The first thing business mantra that we are supposed to learn and believe is that “Customer is the king”. Unfortunately in real life customers are those set of beleaguered individuals who are forced to wait infinitely for their service and make do with inferior products. In most cases there are no ways for customers to formally complain, no individual manager would lose a KRA point because of customer mistreatment or no CEO would ever have a customer service as a metric in business dashboard.
Take the case of HDFC Home Loans. It is very easy to get a new loan as the sales personnel would probably visit your office or residence at your convenience. For a query on an existing loan you would have to wait for around an hour at the firm’s office. The firm’s message seems to be that new customers are important and existing customers are not. Same is the case with all mobile service providers. Most of these places also do not have a formal complain mechanism where a customer gets a tracking number and thus be able to trace the resolution.
It is clearly the CEOs who are to blame for this. So, Mr. Deepak Parekh is the culprit for the case of HDFC bank. Sales is a metric that I am sure he would be measuring. Am assuming that sitting in the head office Mr. Parekh would routinely examine the achievement of weekly or monthly targets of disbursements. Thus it becomes imperative for his managers to achieve the numbers. Like the entire household gets interested in humouring the tantrums of an cranky child, the entire HDFC structure would probably be fixated on achieving Mr. Parekh’s obsession with sales numbers.
Now think, the waiting time for customers at the HDFC Home Loan branches is not at all measured. Nor is the satisfaction of customers with the resolution process. Essentially these are toys that Mr. Parekh would most probably not be interested in playing with. Hence the entire rank and file of HDFC Home Loans deems it unnecessary to work on and improve these parameters. Faster and better service at branches would definitely be possible. But, no manager would ever get a carrot or a stick for performance on service to existing customers. There is thus a completely lack of action and existing customers are forced to meekly accept shoddy service.
Point one of the blog is that customer centric behaviour is to a get extent dependent on the metrics that the Chief Executive uses to control and manage the organisation.
Why should Mr. Parekh even think of improving service to existing customers? For all my criticism, HDFC is probably a lot better than its competitors and among the more humane financial businesses. Every delay is a mark of inefficiency in the organisation. Every customer who comes into the branch with a query is a pointer to a flaw in the process. All these weakness create costs in terms of excess manpower requirements, reprocessing, lost documents, etc. These activities are shrouded within routine work and their horrendously damaging impact is rarely uncovered.
Fast process dictate that the firm be devoid of all wastes. They force efficient performance. A 20 year old wooden bodied truck can easily be driven on the highway where there are no minimum speed parameters. That one truck can easily delay the movement of many other vehicles. Now image that the highway has a minimum speed limit of 60 kmph. Suddenly all vehicles on the highway would be forced to be efficient. The fuel efficiency would go up and all other operating costs reduce. For those who feel that high speed could cause more accidents, well, India with among the lowest average highway speeds has among the highest accident rates.
Point two, business heads should invest him time in monitoring these operational metrics as it will create an overall much leaner and better organisation.
A simple way to achieve excellence on any parameter would be to continuously measure them. Branch level operational metrics need to be given importance at the corporate level. HDFC could start with measuring the average turnaround time for customers. They could also have a simple metric of how satisfied the customers were with the interaction. A best Branch Manager award could be instituted on the basis of performance on these parameters. At a back end level a simple Pareto chart on the nature of complaints and queries could generate a good understanding on where the improvements are to be directed.
One of the easiest ways to control crime rate is to not register complains or make the task of registering complains difficult. Mr. Parekh needs to avoid such behaviour to keep a tab on the operational issues before they blow out of control. (Even now, I am pretty certain that HDFC Home Loan has high costs of managing Branches and the firm is pretty unhappy with their ability to get data from Branches). There has to be an easy way for customers to communicate with top management. Not only must the complaining be easier, a better way would be to motivate customers to give feedback.
The last point, CEOs could well include the Branch level operational metrics in the corporate dashboard and allow customers to reach out to them.
A disclaimer here: I repeat that HDFC is probably among the better of all private financial institutions in the country. I am using the name of HDFC and Mr. Parekh as this idea of this blog came from a poor interaction with their branch.