Truly putting the customer first

BMO transforms into customer experience-driven organization – and decides employee engagement is crucial
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 09/09/2013

Treating employees, customers right: In July, the Strategic Capability Network hosted a discussion on the connection between engagement and customer experience. The panel featured Joseph Doria, CEO of Lincoln Electric Canada, William Pallett, senior vice-president, people resources, Delta Hotels and Resorts, and Kelly Harper, director customer experience learning, BMO Financial Group.

A century of electric performance (Leadership In Action)

Sears needs lesson from Sears

(Organizational Effectiveness)

Setting an example (Strategic Capability)

About one year ago, Kelly Harper was approached by the chief learning officer at BMO Bank of Montreal to spearhead a new learning and development area at the company — customer experience learning.

“People are talking about customer experience as the new frontier,” said Harper, director of customer experience learning. “Great customer experience is understanding: What is your customer experience strategy? What do you deliver? How can you differentiate? Who are your core customers?”

And employee engagement is the foremost element of BMO’s value chain in creating an excellent customer experience, she said.

“We believe engaged employees will deliver great customer experiences, great customer experiences draw loyalty, loyalty is important to us because we know that loyal customers buy more, stay longer, refer family and friends —and that drives growth.”

The starting point is figuring out how to engage those employees so they want to deliver those great experiences — and enabling them to do so. To engage its 47,000 employees, BMO does customer experience journey mapping to actually map out the steps and touchpoints a customer might have within a specific experience.

It starts with employees by asking them, “What is the experience you deliver to the customer and why do you think it’s important to them?” Next, it asks customers “What is the actual experience you’re getting and what is important to you?” Then it brings the two together and identifies gaps, said Harper.

It’s really important that all employees participate in the customer experience journey, not just the customer-facing employees, she said.

“They may not be talking to customers everyday but maybe they create the website that helps the front-line employee deliver that great experience or maybe they create the website that distributes your product — all that’s important,” said Harper. “When you think of the customer experience, it’s everything within the organization, not just the service side.”

The farther away employees are from the customer, the harder it is for them to make the connection to their work. So BMO has employees write down how many steps are between them and the customer to see how close they really are.

The next step is focusing on how the company will be deliberately designing or re-engineering existing experiences. Iterative ideation is a critical component, said Harper.

“Do you have a culture in your organization that says, ‘You know what? Eighty per cent is OK. Let’s go with that and make it better as we go.’ By the time it’s perfect, it’s outdated,” she said. “It’s OK to fail and learn from those failures.”

Measurement is a key principle to developing a customer experience-driven organization. Employers need to take a hard look at whether they are actually measuring what they want to get done, said Harper.

For example, a common call centre metric is average call handle time, but that might not be the best metric to have if the company is striving to create a better customer experience.

“First-call problem resolution might be a better metric because it’s all about solving the needs of the customer in the moment,” said Harper. “So you want to make sure your metrics aren’t counterintuitive to whatever your strategy is… because you might be influencing the wrong behaviour if you don’t have the right metric.”

Culture is another important component in a customer experience-driven company. HR should consider how it is building a culture of customer experience by looking at how it is hiring, onboarding and recognizing employees.

“Are you recruiting potential employees with the right mindset to be customer experience-driven? And how are you rewarding and recognizing behaviour that is customer experience-driven?” said Harper.

Governance is the hardest piece. When there are different business lines, how does one leader tell another to govern his business? she said.

“It’s really going to take the whole organization working together to get it right, so it’s your people, processes, technology, products, distribution, brand image and reputation,” said Harper. “Within HR and the whole organization, there’s a lot to do — that’s why we say customer experience is a journey.”

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SCNetwork’s panel of thought leaders brings decades of experience from the senior ranks of Canada’s business community. Their commentary puts HR management issues into context and looks at the practical implications of proposals and policies.

A century of electric performance (Leadership In Action)

By Trish Maguire

How many companies can you name that can celebrate a 118-year history of innovative solutions, technological superiority and unshakeable commitment to customers, employees and shareholders?

How many companies do you know that can take pride in seven decades of no layoffs, a profit-sharing bonus payout 66 years out of 67 for all employees and an approved business case for the Harvard School of Business?

This is the remarkable track record of Lincoln Electric, a manufacturer of electric arc welders and other welding equipment. In sharing the organization’s history, Canadian CEO Joseph Doria validates how trust, flexibility, fairness and a sense of security can “encourage people to work hard and constantly.”

So if Lincoln Electric has proven an organization can be successful without layoffs, why haven’t more companies followed suit? Could the answer be, as Frank Koller suggests in his book Spark, that there is an indifference and skepticism about this model? Interestingly, the common argument voiced by many leaders he spoke with appears to be that Lincoln Electric’s guaranteed employment and egalitarian compensation model call for a particular set of conditions that are not easy to reproduce — and not suitable — at most organizations.

Do such comments and belief systems suggest the real challenge is about old habits, beliefs and conventional mindsets? Could it be some leaders are reluctant to be values-driven and more imaginative in sharing the results more equally with people, shareholders and the entire business? Are there leaders who prefer short-term thinking rather than understanding the long-term consequences of decisions that impact people, customers, shareholders and the business?

The Lincoln Electric story presents any leader with feasible insights and lessons. Its leadership model reveals a time-honoured commitment to being a group experience where the focus is on actions, behaviours and processes as opposed to the actions of a single leader or position. It is based on essential elements, such as positive relationships, trust and mutual respect.

The deep-rooted culture is one where the people are the unique vantage point, not the product, and acknowledged as being front and centre to the organization — not the lowest element. The culture reinforces the importance of developing an engaging work environment where people are encouraged to make choices based on pride, ownership, passion, conscience and vision.

How would you describe your organization’s culture and leadership behaviour? Are your people recognized as being the centre and front of the organization? Is leadership an intradependent, values-driven process or experienced as independent and singular actions?

How do your key metrics measure up to Lincoln Electric’s successful record of profitability, productivity, innovation and growth?

In Doria’s own words, “people, permanence and profit” encapsulate Lincoln Electric’s outstanding success and serve as a vital lesson for any leader willing to listen.

Trish Maguire is a commentator for SCNetwork on leadership in action and founding principal of Synergyx Solutions in Nobleton, Ont., focused on high-potential leadership development coaching. She has held senior leadership roles in HR and OD in education, manufacturing and entrepreneurial firms. She can be reached at

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Sears needs lesson from Sears (Organizational Effectiveness)

By Barbara Kofman

Any organization looking to move its employee engagement, customer satisfaction and revenues to a higher level would benefit from studying Lincoln Electric, Delta Hotels and the Bank of Montreal.

The application of a value chain, the linkage between employees, customers and financials — as described by William Pallett of Delta and Kelly Harper of the Bank of Montreal — brought to mind the seminal work Sears did in this arena in the 1990s when it introduced its model for a successful transformation.

It started with a clear vision of what it wanted to be known for, communicated that vision widely and linked a winning internal culture with engaged employees to enhance customer loyalty and grow revenue. Sears’ recognition of the “employee-customer-profit chain” became the model for other companies to follow.

As Sears discovered, developing a vision in a top-down manner does not result in sustained engagement. Ensuring the direct involvement of employees in its creation, as Lincoln Electric has done, is critical.

Delta too understood the futility of having senior executives engage in this kind of exercise. Instead, it applied a bottom-up system. The result is a vision, mission and values employees understand and own. It’s an enigma why there are still companies that expect employees to read and embrace their vision and mission on the website but fail to inculcate them into recruitment practices, onboarding and performance standards.

The successful implementation of any organizational change begins with the manager. Starting at the top, the culture leaders imbue directly shapes the experience of employees and, ultimately, customers. It is a maxim that eliminating poor managers or, as Pallett memorably referred to them, “po-pos” — individuals who have been passed over and are pissed off — would solve the majority of an organization’s problems.

At Delta, this understanding of the critical role leadership plays in success is embodied in the first link in its value chain, “Getting the right manager in place,” and having metrics that reflect the actual cost of poor leadership.

In another nod to the innovative work Sears did in the 1990s, BMO is using a learning map with employees to facilitate turning its current focus on customer experience as a key competitive differentiator. While learning maps were not created by Sears, it was the first to use them at town halls to engage employees in helping to build its market share.

Sadly, management schools are now studying a different business case on Sears. In its transition to a 21st century organization, something was lost. These days, one is more likely to read about the company’s failure to perform, the closing of retail outlets and disgruntled former customers.

At every level, it seems Sears has forgotten the lessons of the 1990s and is more interested in padding the pockets of executives than remembering the value chain that once made it so successful.

Barbara Kofman is SCNetwork’s lead commentator on organizational effectiveness and founding principal of CareerTrails in Toronto, a strategic coaching and HR solutions organization focused on enabling individuals and organizations to resolve their work-related challenges. She has held senior roles in resourcing, strategy and outplacement, and taught at the university and college level. She can be reached at (416) 708-2880 or

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Setting an example (Strategic Capability)

By Karen Gorsline

Customer and employee experience are intertwined. Old-fashioned concepts such as loyalty, respect and treating others as you would like to be treated are meaningful at successful companies and influence actions, programs and culture.

Lincoln Electric introduced piecework pay back in 1914. While some see this as a sweatshop practice, it clearly established the linkage between people, performance and profit.

What made Lincoln unique was a genuine understanding and valuing of the employees’ contributions the company because it also established an employee advisory board, with elected representatives from every department, that has met every two weeks since 1914.

By 1915, Lincoln employees had group life insurance. By the 1920s, they earned paid vacations, had a stock ownership plan and formal suggestion program — all leading-edge at the time. In 1934, they had their first annual incentive bonus.

Guaranteed continuous employment was tested in the 1980s as sales dropped in response to inflation, higher energy costs and recession, but not one employee was laid off for lack of work.

In 1993, employees voluntarily postponed 614 weeks of vacation in order to meet customer demand for product.

The Lincoln Electric culture — where employees are valued and hold themselves accountable for success — is difficult to replicate.

Delta Hotels, Four Seasons and Ritz-Carlton all recognize that their most valuable resource is one they do not own — employees.

Delta has found that pay alone does not retain employees. Quality employees stay at the company because they know what is expected of them, they have the tools to do the job, they have the opportunity to do their best, see an impact, feel cared about as a person and have a good relationship with their manager.

Isadore Sharpe of Four Seasons Hotels sees employees as standard-bearers of their service who must be treated with the same care and thoughtfulness as guests.

Ritz-Carlton is famous for its motto “We are ladies and gentlemen serving ladies and gentlemen.” While employees receive training, the emphasis is on attitude, understanding personally how good it is to receive great service and having the tools to do their job.

Employees expect respect and respond by being accountable and demonstrating respect as a norm, regardless of their role at the organization.

Companies often mistake “assets” — such as customer market share and HR — as something they own and that can be managed accordingly. They believe employees and customers can be educated to buy into company direction or conform to desired behaviour.

But customers are earned one at a time and grown based on positive experiences with employees who treat customers as they are treated themselves. Both customers and employees can opt to disengage at any time, which often results not only in the immediate loss but in damage to the company’s reputation.

Karen Gorsline is SCNetwork’s lead commentator on strategic capability and leads HR Initiatives, a consulting practice focused on facilitation and tailored HR initiatives. Toronto-based, she has taught HR planning, held senior roles in strategy and policy, managed a large decentralized HR function and directed a small business. She can be reached at

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