In the book Uncommon Service, authors Frances Frei and Anne Morriss reveal their very simple and empirically proven approach for winning in business by putting customers at the very core. Commercially.
Their book offers an organisational design model built on “the tough choices that must be made” about four dimensions of any business:
- The service offering – or how customers define “excellence” in your offer;
- The service funding mechanism – or how you will get paid for delivering excellence;
- The employee management system – or how employees are prepared to deliver excellence every day; and
- The customer management system – or how you get customers to behave in ways that improve their own service experience, without disrupting anyone else’s.
Frances Frei is a Harvard professor and presented this theory at The Growth Summit last year, in Melbourne and Sydney. As MC at these events I had the chance to see and hear her not once but twice so I remember her teachings very well. And I absolutely LOVED the concepts of this book that formed the basis of her keynote presentation.
Most of my career has been spent working either directly with customers in the financial services sector, or writing strategies aimed at attracting and retaining customers in the very same organisations (and many others).
Much has been written about customer service but what is different about this book is that it is very commercial in approach. It talks not only about aspirational, breakthrough service; but also how to achieve this in a financially sustainable way.
In my opinion, every single person who is charged with nurturing customer relationships must read this book. At least once.
And in particular, I’d like to suggest that the Board and executive of my professional body, CPA Australia, should read this book and then reflect on whether they are really putting their customers – the membership of our body – at the core. Since a member business is a special kind of customer driven business; unlike commercial enterprises that exist to maximise return to shareholders , a member organisations exist purely and simply to service its members.
I have been a Certified Practising Accountant for almost twenty years and – like many members – I’ve been frustrated, embarrassed and downright concerned at the strategy our professional body has been pursuing in recent years. There’s been plenty about this reported in media like here and here and here and here and here. Suffice to say it is not a customer centric model.
(NB If you can’t view those pages without a subscription, it’s worth buying one! Or try accessing via @mrjoeaston on twitter – he’s been covering a lot of the stories at The Australian Financial Review)
It is alleged that the CEO of our professional body – a body responsible for the governance of all things finance and financial reporting in Australia – was exited from a prior role under a cloud of alleged serious misconduct and conflicts of interest.
When news of this broke I tried to make contact with the President and Chair of CPA Australia, since who else would be appropriate to make comment? The CEO himself? Well that’s a bit awkward isn’t it…
It turns out our President is a very busy man with a very important day job as full-time deputy vice-chancellor at the University of Sydney and very limited time to deal with issues like his customer concerns (notwithstanding he is paid handsomely to spend 3-4 days per week on CPA work).
No wonder the brief conversation that did take place (he didn’t have time to respond to my questions and cut me off midstream) confirmed in my mind that the Board of CPA Australia is in serious misalignment with its member concerns and expectations. And just to recap, members are at the core of this business.
In relation to the CEO’s past work history, our President’s assurances that ‘the facts of this matter have not yet been established’ (which I’m sure is code for ‘we’re planning to spend millions of member dollars on legal fees to pursue defamation charges against the reputable media outlet which reported the allegations’) do nothing to assure me.
Frankly it seems curious that the facts haven’t been established yet, given four weeks have passed since the news broke and presumably the person at the centre of the allegations would have documentary evidence to prove or disprove his position?
Surely the Board would realise – whether or not the accusations are true – that they have a fiduciary duty to members to disclose any knowledge on this issue to members? That silence could only result in reputational damage to the organisation down the track? That – were it true – members would be appalled that their own code of conduct and professional expectations are very different to what is allegedly allowed of our leader.
And, surely someone did reference checks prior to the CEO’s appointment to such an important and high profile role and would be able to refute any such allegations without hesitation should an alternate position be known? But if it’s true that the role wasn’t even advertised externally…. Then what does that say about the likelihood of reference checking??
President Carlin insists that given the allegations about our CEO reported in the media were based on an alleged event that took place 12 years ago they would – if true – bear little relevance to the CEO’s current suitability for the role. Really? I’m sorry but I beg to differ.
When it comes to the gatekeeper of financial governance, and allegations of misconduct, policy breaches and conflicts of interest, it wouldn’t matter if it was 2 years ago, 12 years ago or 20 years ago: it’s just not on. The record keepers must be beyond reproach. Full stop.
While we’re on the issue of members, for whom the organisation exists, it would be remiss of me not to mention the 16-page dress-down memo distributed to members last month (you can read it here). Or should I say, distributed to some members – it’s since been reported that the memo was intended as a tool to enlighten the “friendlies” or silence the members who need to be “managed”? Really? That’s what we members are now, nothing more than rogues that need to dealt with?
Over a month later, I’ve still had no response from CPA’s Chief Operating Officer (Member Services) to my questions about that memo.
I asked our President when we spoke whether this 16-page memo went out to all members, or just the few that are causing interference to the executive team, and if I was on a list of “friendlies” or members to be “managed”. At first he pleaded ignorance, saying he was unsure what memo I was talking about (really?) but before long he remembered that it went ‘to a large number of members’ but ‘possibly not all members’, he wasn’t actually sure. Really? A 16-page memo written with all the legal rigor of a court document and the Board isn’t aware? My BS detector is going off again.
And that brings me to key executive remuneration? Members have been asking for transparency on this and – as the funders of this business – quite rightly deserve to understand exactly how the Board and executive team are dividing the pot of gold that is their remuneration. Over $5.5million shared amongst the twelve directors and three key executives (the latter three, by member calculations, receiving on average more than $1million each per annum). Wow.
Assertions from the COO that this is ‘not excessive’ do not change the fact that it is. It’s more than many listed company CEO’s receive and it’s certainly more than members expect. I’m told by the President that the Board is likely to deliberate on whether transparent disclosure on this matter is warranted ‘in the near future’. Really? You need to deliberate? In 2017 you’d think it wouldn’t take Einstein to figure out that transparency is warranted.
Members deserve service, and that means the opportunity to raise these concerns directly with the Board. You might think that the AGM would be a good opportunity to do this. But if you’re a member of CPA Australia, that option is for all intents and purposes off the table, since the Board has decided for the first time in history to hold the AGM offshore this year. In Singapore. Where we pesky members in the heartland will find it difficult to raise our concerns and where the Board will waste more of our member monies on their private 5-star junket. But of course we’re welcome to submit questions in writing for consideration (I think we can all guess how far that will get us!)
Finally, there is the increasing concern amongst members about the marketing strategy of the business that favours promoting the CEO’s own personal brand above that of the organisation itself. Take a look at the CPA twitter page here…
Or the website banner here…
The television show, the website, the book (or go here if you want a random review of the book that is fairly much on the money). They’re all about our “naked CEO”. Excellent. But aren’t employees supposed to be replaceable? Isn’t this Management 101, that keyperson dependencies should be avoided in any business? Especially if that CEO allegedly comes with baggage…
I was told by our President that the members are overwhelmingly in support of the marketing strategy. Really? Have members actually been asked? And if so was that before or after the allegations of past serious misconduct by the CEO were aired? Brand damage much? Seemed like a good idea at the time???
Here’s the one thing I do know: members of CPA Australia are extremely invested in the brand. Because the CPA brand value is inextricably linked to our own professional brands. Make no mistake, there is a member revolt of the current leadership of the business, driven by our commitment to the organisation, and based firmly on a lack of servicing of the real needs of members.
Members – the customers of this business – are not feeling served and have lost confidence in those leading it. They are congregating on a purpose built site to share their thoughts and sentiments, after CPA Australia shut down communications mechanisms normally available for this purpose.
Accountants by their very nature are trained to look beneath the headlines, to question and challenge, and to hone our BS detectors. We’re using all of those skills and more to form our own opinions and what we’re discovering is that this organisation is more committed to serving the self-interest of its top leadership than the members.
The graveyards of business are littered with organisations that have put their leaders’ egos ahead of their customer expectations. Let’s hope that there’s a happier ending in this story, for the sake of members.
Yours, in exasperation,