Benefits Outsourcing - A Perspective

I took my last job with the understanding that I was taking on a situation where my key account was losing millions, the service my team was providing this client was in bad shape, my team was turning over left and right and my client was really unhappy to the point of having regular calls with the firm's senior leadership. Unfortunately, in an industry where much of new business sales have come from underbidding, this is too often the case. The good news is that all of these issues are resolvable.

If this situation sounds all too familiar, read on.

Fixing the Service

In delving into my particular situation, I was pleasantly surprised to learn that the actual service my team was providing was better than expected. In fact, we were even meeting all of our contractual performance targets. My team was hand-picked to resolve "the problem" and I couldn't have asked for a better team of hard-working, intelligent and qualified individuals. So why was my client so unhappy and why did they think our service was so poor? There were a few contributing factors here:

(1) Although larger projects were being well managed and deliverables were met timely, "simple" client requests were not logged or were handled through multiple channels, thus team members were promising reports or data without properly scaling the time involved with their other commitments. Thus, the client was not getting these smaller items when promised and there were no follow-up calls acknowledging the delay and demonstrating from the client's perspective a lack of commitment and also a lack of management.

(2) In trying to make the client happy from earlier service shortfalls, no one had truly defined what good service would look like and how anyone would know when it was achieved and how we could demonstrate that the service was sustained. Early attempts to make any sense of this resulted in setting very high and unrealistic expectations with the client that could not be achieved for the price that had been agreed in the service contract.

(3) In talking at length with the client and putting myself in their shoes, the most visible factor in defining poor service was the number of people who complained to their CEO or VPs which created days of work for them as well as us. Although out of thousands of cases we handled only about a dozen or so cases escalated, that meant someone on their team and mine was spending at least half of their time on situations that should have been resolved well before someone felt they needed to contact their CEO.

The first two issues are solved pretty obviously and quickly. We worked with the client and the team to funnel requests through particular resources, logged all requests in a central, easily accessible project log and made the managers accountable for delivering on-time with our commitments. If there was an issue or something was taking longer than originally expected, the client needed be told immediately about the delay and the reason. Open communication was key. In order for the client to see the great service they were getting, we created a color-coded report of the non-tangible performance that meant far more to them than the standard contractual performance that had been agreed to. We then reported those metrics weekly and focused our energies collectively on the areas that were below their expectations. Once we started reporting our progress and improvement and sustainability, the client started to understand the service they were getting as well as our commitment to them.

The third issue required a little more understanding as to what was being escalated to their management and needed a more involved resolution. First, our customer service reps needed more training, our administrative staff needed more commitment to resolving issues quickly and we needed to implement a different service model for our retirement and survivor counseling to provide a "white-glove approach" for those types of cases. Once we implemented our new service model and measured customer satisfaction, not only did the escalations almost cease, but it was a turning point in the entire client relationship.

Fixing the Team Turnover

As I indicated previously, I was blessed to have an awesome team in place for my client, they were not easily replaceable and they were key to setting plans in motion for building a strong client relationship as well as critical for continued service improvements. In a complex and technical service environment, high team turnover will certainly create performance gaps. So why was my team running out the door? The main reason was lack of appreciation. The year before I started my job, bonuses were not paid, future bonuses were uncertain and people were obviously not happy in general. In addition, the client was directing their frustration and hostility toward the people who were working hard to improve their service. Again, easily fixable problems.

The first thing I did was reach out to my client and ask for their help. In pointing out their part in my turnover issue, they immediately relaxed their approach with my team and my managers and agreed to more face-to-face time as well as subtle team building functions like coming in a little early for a meeting so we could have dinner and get to know each other on a different level. I was actually surprised when I learned that many of my managers had not ever met their counterparts face-to-face and that all their interactions had been by phone. It is amazing what face time will do to strengthen a client relationship on multiple levels. I was also extremely fortunate to have a client who understood the value and importance of building a great relationship and who so willingly agreed to make that investment in my team.

As a long-time manager, I never feel I do enough to recognize achievements, but in this case, I really did try to make it one of my priorities if not one of my actual goals. Although the bonus situation was not within my direct control, I took advantage of any way I could to recognize the team. My company had a gift card program were I could hand out gift cards to team members for little awards. I made up certificates to hand out for recognition that the team could post in their cubicles or offices so others would see that they had been recognized for a service improvement or a new idea. I purchased some novelty gifts to hand out and bought some gifts through the company store to distribute. As the service improved and we could streamline and cut some expenses, I was able to turn some of the savings into team bonuses and awarded as many people on the team as I could for their part in making us better. I even updated some of our old PCs and laptops to reduce the frustration of not being able to work efficiently. I looked at each and every team member and made sure they were aligned in the correct job titles which allowed me to increase salaries of my key performers. I threw in a few team pizza parties and a bowling celebration and helped the managers communicate our goals so everyone understood their part in the plan to make us a world-class operation. Although we lost a few team members along the way, overall, our turnover became a non-issue with some much needed attention to team recognition and open communication. And, I did all this while staying within my expense budget.

Fixing the Finances

Over the years I have learned I can not solve all issues on my own. Just like when my clients have a problem, I want them to pick up the phone and ask for my help, if I have a problem that impacts them, I will be open with them. So, when I inherited a financial situation that was losing millions of dollars, I did not feel that I could solve this issue on my own without involving my client in the decisions I needed to make. First, I needed to "prove" to my client that we were losing the kind of money that we were talking about - at a level of detail most of us would normally not feel comfortable discussing with a client. Next we needed to agree that I would aggressively reduce all the expenses that I could through process and technology improvements while not lowering their service. And then, we needed to get realistic about what the spirit of their contract agreed to and what performance was important to them that was well beyond what was contractual. We needed to get pretty creative in how I could increase my revenue by achieving high performance or how I would pay penalties for missing performance. There had to be enough skin in the game that the incentives or penalties actually mattered. Did I mention that my client turned out to be awesome? Well, they are a world-class company and they realized that although we had a contract, they also realized that we couldn't continue to lose millions each year without making decisions that would give them less than world-class service. My service ultimately being a reflection on them, we needed to solve my financial issue jointly. Now I'm not saying that this was an easy discussion or something that happened overnight. But I am saying that if you are losing money on an account, you need to involve your client in shaping the decisions you are going to make as partners. My client was an equal partner in coming to the table with solutions. And sometimes you need to be creative and non-traditional in re-negotiating certain contractual terms so both of you feel good about the outcome. And of course, you need to have a strong relationship and have gained credibility by addressing the other issues I talked about.

Lessons Learned

The lessons here are pretty obvious, but let me summarize:

(1) Communicate, communicate and then communicate some more. Be open with your team and be open with your clients.

(2) Involve your team and your clients in your decisions. No man is an island and certainly more heads are better than one!

(3) With the right team, you can achieve great things. I am still in awe of the things my team accomplished. They made me look good as well as my company. Show you appreciate them any way you can.

(4) Listen. I have found most of my clients are much smarter than me and they are pretty open with what they want and most of the time will tell you how to do it. They are also usually more creative than me and not bogged down by thoughts of industry standards. Don't be afraid to branch out and add performance standards into your contracts that really matter to your clients and better demonstrate how good your service really is, but make sure you can measure them. And certainly give some thought to the amount of your performance incentives or penalties. I have seen numerous contracts over the years that it would cost me more to achieve a performance bonus that I would make in revenue, so then where is the incentive?

(5) Face time with your clients is invaluable. Need I say more?

(6) Clients want a trusted partner, but trust goes both ways. Learn to trust your clients the way you want them to trust you. Always be honest and certainly be open. And, as a good friend of mine always says, bad news doesn't get better with age, so pick up the phone and they will appreciate you more.

(7) Last but not least, have a plan and execute the plan. Come back to it often and make sure you are on track. And it really is great when a plan comes together.

Today, all of the issues I started with are resolved and the client renewed their contract because the relationship is strong and the service they get is world-class. Clients are not easily replaced, so treat them well.

I hope some of the ideas here will help you with your own situation, but please feel free to comment or tell me how you approached a situation differently.