Customer-centric culture: A bedrock of sustainable insurance business

  In the second part of the series in Daily FT on creating a customer centric-culture, Stephen Rosling, Director of TCF Consulting and Chandri Gunawardhana, CEO/Principal Consultant of Global Business Counselling look at the impact of corporate culture on customer outcomes

The impact of culture on customer outcomes

Conventional wisdom is that it was the cultural weaknesses that existed in the market that caused and proliferated the global financial crisis. The point being that rules and guidance alone are not enough to safeguard the public from organisations that do not see the importance of customers’ well-being, or from unscrupulous individuals who seek short term personal gain at the expense of both the organisation and the end customer.

Rules provide guidance and are written on the basis that they will benefit society as a whole, but are predicated on society accepting them ‘culturally’ as the basic social standard. But culture is not a mechanical system – it is a human one. It is not the case that people can simply follow a set of cultural rules. Culture is based on values, beliefs and attitudes. These are things that we develop over our lifetimes and are founded in our own individual cultural heritage.

While we all have a basic understanding of what is right and what is wrong, the culture of a firm is something that stems from the behaviours of its leaders. Their attitudes pervade through a business in every way. If they are sloppy in their approach to governance or take tactical measures to gain a competitive advantage overlooking corporate values, then others within the organisation will start to believe that it’s acceptable to be this way.

As such, culture plays an important role in determining fair customer outcomes. However, a positive and customer-centric culture does more than just help to determine positive customer outcomes. 

It creates an altogether more positive working environment. After all, firms that proactively seek out better product solutions for customers are likely to have happier customers, who in turn remain loyal longer and refer friends, and finally impact positively on the company’s bottom line.

Tell-tale signs of a non-customer focused culture

To identify a culture which is not truly focused on the customer, one just needs to look at how a firm operates.

10 tell-tale signs are easy to spot:

1. The core values of the organisation do not reflect the fair treatment of customers nor is due recognition given to customer rights in its vision, mission or strategic imperatives.

2. A leadership strategy which does not put customers at the centre of business planning.

3. The absence or ineffective design and implementation of conduct risk policies and standards.

4. Significant gaps in compliance with conduct risk standards and TCF policies.

5. Disciplinary action is not regularly imposed against contravention of TCF policies.

6. Little or no TCF Management Information.

7.Customer processes which are not “joined up”.

8. Complaints where the underlying root cause is not fully identified and addressed

9. Recruitment and selection processes which do not take into account ethical behaviour and integrity.

10. Lack of remuneration and reward strategies for those who display exemplary practice of TCF policies.

In part 3 tomorrow, we’ll look at some of the fundamental aspects of putting the customer first.

(The complete article was previously published in the Asia Insurance Review Commemorative Edition for the 2016 EAIC Conference).