Jeff Judy

Jeff's Thoughts - March 30 , 2011

What Do Your Customers See When Employees Change?

I have recently written about the possibility of increasing employee turnover at many institutions ("Now You See Them, Now You Don't."), and about the need to expand our notions of "succession planning" ("Succession Planning Revisited"). I argued that many banks may soon encounter significant needs for replacement employees, at all levels of the organization. And I suggested that we get beyond thinking of "succession planning" as "replacing #1 in the organization" to look at the talent pool and constellation of abilities to be found among the leadership team.

All this is well and good, from an internal perspective. As an employee of your bank, a change of, say, CEO or Senior Lender has quite an impact on your work.

But how much do your customers care about those changes? Aren't your customers going to be more focused on the confusion and inconvenience that arises when all of those front-line employees they have dealt with for years either retire or move to other employers?

You have probably been through this yourself, on a personal level. You have relied on an eye doctor or dry cleaner or carpenter or mechanic for years and years, and when they stop working, you are surprised at how much of your time and effort it takes to locate a suitable replacement. In the end, you find yourself working with an entirely different company or clinic.

We cannot prevent employee turnover, especially as the economy improves. But we can develop strategies for reducing the negative impact of that turnover on our customers. We can put some explicit thought and effort into creating a hand-off process, for each role, that makes life as simple, and the transition as smooth, as is possible for the customer.

We want to improve customers' transition experiences to the point where they do not automatically look to another bank to meet their needs. We all know that it costs much more to replace a customer than it does to keep one.

Think of this as succession planning for roles, rather than for people. While succession at the CEO or other top level positions is a matter of one person replacing another, and of finding and nurturing the right replacement, at the front lines it is unrealistic to apply the same methods for identifying and cultivating talent. Executive positions are well-suited to patient development of candidates from internal staff, but front-line employees are often replaced by new people coming in from outside the bank.

Leave your customer to be managed by a team of the person who is leaving the bank and someone who has just arrived, and the customer's perspective is sure to be lost. That's not really the employees' fault, that's just reality.

Without a clearly defined process, and explicitly stated values and standards, your customers' loyalty is at risk. And that process has to come from management, from an understanding of the bank's business strategies and the institution's culture.

Beware: platitudes will not do the trick. Simply setting the goal of "providing the smoothest possible transition for the customer" will have little impact. Both the departing and the incoming employee have too many things on their respective minds to meet this goal on their own.

Your hand-off process, for every role that impacts customers, has to explicitly explain the "how," the actual steps that will occur when the person fulfilling any given role is changing. And if you do not monitor the success of the process, and hold supervisors accountable for delivering those smooth hand-offs, you're only paying lip service to the ideal of putting the customer first.

Do you want your customer to do business with your bank, or with their banker? With your institution, or with their favorite teller?

A clear hand-off process, wherever the customer and the bank meet, belongs in a broad perspective on succession, just as it belongs among your business strategies for maintaining your competitive advantage in your market.