Page 444 - Operations Strategy

case study 10 • Hartford Building society: to measure, or not to measure? 419
unaware of? Furthermore, is the company alienating the younger generation of work-
ers with their ‘slow and steady’ culture? Speaking to several colleagues in the organisa-
tion, Jane found that directors and senior managers seemed to have clarity around the
corporate strategy and objectives, and were proud of the behaviours in their respective
departments. However, lower-level employees were complaining that irregular feedback
sessions and lack of more structured targets and information hinder them seeing how
to advance within the organisation. As one junior colleague from the call centre said
to Jane, ‘I think the management should make more time for us, because they can’t expect us
to consistently achieve these goals unless we’re being encouraged and they’re being monitored.
Otherwise, you don’t know where you’ve fallen behind, do you?’

‘Sales through service’?
Through her investigations Jane uncovered several odd patterns, which further high-
lighted that the Hartford may need to reconsider its performance management system.
In the call centre, for example, profitability and employee satisfaction were seemingly
negatively correlated. When call volume was high and savings account openings, and
mortgage sales therefore were high, motivation and morale within the centre actually
decreased, attendance rates dropped, and higher amounts of attrition occurred. The
Head of the Call Centre explained to Jane. ‘The issue stems from the intangible nature of
the performance management system. During periods of escalated workloads managers have
less time to hold one-on-one meetings with staff. And although we attempt to allocate four
hours of training development to each member of staff each month, throughout busy periods
this time is also often reduced. At these points where there is not as much time for passing
encouragement or informal discussion about progress and areas of weakness, employees start
to feel lost as to what to aim for next.’
Within the branches, this year only 3 per cent of new mortgage sales occurred in-
store, with the remainder coming in through intermediaries and telephone or online
sales. In the previous year here had been 350,000 new member-contacts, but 170,000 of
those occurred via the telephone and another 150,000 were online contacts. Given this,
the extent of the branch operation was considered to be in jeopardy by some manag-
ers. Other banks such as IG direct were increasingly managing to deliver service with
less person-to-person contact, yet within the Hartford there was not much energy being
focused on exploring alternatives to traditional branch services. Instead, the focus was on
improving branch service. From the point the customer walked through the door until
they left, there were specific procedures in place to ensure they received the best possible
service and the most robust information with which to make decisions. When Jane asked
the Director of Branch Network what he intended to do about the diminishing foot traf-
fic numbers he was pessimistic about change. ‘People know what they need to do and will
just keep on ploughing on. Trying to introduce innovations here is like pushing porridge uphill.’

Back to Jane’s dilemma

Jane’s role was to monitor how well the PMS was helping Hartford communicate and
achieve company objectives and goals, and whether the system could support future
changes in strategy. The Society’s conservative, yet safe, business model that had been
in place for years at the Hartford was appropriate during a time of market instability,

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