The route to your Optimum Operating Model – and beyond

Ember. Know what better is.

FINDING YOUR NORTH STAR

INTRODUCING THE NORTH STAR:

Ember clients LV= and NFU Mutual are both large financial services providers and they are both currently thriving with a strong reputation for outstanding customer service. But there the similarities end.

LV=’s vision is “to be Britain’s best-loved insurer.” It conducts a vast amount of business online, and has centralised its operations, allowing it to drive down costs and accelerate or automate key tasks. In contrast, NFU Mutual’s promise is “It’s about time.” Across its branch and direct business everything is discussed in person, making extensive use of local knowledge.

These two ostensibly similar organisations are both providing an outstanding customer experience, but in completely different ways. They have each identified their North Star, and then single-mindedly shaped their business to deliver it – taking difficult or even superficially counter-intuitive decisions to create a distinctive, powerful proposition.

Helping you find your North Star

Of course, every organisation claims to have a vision – but in all too many cases, these are general statements that could apply to a whole host of businesses. The North Star goes beyond that: it’s a vivid depiction of the organisation you want be and the experience you want customers to have. And creating and refining that vision takes imagination, honesty and analysis.

It’s here that Ember fits in. Our team of highly experienced customer management specialists can help you build your vision, exploring what the “perfect” customer experience would look and feel like. We’ll help you understand customer expectations, future behaviours, and emerging channels and opportunities.

Our rigorously commercial analysis will identify the changes you will need to make to realise your ambitions and the challenges you will face, and invite you to consider what compromises your organisation is prepared to consider to get there.

Chances are, your business is planning for change – change that will help you do more, do better and do it without risk to the organisation or its customers. If you’re looking to develop a new target operating model, first you need to define the target. Ember’s approach helps you crystallise the goal, and then reshape your organisation to achieve it.

More and more organisations are striving to evolve toward a target operating model – a business structure and way of working that will help them realise their strategy for succeeding in the digital world. Whether their priority is growth or margin, new services or simply a more effective way to deliver existing ones, it’s a logical approach. Defining a target operating model can (and should) drive and inform every decision about deployment, or redeployment, of the organisation’s resources and about investment in new channels or technologies.

But in our experience, there is a critical difference between organisations that fully move to their target model, and those that get lost on the way: vision.

Those that are successful have a rich vision of the way they want to operate and the customer experience they want to provide. They explore what that means for staff – in terms of priorities and culture, as well as roles and responsibilities.

And they are impressively clear-headed about how changing their operating model will affect shareholders, allowing for frank discussions about short-term returns and long-term reward.

WE CALL THIS A “NORTH STAR” – AND LIKE THE GUIDING LIGHT THAT HAS BEEN USED FOR CENTURIES AS A NAVIGATION AND REFERENCE POINT, IT PROVIDES A TARGET AROUND WHICH EVERYTHING ELSE CAN BE CONSIDERED AND CONTEXTUALISED.

When applied, it can lead to very different approaches and operating models, even for organisations operating in the same sector.

WHY ORGANISATIONS NEED ONE, AND HOW TO FIND YOURS

WHERE DOES THE NORTH STAR LEAD YOU?

THE OUTCOME IS A CLEAR NORTH STAR VISION: THE PERFECT FOUNDATION FOR DEVELOPING A TARGET OPERATING MODEL THAT TRULY REFLECTS YOUR TARGETS.

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FINDING YOUR NORTH STAR The route to your Optimum Operating Model – and beyond

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What is the current state of the operations (qualitative and quantitative)?

With your North Star vision defined, Ember’s customer management professionals can help you design a target operating model that is wholly based around that vision – and then support you as you move towards it.

UNDERSTANDING THE CURRENT STATE

Once you’ve determined where you’re going, you need to be clear where you’re starting from – in terms of people, process, technology and above all customer experience. When designing target operating models, Ember applies a structured audit methodology, analysing a range of data to build a financial and operational model of the business. We also look at your current customer journeys, the change capability and readiness, recognising existing strengths and immovable hurdles, your current forward plans and commitments, and your market positioning.

BUILDING THE BLUEPRINT

There are always different ways to reach your goal – and the same is true with operating models. Our role at this stage is to help you explore and evaluate your options and alternative pathways, to create a blueprint: not only for the target model but also the plan for reaching it.

Working closely with you, our consultants will:

• translate your ‘North Star’ vision into a set of core principles for customer experience, services, operations and technology.

• illustrate customer journeys to bring the key elements of the future model to life

• articulate an exciting and pragmatic future operation and organisational design

• develop a clear and costed transformation plan and technology roadmap

• examine your customer contact profile and determine where best to invest in technology to automate contact; in process change to simplify (or eliminate) contact; and in people and skills to enhance the live experience

• present a glide path for the migration of appropriate customer contact to lower cost channels over time

• consider locations, sites and sourcing options to balance costs, value and differentiation for customers

• develop a compelling business case for change, bringing together the external market analysis, trends and projected position of a “do nothing” scenario

• scope the future state budget, and crucially

• utilise the language of the boardroom to gain project sign off and stakeholder support.

FROM TARGET TO OPERATING MODEL

With the roadmap in place and budget secured, it’s time to focus on the detail.

Design starts with defining the customer journeys you want to create. This includes defining the requirements for new digital channels or self-service tools and often engaging with prospective suppliers to understand what options are available.

As customer journeys are re-defined we look at key processes to identify opportunities to improve them. Our approach not only examines how to optimise processes, but also considers customer and organisational issues and how to use data (CRM, transactional and complaints) to understand where processes are breaking down.

The detailed design phase is the point where the North Star vision is translated fully into considerations for location strategy, organisational design structures and future operational skills and capabilities. It is critical that this phase is not rushed: though this typically generates a host of new opportunities for employees, it can also be unsettling. We seek to engage closely with your people, ensuring they understand the direction and involving them in the planning process. Where sourcing options need to change these we will support clients to manage selection processes to find the right partner and

implement agreements that support the vision and drive the right behaviours.

Delivery: a joint action planThough detailed design takes time, it’s vital for staff and shareholders that change becomes visible and tangible at an early stage. That’s why our delivery approach balances short-term wins with the longer term transformation. In fact, delivery often runs in parallel with detailed design, employing a joint action plan and a joint delivery team, so senior leaders in your business are not only engaged but clearly responsible for change.

Communication is critical throughout the delivery process, highlighting not only what has changed but why – and what opportunities that creates. This then needs to be backed by impactful training, explicit knowledge transfer and effective recruitment, ensuring critical roles in the new operating model are filled early.

As well as ensuring the business is aligned, our approach also extends to suppliers. We work with you to put in place rigorous vendor selection processes with a clearly articulated solution that enables strong commercial models that help to create ‘win-win’ relationships.

DETAILED DESIGN DETAILED DESIGN

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What is our desired future state / business goals (eg cost, revenue, structures, etc)?

What are our options (‘pathways’) that could take us there?

Which pathway provides the best approach for us now?

What are the actions (’Opportunities’) we need to take to along that pathway 01

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Ember will assess costs, risks and complexity and recommend a preferred pathway to a transformational and manageable transition.

FINDING YOUR NORTH STAR The route to your Optimum Operating Model – and beyond

In any large organisation, by the time you have restructured and reskilled to reach your target operating model, many of the assumptions it was built on will have changed. Customers, and their expectations, have changed. The target, in effect, has moved: your model must change too. Ember’s approach is to embed agility from the outset – replacing a fixed target with an “optimum” model.

THE ROLE OF THE NORTH STAR

Organisations, market dynamics and consumer behaviours are evolving and competition is unrelenting – from many, and often unexpected, directions. When you’ve transitioned to a new operating model, it can seem hard to justify further change; when you’re mid-transition, it may appear illogical to consider cancelling or delaying planned projects, or bringing forward future initiatives. Adhering to a transition programme simply because it has been agreed is counter-productive. Instead, when the operating environment changes, you need to be able to evolve with it.

It’s here that the North Star vision remains key. In that vision, the business identified its guiding priorities. By revisiting and reviewing those constantly, in the light of new competition, emerging technology or customer feedback, organisations can ensure their focus remains on what matters most.

To be successful today and in the future organisations need to be agile. Indeed our view is that this is a key source of competitive advantage.

MEASURING WHAT MATTERS

Our goal in creating an optimum operating model is to facilitate ongoing change without disrupting the business. It means horizon-scanning and identifying what’s coming, so you can respond from a position of strength. That could be externally: technological innovation or obsolescence, regulatory change or new competition. But often, the most important source of information is internal: your own performance measures that tell you where your current model is not delivering the customer experience you seek.

In our view, the key here is to ensure you capture and analyse the data that is most meaningful for your business and vision. Rather than simply using common metrics, we seek the insights and measures that are most relevant - extracting insight from unstructured data and understanding relationships across data sources.

The result: a clearer picture of where things aren’t meeting your optimum standards, and thus an ability to target change.

EXPECT CHANGE

Ultimately, the issue is about mindset and culture: does your organisation expect change, and is it ready to embrace it? In building an optimum operating model, we seek to instil change readiness. That means looking at skills and capabilities, both in terms of people, technical and developing your workforce accordingly.

Above all, it means recognising from the boardroom to the contact centre and shop floor that there is no end point; no fixed target. Customers evolve; their expectations evolve. The best organisations evolve with them – ensuring their operating model remains optimum, long after the original targets are consigned to history.

OPERATING IN A WORLD OF MOVING TARGETS EMBER’S MODEL FOR OPTIMUM OPERATIONS DESIGN AND DEVELOPMENT

EMBER’S APPROACH IS TO EMBED AGILITY FROM THE OUTSET – REPLACING A FIXED TARGET WITH AN “OPTIMUM” MODEL.

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The roadmap needs to consider all the key components that impact the ability to adapt, evolve and engage, and view the organisation from different perspectives.

FINDING YOUR NORTH STAR The route to your Optimum Operating Model – and beyond

Ember. Know what better is.

Find out how Ember can deliver tangible improvements in your organisation

CALL NOW on 020 7871 9797 or email info@emberservices.com

Ember is a business services group providing customer management consultancy, analytics and recruitment services.

We deliver financially driven customer management strategies and operational delivery solutions that increase commercial value from customer operations. We target opportunities for cost reduction, revenue enhancement and improved customer value from a deep understanding of what drives performance and how to effect change.

Ember Services Ltd 60 Trafalgar Square London WC2N 5DS

T: +44 (0)20 7871 9797 E: info@emberservices.com www.emberservices.com

We have helped organisations in financial services, energy & utilities, government and the media develop and embed optimum operating models that help them realise their customer service vision.