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.
