Why Banks Should Stop Managing Call Centers Like Machines

In dealing with the fallout of the financial crisis, banks have struggled to overcome an erosion of customer loyalty and trust. Improving transparency in fees, attractive rates and enhanced digital capabilities are certainly part of the solution. In addition, many organizations have placed a renewed focus on getting the customer experience right.

While there have been rapid gains in digital and self-service capabilities (e.g. web, mobile, etc.), the call center remains an important channel that should not be overlooked. A pivot towards the call center will pay dividends for many organizations. However, the typical approach to call center management will continue to alienate and frustrate customers.

Companies have a love-hate relationship with customers. Customers are great when they are ready to buy, but they are a nuisance when they ask for help. Sales generate revenue; service generates headaches. Call centers have been referred to cynically as "cost centers," reflecting the attitude that customer service is a drain on resources. The goal has typically been to provide the smallest amount of service required to ensure customer retention. With this end in mind, call centers have been managed with a healthy dose of Taylorism.

Frederick Taylor, often referred to as the father of scientific management, was a 19^th century "efficiency guru" who pioneered time and motion studies. Through observation of pig iron workers, he found that efficiency could be gained through strict management of tasks, carrot/stick incentives and standardization of processes.

Sound familiar?

Although later discovered to have falsified many of his "ground-breaking" studies, Taylor's impact still plagues organizations today. Motivating people is a matter of simple Boolean operations. If one gives out more carrots, one will receive more work. If one uses less stick, one will receive less work. Few places in the corporate world have stubbornly held onto the legacy of Taylorism as tightly as the call center.

One of the most commonly used metaphorsby call center professionals is the call center as a machine.The fallacy of Taylorism gives credibility to this harmful metaphor. The key performance indicators of the typical call center are steeped in the language of time and motion studies. As the volume and duration of calls (average handling time) defines the work for the center, and customer service has largely been viewed as a cost, the goal is to minimize both the number (call avoidance) and duration of calls.

The problem with this Taylorist utopia is that a machine is a poor approximation for a call center. The inputs (calls) are highly volatile, as the arrival pattern of calls varies greatly in a given interval (e.g. half-hour, day, week, etc.) A machine with an inconsistent power supply becomes ineffective. The factors of production (human agents) are non-uniform: some are inclined towards gaming the system and respond differently to incentives. Imagine pulling the lever of a machine only to have the machine go forward sometimes, backward other times or simply quit working altogether. The outputs (customers) contain just as many issues. The "call center-as-a-machine" model is flawed to say the least.

Recognizing this challenge, most organizations have tried to address the issue by simply trying to force the call center to operate more like a machine. Square peg, meet round hole.

Massive efforts are devoted to predicting call arrival patterns in order to approximate a smooth flow of inputs. Human diversity is dealt with through call scripting and other schemes to kill agent autonomy. Well-intentioned executives "improve efficiency" by simply cutting the AHT target for calls. As anyone familiar with call centers will attest, agents can be very creative in hitting targets. They will dump calls, transfer complex cases, cut back on referencing job aids and generally frustrate customers. The paper gains in efficiency will be more than offset by the hit to customer experience.

Bringing back trust to banking starts with winning the battle for customer experience. The myth of simple carrot/stick motivation and the intellectual fraud of Taylor have plagued organizations long enough. Allowing greater agent autonomy in serving customers benefits employees, companies and customers alike.

Rather than obsessing over experience-distorting metrics and rigid control schemes, call center executives should focus on hiring and empowering the right agents to provide the best client experience – full stop.

Zappos.com, is a great example of a firm that has moved firmly beyond the grip of Taylorism. After receiving some basic training and shadowing of live calls, agents are simply instructed to provide the best possible client experience. Whether achieving that objective involves a long call, a short call, a call back or communication over email is at the discretion of the agent. Zappos.com enjoys an excellent reputation for client experience and customer loyalty.

Scrapping the "call-center-as-a-machine" model and the "customer-as-widget" mentality will allow organizations to make real progress in the battle for customer experience.

Norbie Schickel is managing director of The Gryphon Groupe, a financial services consultancy.