Providing the ‘right help’ to customers: Implementing Financial Services Reform in Australia

Abstract

A challenge in implementing new processes for frontline staff is skilling them to handle every situation that customers might present. This situation is more difficult when there can be penalties for inappropriate interactions as with the Financial Services Reform (FSR) requirements in Australia. This paper describes how the FSR changes were implemented for frontline staff in Insurance Australia Group (IAG) using the ‘right help’ program. A framework for developing and implementing the change plan is presented. This case study highlights the importance of considering history, context and process linking to clear performance outcomes when designing appropriate change interventions and the importance of using activities to engage people in the change, to explain the new behaviours and to institutionalise the change.

Key Words: Change; framework; implementation; regulation; staff; customer.

Introduction

Insurance Australia Group (IAG) is Australia’s largest general insurer. Along with other financial services companies operating in general insurance, IAG was required to implement new processes to comply with the Financial Service Reform Act (FSR) in Australia. There was a two year transition period with FSR coming into effect on 11 March 2004. The major impact of these changes was on frontline staff who had to learn new ways of interacting with customers. Three months before the go live date chosen by IAG of July 28, 2003, the FSR project team was concerned that staff did not feel confident about operating in the new FSR environment. For this reason a change project focussing on this issue was initiated. This paper describes how change needs were identified, a plan to address these needs developed and implemented, and the change program assessed.

Australian Financial Services Reform

The Corporations Act (FSR) is legislation introduced to provide a consistent framework of consumer protection across the financial services industry. The life and investment sectors had been under similar regulation for a number of years and now with FSR, the general insurance sector was being brought into a similarly regulated environment. Specifically FSR was aimed to help consumers understand and compare different financial products through increased disclosure of information and provide them with access to efficient complaints handling procedures. The impact for companies was that they had to apply for Australian Financial Services Licences. Products, processes, documents and complaints handling procedures had to be changed to comply with the licence conditions.

I would like to thank all the people in IAG who supported and participated in the ‘right help’ program. Change is always a team effort and the success of the ‘right help’ program is due to the commitment of the teams across IAG to doing the’ right thing’ for the customer, staff and the company.

Under this legislation, companies had to choose an advice model and ensure staff are trained in this model. The models varied according to the type of advice offered. For over 1,800 staff operating under the NRMA brand in call centres, branches and country service centres, IAG chose to use the Information not Advice model. Under this model, staff must limit comments to customers to factual information and not provide opinions or advice. This model was chosen after a customer needs analysis that showed this to be the preferred model for NRMA customers.

Identifying the Challenges

The author was tasked with investigating concerns about the confidence of staff in operating in the FSR environment and developing a change plan to address any issues found. The first step was to analyse the situation and establish if operating under FSR was of concern to frontline staff. Discussion with frontline staff, team leaders and managers soon confirmed this concern. Clearly more training was needed.

However before jumping to this obvious solution an assessment of the whole situation was undertaken to identify other factors that may be impacting the staff and that may point to different solutions (eg. Moss Kanter, Stein & Jick, 1992; Pettigrew, 2000; Pettigrew, Woodman & Cameron, 2001). This fuller analysis of the situation involved a review of the FSR activities completed to date, further visits to people on location to understand their work challenges, focus group discussions and discussions with stakeholders to understand their drivers and deliverables. The major issues found were grouped into five categories: resistance to the change, the impact of history, low confidence about skills, a time poor work context and a change weary workforce.

Resistance to change is typical in change programs whether the change is perceived as positive or negative (Mento, Jones & Dirndorfer, 2002). In this situation, resistance was higher because staff perceived the change to be counterintuitive. Coming from the history of the NRMA mutual ‘help’ mindset, staff voiced concerns about how to continue to give ‘help’ and give good customer service without providing advice, as they had done in the past. Also under FSR people needed to let their manager know if they or others had made a mistake and therefore may be in breach of the legislation. This was considered counterintuitive from a national culture perspective. In Australia, people have not traditionally dobbed in themselves or a mate. This resistance was heightened by the imposed nature of the change. Mandatory change can often elicit cynical and negative responses with people viewing compliance as a nuisance and giving only lip service to the activities and, as a consequence, doing the minimum required. There was an element of this thinking present, especially when the actual contribution to the customer and the bottom line was not clear. Something had to be done about reframing this change into a more positive light with a tangible and valued contribution.

Confidence was another issue, the one raised by the FSR project team. Staff had undergone training but reported not feeling confident operating under FSR. This training included information about the penalties that could apply if strict processes were not followed, which made staff concerned about performance standards. It also became apparent through discussions that there were many ‘grey’ areas in the way FSR processes could play out in real customer interactions. Put another way, staff could be scripted but customers could not. An added complexity was that IAG was not yet operating in a live environment so had no real time experience to draw on. Without this experience the spectre of failure loomed larger. Steps needed to be taken to up-skill people in these ‘greyer’ situations and boost their confidence.

The work environment also presented some practical challenges. Frontline staff could not be away from the phone or counter for any length of time because their role is serving the customer. Frontline staff also carry a continuous and heavy training load to remain up to date with products, computer systems and services. Clearly FSR would need to compete for airtime, therefore any training intervention needed to be designed to fit in with time poor, pressured staff. Adding to this, staff had experienced almost non-stop change for a number of years. They were change weary. Any change interventions would need to be designed to fit in with time poor staff and presented as ‘business as usual’ quickly so as not to add to the change burden.

In summary, FSR was a culturally counterintuitive change that had created a heightened level of resistance to the change. Staff were time poor, change weary and did not feel confident about being able to follow the new processes to the required performance level even though they had completed initial training. Despite all this the staff voiced a desire to learn what to do so they could provide the correct customer service, showing the strength of the NRMA ‘help’ culture.

The Change Plan Framework

The change approach used follows on from the seminal work by Lewin (1951) about understanding the push and pull factors in change and the need to unfreeze, move then refreeze situations. The change approach used was also informed by writings by Pettigrew (2002) and Pettigrew et al (2001) who advocate the inclusion of time, history, process and links to outcomes in managing organisational change and Stace & Dunphy (1994) who advocate approaching change from a situational perspective. Other influences included engaging people in change together with sequencing of activities and allowing for emotional transitions (eg. Bridges, 1980; Moss Kanter et al, 1992; Kotter & Cohan, 2002). This approach to developing a change plan is shown in Figure 1.

Figure 1

Pull levers are about creating an environment to encourage people to engage with the change (eg. Kotter and Cohan, 2002; Mento et al, 2002) and reduce resistance to the change (Hackman, 1999). Leaders and managers also needed to be engaged to support their staff in making these changes (eg Garvin, 2000; Goleman, Boyatzis & McKee, 2002)

Clarity levers involve activities such as communication and training designed to explain clearly to people how they need to change their behaviour (eg. Kotter & Cohan, 2002). These communication and learning activities would need to be chunked, staged and repeated over time to ensure that the messages were received and skill levels increased (eg. Larkin & Larkin, 1994a, 1998b). Staging activities and communications over time also allows for people to undergo the emotional transitions associated with change; letting go, taking time out then reengaging in the new way (Bridges, 1980; Kubler-Ross, 1969).

Push levers draw a clear line in the sand about acceptable and unacceptable behaviours and serve to institutionalise the change and make it sustainable through methods such as policies and practices. (eg. Moss Kanter et al, 1992; Kotter, 1996). Too often in change programs there is an overemphasis on the push change levers leading to short lived change with people reverting to the old ways as soon as they can because they have not positively engaged.

Effective change implementation is achieved through the appropriate balance of activities across the change levers together with the selection and sequencing of appropriate activities within each of these categories. The approach has been used successfully by the author to design and implement change across a number of different industries. A major benefit of using this model is that conceptualising change in this way enables communication of complex change implementation in a comprehensive manner that can be easily explained to others presented on one page. The ability to communicate the plan is essential when you need to engage people with the change, both change recipients and stakeholders who control the resources.

Developing the Change Plan

Using this change plan framework, activities were selected to address the change issues identified. The first challenge was to create ways to engage people in the change. The analysis of the FSR change situation pointed strongly to the need for reframing the FSR experience and challenge so people perceived positive benefits, especially for customers. There would be a need to use multiple frames of reference to be relevant to all people (eg. Bolman & Deal, 2003). Understanding the mutual history of NRMA provided an ideal vehicle with the strong ‘help’ brand and culture for this reframing. If ‘help’ could be reframed to incorporate the behaviours required for FSR this would provide an ideal vehicle for the change program. The idea of ‘right help’ was developed for consideration.

A theme alone would however not be sufficient to engage people and reduce resistance. People needed to see the benefits in implementing the change, the WIIFMs or, what’s in it for me or the customer or the organisation. Identification and communication of benefits would allow people to connect in a way that is important to them (Bolman & Deal, 2003), to the change program and contribute to creating a critical mass of people engaged with the change (Hackman, 1999).

However, again this would not be sufficient unless the leaders and managers also acted in a manner consistent with engaging with the change. Therefore it was imperative that they role-modelled these behaviours (Senge, 1990; Senge, Kleiner, Roberts, Roth & Smith, 1999). This is consistent with the research by Kotter & Cohan (2002) indicating that people want to see and feel then engage with the change rather than be told to change. Therefore behaviours supportive of ‘right help’ and the frontline staff needed to be identified and then leaders and managers trained in using them. In addition there needed to be communication about successes – the quick wins – to increase buy-in to the change.

The next challenge was to identify and link the appropriate behaviours with the proposed ‘right help’ theme to give people clarity about how they should behave. A theme can be very useful when dealing with complex behaviours because behaviours can be associated with the theme and the theme used to remind people about what they should be doing rather than explaining the behaviours all the time. Handling the ‘greyer’ areas of FSR definitely involved complex behaviours and a theme would support people in the change program.

Training programs were needed to communicate about the required behaviours and build the confidence of the frontline staff. It was important that training occur close to the need to use the skills (Kemp, 1977; Donaldson & Scannell, 1986). If training occurs too soon, people will forget and skills transfer will be reduced. With this in mind the proposed programs would be designed to be delivered both just pre and then post go live and themed ‘right help’. Post go live refresher programs would also be delivered over a number of months to reinforce the changed behaviours. These sessions needed to be delivered in chunks to suit time poor staff (Larkin & Larkin,1998b) and to allow for reflection and internalisation (Senge et al, 1999).

The third challenge was to institutionalise the changes to ensure that staff understood what behaviours were expected and what were inappropriate and also to stop staff slipping back into the old ways. With high levels of resistance and being time poor, there would be an attraction to use the old methods because they were known and comfortable (eg. Hackman, 1999; Kotter & Cohan, 2002). Therefore it was important to draw a clear line in the sand about appropriate and inappropriate behaviours.

The activities identified to achieve this were to incorporate FSR requirements into customer service standards and monitoring programs for frontline staff. Information about appropriate behaviour could be placed on the intranet site called Compliance Corner. Human Resource policies and practices were identified as a second way of reinforcing the change through inclusion of FSR requirement in position descriptions and performance discussions. Rewards systems could be geared to reward people for compliance with behaviours operating both as a lead and lag influencer (Lawler, 2000). New staff could receive training starting with FSR components in orientation.

These activities were formulated into a comprehensive change plan using the pull, push and clarity categories for approval by the IAG FSR Steering Committee (see Figure 2). Action plans were developed incorporating these activities ensuring there was appropriate sequencing and implemented using project disciplines.

Figure 2

Implementing the Change Plan

The IAG FSR Steering Committee approved the change plan. The IAG Branding and the Legal Departments approved ‘right help’ for use as an internal brand and to be used to reposition FSR. The heads of branches, call centres and country service centres were engaged in a stakeholder group to advise and champion the activities for the frontline.

The next task was to identify the behaviour to link to the theme. These were behaviours that frontline staff and leaders and managers needed to display. Focus groups across the organisation were used to establish the behaviours required together with input from work developed for previous FSR training programs. Simple statements were formulated to capture the behaviours. For frontline staff providing the ‘right help’ meant following the FSR processes both in customer interactions and in putting your hand up if you made a mistake. For leaders and managers ‘right help’ meant role modelling encouraging behaviours and welcoming reports of mistakes. Links to other processes to institutionalise the change were created including the compliance monitoring, customer service standards and human resource processes.

A WIIFM process was undertaken to identify the benefits of FSR for staff, customer and the organisation. Both focus group discussions and snowball email discussions were used to generate these benefits. Benefits identified for staff included role clarity and investment in people through training and development. For the customer the benefits included engendering trust knowing this is a professional organisation that complies with the law and knowing information provided is accurate. Organisation benefits included enhancing IAG’s image in the community as a trusted proceed of insurance services and being compliant with FSR providing a competitive advantage. These benefits were used liberally in communication and training, all under the ‘right help’ banner.

A large part of the change program was spent developing and rolling out the training under the ‘right help’ program. Using the training principles identified (Kemp, 1970; Donaldson & Scannell, 1986), the ‘right help’ program was designed to be delivered close to the time the staff would use the skills, in manageable chunks to maximise update and meet the needs of time poor staff. This allowed time for reflection and internalisation of the change (Senge et al, 1999) based on feedback from their own experiences and from their team leaders. In order to maximise the impact, the training was proposed to be delivered face to face by the direct manager (Larkin & Larkin, 1994, 1998).

The first part was a pre go live trial environment so that people could practice behaviours in a safe environment and build their skills. This involved frontline staff using FSR ‘right help’ behaviours and processes for two weeks as if they were in the live environment. Team leaders and managers were asked to catch people doing something right using the new Information not Advice model. Their names were put in the draw for prizes at the go live date. The trial started with a launch to explain the purpose and how to win a prize. During the two week trial support was provided by people being present on site who frontline staff could approach with issues they were unclear about, together with an email and telephone hotline. People who made mistakes were coached during this trial period. Extra training and briefings were provided for team leaders so they could be the coaches to their teams and role model the ‘right help’ behaviours.

The second part was post go live refresher training. There were four refresher programs designed to be run by the team leaders at monthly intervals during regular communication programs. Full facilitation guides were provided for the team leaders to use. The design involved short sessions so that people were not away from the phones or the counters for extended periods of time. These four sessions were:

1. The ‘right help’ Video

This video used real life situations to explain how to handle the ‘greyer’ areas of information not advice. Staff actors were used so participants could connect with real people who did “um and ahh” but did provide the ‘right help’. The video featured people starting to use the wrong behaviour who were stopped, the right behaviour explained and then the whole vignette replayed using the right behaviours.

2. Handling Difficult Questions

In the first session staff were issued with cards to record real life situations with customers that they wanted clarified. These questions were used in the second session in discussions lead by the team leaders. A question hot line and email box were set up so advice could be provided promptly if team leaders were unsure of the answers.

3. The ‘right help’ Audio Tapes

Tapes of customer interactions were retaped for training purposes with examples of inappropriate interactions and questions about what to do instead. For each situation a tape of the full conversation showing the right way to handle the customer interaction was provided. Again staff actors were used to add realism to the situations.

4. The ‘right help’ Role Plays

These activities were based in feedback about aspects of FSR where staff wanted more clarity. They were short interactions that could be discussed at the regular team meetings. Again the wrong and the right ways to handle the situations were provided in the facilitation guides for team leaders.

Items branded ‘right help’ including pens, post it notes, photo and note holders were given to all staff to be reminders about the ‘right help’ behaviours. When the refresher programs for frontline staff started the ‘right help’ behaviours for leaders and managers were rolled out using a cascade process where a manager presents to their own team who then presents to their team. This approach was chosen because people typically pay more attention to the direct manager than any other source of information. Throughout the implementation progress and success stories were communicated through a number of channels including team briefing, company newsletters and intranet updates.

Activities to institutionalise the change included inclusion of ‘right help’ behaviours into the role descriptions and customer service standards for frontline staff. Staff were rewarded for achieving high levels of customer service standards. The ‘right help’ material was also included in orientation for all new starters and placed on the intranet. Frontline staff were also monitored through observation of team leaders, taping and review of calls, and assessment of incidents and success of remediation.

Measuring the Success of the ‘right help’ program

Success of the ‘right help’ program was measured by written assessments of frontline staff and their team leaders and feedback from refresher training. A number of metrics were also used including number and type of incidents or mistakes reported online through compliance mailbox, success of remediation activities for people who make mistakes and audits of processes and customer interactions.

Initial feedback indicated that the ‘right help’ program had met the need. As one team leader participating in the refresher training commented; “Staff appreciated the fact that real life examples were used in the video. These grey areas were of great concern however the video clarified these”. The leader and manager behaviour briefings were also welcomed. One senior manger provided the feedback that; “Managers have commented on how useful the material has been in implementing FSR. We’ll continue to train our people so that they had the support to adopt these new behaviours into their everyday activities”.

The metrics also support this positive view. FSR mistakes in customer interactions after an initial and expected spike reduced to a minimal level. Remediation involving coaching and revisiting refresher training for those making mistakes has proven effective. Audits have shown the ‘right help’ processes are working. FSR requirements have been built into customer service standards for staff and been institutionalised into the culture as part of the way IAG does things. Audits and continuous feedback will continue to ensure that this initial success is sustained.

Conclusion

This case study shows that by taking history, context and process into account combined with clear links to performance outcomes, a more comprehensive change plan can be developed. Instead of simply providing more FSR training, the ‘right help’ program was developed to engage, clarify and institutionalise the required change in behaviour into the culture. This approach ensured that frontline staff were confident to handle the ‘greyer’ areas of customer interactions. This paper provides a contribution to both theory and practice by providing support for the consideration of a broad set of issues when designing change and by providing a framework for designing and implementing change plans. This framework can be used to design change programs and to audit change programs to ensure there is appropriate balance of activities staged over the right timeframe to support effective change.

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