Organizations require well defined and structured operating systems to ensure they deliver to customers (internal and external) in an effective, efficient, and consistent manner. To make this happen, we first need to consider the factors that make up our operating environment. A healthy operating environment balances all of the following:
- Purpose - the real reason you exist
- Strategy - where you are now, where you are going, how you are going to get there
- Culture - stories, ritual/routines, symbols, org structure, control systems, power structure
- People and Interaction - core competencies of staff, communication, and human behaviour
- Metrics and Rewards - how is success measured and rewarded
- Structure and Process - how you do business
While the above primarily focuses on the internal operating environment, we shouldn't forget to apply it to the external environment as well. I wanted to emphasize the importance of integration and flexibility within this system, especially when the end result, for all businesses, is customer attraction and retention. I have a story to exemplify when an organization became protocol crazy and allowed Structure and Process to become disjointed from People and Interaction.
Griffen and Sabine were delighted. They had just signed for their first mortgage ($200,000) with a leading bank. Everything was in place. They could now start to establish a credit rating and settle in to their new life. Griffen then asked about a credit card. They should be able to get one. I mean they had all their accounts at this branch, all direct debits were being paid on time, and they had just signed for $200,000. Griffen and Sabine were not big spenders but they knew a credit card was an excellent tool for pushing up their credit rating (which must have been good – remember they just signed for a $200,000 mortgage).
The Account Manager plugged all the numbers into the computer and they waited. A ping was heard, the results had arrived. We looked at the Account Manager "I am sorry to say that you have been declined for $5000 credit limit". "What" Griffen said stunned "but we just signed for $200,000 mortgage – how can possibly be declined for $5000 on a credit card". Sabine interrupted "We don't need that much, we probably only require $2000 - can you approve that?”
They waited for the Account Manager to use his autonomy to override the decision and approve a credit card for us (on the back of the mortgage approval - remember they just signed for $200,000). "Unfortunately I can't - the mortgage and the credit card approval systems are in two different departments and I don't have the autonomy to make those decisions".
On one hand they were delighted to get them signing for a mortgage, but on the other hand they were happy to decline a credit card application. Is this a consistent approach?
At that moment it struck Griffen. The Structure and Process in one department of the bank was completely out of whack with another department even though they were serving the same customer. The People and Interaction within the bank as a Corporation was not integrated across all functions and the Culture was effectively saying ‘Around here we are not empowered to make decisions because the system makes them for us’.
Think about this situation for a moment – how would you as an organization have handled it? What does your outcome look like? Is every facet of your operating system interlinked to allow this to happen?
Needless to say Griffen and Sabine withdrew their mortgage application, closed their accounts, and moved them to a competitor. They are happy to report that they have a mortgage, a credit card, a line of credit, and several investments.
Ask yourself - what is the value detriment to your company if you lost a customer today because your business operating system was not balanced, integrated and flexible?
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