Text messaging and social media have become an increasingly common part of customer service. Here are two contrasting examples:
New parents can sign up to any number of information services from the NHS, the third sector or private companies. One common service is a text that coincides with the infant getting older, initially weekly and then monthly. The texts can be very reassuring telling parents what they are likely to expect at any precise age: for example, reassuring the parent of a 16 month old that it is perfectly normal for a toddler to veer between being completely charming and utterly inexplicably furious.
At the recent Fairbanking awards held at the RSA many of the accounts that were highly rated, including the first ever to receive five stars, had systems for texting people warning people of the danger of going overdrawn and encouraging them to save. The best accounts seem to increase substantially the propensity of customers to save for ‘rainy day’ items like holidays, houses or weddings.
The significance of the second example lies in the possibility that it offers a way out of the free banking problem. As Adair Turner argued last year, the problem with banks offering free current accounts to customers in credit is that it is not the basis for a viable retail business model. For this reason, the banks have to find other ways of making money which they have consistently done by misleading offers, dodgy fees and dodgier products. For years bank leaders have admitted off the record it is almost impossible to find a virtuous way of making money out of customers as long as free banking (which is unusual in other countries) persists. When asked why they don’t simply start charging, the banks freely admit that they don’t trust their rivals not to swoop down and opportunistically steal their customers.
But if, through texting and other means, banks offer an effective and personalised information and support service we may find a way out of this deeply damaging dead end. Income on accounts in credit can be made in two ways – either through a differential on the interest rate earned by the bank and paid to the customer or through a service charge. To win a Fairbanking seal of approval accounts like the RBS/NatWest Instant Saver with Savings Goals have to show both that they offer interest rates broadly in line with the market average and that they don’t use the old trick of offering bonus rates at the beginning which quickly taper off once the customer has been hooked.
More broadly, there is little doubt digital and social media based customer service will grow and grow, but a game changer could come if we start to select and judge these services by their behavioural efficacy. So, for example, an important part of deciding which gym to join might be the digital customer engagement service it provides; by combining behavioural psychology with personal data and algorithmic learning these services might soon start (if they haven’t already) to provide more than just useful information; they will promise – like the Nat West bank account – to help you personally meet your goals.
As customers we can then judge the service by that same criterion: Did the nudging from the gym make me go more often? There may, of course, be other criteria we apply. ‘Go to the gym NOW you lazy git’ may work as a message but I might also find it offensive. However, the technology should quickly be able to work out what kind of messages you respond to well – especially when it gets easier to trawl data and combine information from different products to develop a fuller picture of our motivational character. It is already the case that platforms like Google and Amazon seem to know our tastes better than we do.
Hopes for this new world of relational services should be tempered by some reservations. Raised expectations must work both ways. If I am regularly getting personalised text messages it would be unforgivable for the service provider to then worsen the deal I am getting without alerting me. As the exploitation of information imbalances and customer inertia have been an integral part of the business plan of banks and energy companies for decades, this is a major challenge and one I suspect most these companies don’t yet fully appreciate.
Also, perhaps the behavioural impact will be less than we hope. What works is not necessarily what sells. The impact on saving levels of the NatWest account described above has impressed behavioural economists but it may be a one off or may not last. After all, globally billions of pounds are spent on diets that don’t work and self-help books that only make us more miserable. One reason diets fail (apart from the dubious motives of those who promote them) is that we are living in an obesogenic society. Individual nudging can be useful but it needs to be part of a strategy that includes wider public education and engagement, shifts in social norms and sometimes state regulation.
While relational services in the public and private sectors hold the prospect of helping us live bigger, better lives we should never forget that major and sustained behavioural shifts are inherently social phenomena.
As I found out when I gave my annual lecture employee engagement is not a headline-grabbing issue. But the more I think about it the more convinced I am that it deserves attention……
This morning I spoke at the launch of a Resolution Foundation report on long term low pay. As we have come to expect from Resolution the report is robust, well-argued and measured in its tone. In essence it shows that a high proportion of people on low pay ten years ago have either been low paid throughout the decade or have ‘cycled’ in and out before ending up back more or less back where they started. But the report also recognises a more hopeful finding which is that levels of ‘escaping from low pay’ have risen in the last ten years while the numbers stuck long term have declined.
I found myself on a panel responding to the report with Sir Charlie Mayfield, Chair of John Lewis, and Frances O’Grady, Secretary General of the TUC. In my response I recognised the problem of low pay and the need to take obvious steps like restoring some of the lost real value of the minimum wage and encouraging more employers to pay the Living Wage. But I also argued that we need to understand more about the nature of low pay, what might be an acceptable level of low pay (given that it is a relative measure there will always be low paid people) and what reasons there might be for people freely choosing and staying for some time in low paid jobs.
Given it was the subject of my recent annual lecture, I also managed to make sure that the issue of employee engagement became a significant part of our conversation. I argued, and Charlie agreed, that good employee engagement can not only improve staff relations and boost productivity but is also likely to exert pressure for fairer distribution of pay and profits within the firm. Increasing employee engagement could therefore be an important part of a strategy to address low pay and poor career progression.
In my annual lecture I suggested that significant progress on employee engagement may be in reach. If we could combine the basic framework of collective rights encouraged in the 2004 Information and Consultation Regulations with best practice found in individual employee engagement (schemes like Best Companies and Investors in People) we could develop a ’Good Employer’ threshold and kite-mark which could, through peer pressure, consumer choice and public procurement, drive a step change in employment practice; something which would almost certainly benefit firms, workers and wider society.
Given that the tools are to hand, the barrier to this initiative may be largely cultural. On the one hand, advocates of employee engagement dislike talk of collective rights, while on the other side the advocates of collective worker representation (generally, supporters of trade unionism) tend to be somewhat dismissive of the voluntaristic and individualistic nature of employee engagement. But if both sides of the approach work together the mutual concerns can in part be allayed. If surveys of individual employees show high levels of satisfaction then worker representatives have fewer grounds for being adversarial, while the danger that employee engagement is tokenistic is reduced if there are also more robust channels for employee voice.
So, this morning I took the opportunity of asking Frances O’Grady if she supported my idea and one part of it in particular: ‘As long as companies properly implement the 2004 regulations’ I asked’ would you accept that it is reasonable for information and consultation to be provided through a non-trade union route, for example through an in-house staff association?’. The point being that if a campaign to improve engagement is seen as way of forcing trade union recognition on unwilling employers and unenthusiastic staff, it is unlikely to gain wider public support.
Frances’s reply was heartening. She saw pragmatic reasons for trade unions to support better engagement and voice at work regardless of whether they are involved in delivering them. To paraphrase her argument: where there are proper processes for information, consultation and voice this generally leads either to trade unions finding it easier to organise or to individual trade unionists taking on the mantle of staff representative. Frances’s position implies a willingness to support a voluntary Good Employment framework (albeit that she would prefer stronger legal collective rights) even if it doesn’t require trade unions to be part of its delivery.
The measures most often advocated to tackle low pay are regulatory and economistic; raising the minimum wage and spreading the living wage. As I say, I support this, but the liberal in me wants to address the problem in a way that maximises the degree of human discretion and minimises the necessity for state regulation.
I strongly suspect that firms with robust employee engagement also have fairer wage structures. However, it may be that in some firms some of the time the existence of low paid jobs is seen by employees as legitimate. This may reflect the nature of those jobs or the financial position of the company. If employees are asked whether remuneration is fair (an aspect for example of the Best Companies staff survey) and if employees have the opportunity to express collective concerns, then we may recognise that low pay is not always something to be opposed.
For some reason robust employee engagement is a less exciting and mobilising goal than the living wage but it may be a more effective and more nuanced way of tackling low pay and also one with many other benefits.
From factory floor to local authority to Northern Line, social change is like cooking – it’s all in the mix
Last night I gave my RSA Annual Lecture. The focus was improving work and particularly employee engagement. Given the widespread support for such engagement and the benefits it could have, not just for companies and workers but for wider society, ‘the conundrum’ I suggested ‘is this: why have our aspirations for work not turned into social norms and expectations?’
As is my wont, I argued for an approach which combined hierarchical, solidaristic and individualistic power. Managers need to accept that genuine employee engagement is about representation and voice not just individual employee satisfaction. Champions of workers should accept that most workers see no inherent conflict of interest between managers and employees. And we as individuals must become more ambitious and less instrumental about the meaning of work in our lives.
In case this all sounds like empty exhortation, the speech also contained several practical proposals, some of which the RSA itself is taking forward.
In questions, David MacLeod from Engage for Success , which part sponsored the event, asked where the responsibility for starting to close the gap between the rhetoric and reality around employee engagement should be placed – on managers, trade unions or individual workers? In reply I said change needs to pursued in each area broadly together. Any process led simply by managers will become too focussed on the interests of organisations; if workers’ representatives calls the shots what emerges would be radical but possibly also unworkable; and, while we all need to take some responsibility for making our jobs meaningful, it is too much to expect any of us to do this alone.
I gave a similar answer last week to a group of local government officers who labour under the daunting title of ‘Head of Transformation’. One asked; ‘if we are weak on solidaristic commitment and individual initiative in relation to change, but are strong on leadership, shouldn’t it be the last of these that drives change?’.
The answer is ‘only up to an early point in the process. ’ Solidaristic and individualist perspectives and aspirations are inherent to us as human being and thus they lie somewhere in the organisation even if tacit or supressed. Hierarchical overreach (leaders relying on top down tools) – even if motivated by the very best reasons – will tend to turn these forces oppositional. So, even if your leaders are brilliant they need patiently to seek to summon up (and engage with) solidaristic and individualistic energy if they are to maximise the chances of transformational change.
A classic example of getting this wrong occurred yesterday.
As someone who has regularly stood on a claustrophobic, overcrowded Clapham South station failing to get on to train after packed train, I can entirely see the sense of encouraging commuters to walk or cycle to stations further up the line in order to avoid the stations which daily become totally overcrowded. But to offer this advice on its own without giving any ground to self-interest or a sense of fairness is predictably counter–productive.
Much more likely to succeed would have been a campaign which called on all those who can influence travel patterns to help solve the problem of overcrowding, which will persist until a signalling upgrade next year. A solidaristic message would, for example, have appealed to employers (and customers, who include tube users) to offer staff greater flexibility to work earlier or later hours. The campaign would also have provided simple incentives – such as new early bird tariff – to commuters who chose to get trains before the rush hour.
As it is, an appeal which is perfectly sensible in its own terms (and which could benefit individuals and the wider commuter group) comes across as an unfair and unreasonable demand from an unloved hierarchy (TfL); one which, as the quotes from Londoners in the article shows, manages to stir up both solidaristic (‘it’s not fair to us’) and individualist (‘it’s doesn’t work for me’) indignation.
The point is this: the ingredients of social change like the ingredients of a recipe need to be appropriately mixed. If they are not a flavour which could be an integral part of a delicious dish can instead destroy it. This is one reason why patience is an important managerial virtue. It is also why behaviour change works better when it is designed and delivered closer to people and can be more incremental, adaptive and nuanced.
To start a fashion you have to be willing to look ridiculous. So here goes. I think Mark Carney (yes, the man who has single-handedly saved the UK economy just by taking up his job) made a rather superficial speech a couple of weeks ago.
I can’t pretend even to understand every word of the offending oration. In parts it is quite a technical account of the things that are happening and need to happen in order to provide a firm foundation for the UK to continue to be a global centre for financial services.
Indeed, in his speech the Governor of the Bank of England goes further than the search for stability. He told a Financial Times event to mark the paper’s 125th anniversary:
Suppose, for example, that UK-owned banks’ share of global banking activity remains the same and that financial deepening in foreign economies increases in line with historical norms. By 2050, UK banks’ assets could exceed nine times GDP, and that is to say nothing of the potentially rapid growth of foreign banking and shadow banking based in London.
For Carney the benefits of such a growth are obvious:
… if organised properly, a vibrant financial sector brings substantial benefits. Today financial services account for a tenth of UK GDP and are the source of over 1 million jobs.
Two thirds of those are outside London…. Being at the heart of the global financial system also broadens the investment opportunities for the institutions that look after British savings, and reinforces the ability of UK manufacturing and creative industries to compete globally. Not to mention that financial services represent one of the UK’s largest exports.
More broadly, London’s markets serve a vital global role. London acts as Europe’s window to global capital; is a centre of emerging market finance; and can play an important role in the financial opening of China.
Carney thus rejects both the prioritisation and implicit trade-off contained in Peter Mandelson’s assertion post credit crunch that we need ‘less financial engineering and more real engineering’. The Bank of England Governor believes that a dynamic and growing financial services sector is perfectly compatible with one which behaves responsibly.
These two brilliant articles by John Lanchester offer an alternative view of things
Lanchester’s pieces were written in the summer but still there is a steady flow of new scandals. Indeed, as he argues, the big question – given the terrible impact on so many people of the banks’ behaviour - is how the public has become insouciant in the face of ever more evidence of venality and incompetence at the very heart of finance capitalism. In a sane world the recent rate swap scandal would be a cause celebre but so inured have we become that it has only bubbled under as a story. Every week it seems there are now allegations about rogue traders such as last week’s about currency speculation.
On a more systemic level much of the activity that makes the world of financial capitalism go round and which makes millionaires of its most accomplished practitioners is of questionable value. According to a recent World Development Movement report speculation on food prices by the world’s largest investment bank increased global food prices over the last decade while generating more than £2 billion in rent seeking profits for the banks.
There are two questions to which I would need to hear satisfactory layman’s answers before I could feel the faintest enthusiasm for Mark Carney’s vision of a UK economy even more reliant on global financial capitalism.
First, what is the evidence that all this activity – particularly that in the so called ‘shadow banking’ sector – actually contributes to improving the lives of the world’s citizens, particularly its most disadvantaged? This is partly an ethical question but also one about national interest; to be dependent on a category of activity of minimal substantive value must be risky.
Second, is it really – as Carney asserts – possible to have a dynamic, speculative, financial capitalist sector that also behaves responsibly and consumes its own risks?
Arguably, the high flyers of finance capitalism are as obsessed with making money as sex addicts are with having sex. We wouldn’t expect a sex addict to be very good at fidelity or treating other people (particularly the objects of their desire) respectfully. So why would we expect financial speculators ever to be much good at behaving responsibly or in anyone’s interest than their own? The reason regulation in this sector has such a poor record is that those who run it have an obsessive drive to circumvent anything which gets in the way of money making.
In offering us a future of powerful, but also responsible and effectively regulated, finance capitalism dominating the UK economy isn’t Mr Carney ignoring history and putting hope above expectation?
So many of us are in the wrong jobs; maybe including me…
Yesterday morning I met with an RSA Fellow who has been working as a job advisor for Job Centre Plus. He told me how he has grown to hate the harshness of the regime of which he has been a part. JCP is a public service but rather than offering the most effective help to the unemployed (which would be expensive), the idea of service seems to be increasingly about responding to public antipathy to claimants and Whitehall pressure to save money.
The regime is explicitly designed to catch out claimants either for working on the side or for not trying hard enough to get employment. There is a deeply held public assumption that the welfare benefit regime is soft on claimants, but in 2011 over half a million sanctions were handed out and that figure appears to be rising (we will know more on November 6th when the next data set is published by DWP). Other recent changes include calling claimants in for appointments at very short notice and sanctioning them if they fail to turn up on the grounds that they should be ready at all times to take work.
Perhaps the most striking feature of the growth of sanctioning is not the sheer numbers but the idea of so many rank and file public servants and employees of Work Programme providers being incentivised to punish their fellow citizens by docking their already meagre benefit entitlement. For those who entered the employment service with a vocation to help the disadvantaged to now find themselves called upon increasingly to be the administrators of punishment must surely be brutalising.
Yet, of course, there is another side to the argument: One which can be read every day in the mainstream media and heard a hundred times a day on radio phone-ins. How much sympathy would those who miss appointments, fail to take up job opportunities or object to unpaid work placements get from the millions of low paid workers slogging their guts out in menial jobs from which they take home just a few pounds a week more than being on benefits?
It is not just night shift security guards, office cleaners or chicken pluckers whose day to day existence might make them intolerant of those on benefits. As this powerful piece from the LSE’s David Graeber argues, millions more people are in ‘nonsense jobs’ which seem to lack any intrinsic value to either themselves or wider society Perhaps it is not surprising that fewer than one in three employees say they feel actively engaged in their workplace.
Also, I have previously argued, a big question hangs over one of the fastest growing sectors of employment – care. The commodification of care has liberated many people, most of them women, but it has also led to a situation in which millions of moderately well paid people pay millions of generally badly paid people to provide care to their loved ones as strangers. Yet, generally speaking care is more warmly received and more thoughtfully and effectively provided in the context of familial affection (see Stephen T Asma in the RSA Summer Journal).
So, quite a mess: millions unemployed or under-employed, more and more of whom are treated like semi-criminals; millions in menial low paid insecure jobs; millions more in better paid but pointless activities; yet millions of others providing at best adequate care to strangers while the rest of us wish we had more time off work to spend with our loved ones. Suddenly, the New Economics Foundation’s campaign for a twenty one hour week seems more than pie in the sky.
Russell Brand found himself accused of celestial baking by Jeremy Paxman in an interview that has provoked widespread fascination. Brand’s vivid critique of the world as it is and advocacy of revolution is seen – just as he and his commissioners at the New Statesman foresaw – as a breath of fresh air contrasting with the stale rankness of Westminster pinhead adversarialism.
An important and astute critical strand in Brand’s NS essay focusses on the self-righteous, self-referential nature of much left of centre politics. He is on to something here, but arguably in his refusal to engage with conventional politics Brand also exemplifies another failing of radicalism; the tendency to split off radical social critique and idealism from practical politics and policy making.
There are many reasons for the divide between revolutionary idealism and incremental practicality. But one is aesthetic. As former New York mayor Mario Cuomo said ‘You campaign in poetry. You govern in prose’ (surely Barak Obama has this quote somewhere in the Oval Office).
Which brings me on to my annual lecture: the focus is work and I want to open with some Brandian fire (although sadly I lack both his looks and capacity for iconoclastic eloquence), but I also want to make a practical suggestion for progress in modern employment practice. It is, I suspect, a proposal radicals will find puny and managerialists will find unnecessary. To have a hope of impact my modest idea needs all the support it can get, but even if it were brilliant and even if it might have the potential to make a significant difference, the sad truth is that policy proposals are never as compelling as the poetry of denunciation and utopianism.
Way back when, I got into politics and social policy because I wanted to change the world. Notwithstanding my profound lack of talent perhaps I should have chosen showbiz instead?