to make decisions that are best for the customer without the explicit approval of senior leaders. It enables staff to freely propose new ideas to benefit the customer, influence others and control the way in which their work is performed. This discipline is vital to the successful delivery of value for customers and the provision of superior customer experiences.
Without empowerment within an organization, decisions to benefit customers are slow, employees are less engaged and duplication and inefficiencies are prevalent.
In our research we have found that strength in empowerment, translated to permission, as a customer culture discipline generates customer satisfaction and advocacy, fosters innovation and contributes to new product and new service success.
- The Customer Culture Imperative: Is Marketing Destined to Lead a Better World?
- Customer Culture: An Interview with Peter Cooke, President, Wright Medical International
Dr. Linden Brown and his team at MarketCulture in Silicon Valley conducts research on the concept of customer-obsession with the world’s top organizations – Amazon, Google, Apple, Starbucks and many others. He is a renowned Professor who has taught at universities around the world including INSEAD (France), Cranfield (England) and the University of NSW (Australian Graduate School of Management). He has also conducted leadership and skills development programs at many of the world’s great corporations.