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25 May, 2009
17 January, 2008
I think I may have been a bit too subtle with my point in my original post on this topic. The title is meant to be ironic, and the post meant to challenge Indian call centres as to why, with all the experience we have here, we are not widely considered the best in the world at what we do. Cheapest yes, best no.
A couple of readers have been moved to comment on my post, I suspect missing my poorly supported irony, about the failings of Indian outsourcing. There are some common themes I see in posts here and elsewhere that talk about Indian outsourcing. The complaints normally have to do with language, subject knowledge and communication. An example of this comes from Reader “Spence” commenting on my original entry on this topic:
Most of the reps [in India] on the phones are given a week long crash course on how to pronounce words on a page. That does not mean they understand what they are saying and you can’t tell me that you could take a similar course in a language you have only heard in movies and music and be able to communicate as proficiently as in your native tongue.
I think Spence is ill-informed but I can’t blame him for that, there are enough call centres here in India for which this statement is accurate that it is a defensible remark. For the record, the agents working in most international call centres have been speaking and learning English from their first day in school. The major papers here are in English, English is the language of business and of Television news. Actually the movies and music here (alas) tend to be in Hindi or another one of the nine indigenous languages.
A Western company looking to outsource their call centre misses the fact that there is great variation in approach and quality among Indian call centres at its peril. I divide the call centre market here into 3 categories (which I will cover not in numerical order for reasons that are my own :-).
Tier I Call Centres– These are the highly capitalised, highly professional global outsourcing players that Thomas Friedman writes about. Infosys, Wipro, Convergys, Genpact are among the names in this category. These companies have a lot of money and have world-class skills in dealing with Western clients, understanding their problems and developing solution. They throw a lot of their money and recruiting, at training and retention. I don’t think they always get it right, but from what I’ve seen they have a good product.
Tier III Call Centres – This is a big category and it’s to call centres in this category that my friends like Spence (I think) often refer. These call centres have somewhere between a few and a few hundred people working for them. They are cutting their margins as thinly as they can to attract business. These guys are the “Wham bam thank you ma’am” end of the industry. Don’t get me wrong, I suspect mostly they work their buns off for their clients, but because they’re small, poorly capitalised and, yes, because of some unique features of Indian culture, their commitment to quality can exceed their ability to deliver.
Tier II Call Centres – Somewhere in between the global players and the bottom feeders, there is a group of medium to large centres that are delivering high quality service on a (just) slightly better than shoe string budget. These centres have from a few hundred to a few thousand agents and, while they are under-capitalised, they are generating enough cash flow to provide high quality services to companies that, like themselves, are in the middle ground of their own markets but have aspirations. The company I worked for here in India was in this category.
From my own experience in the middle tier, agents get a considerable amount of training (six weeks on many international processes) both on subject matter and accent training. The accent training is not so much to correct their English as to shape it for the target market. I didn’t have that much exposure to raw recruits but the agents who reach the floor are typically experienced agents whose English and verbal communications skills are as good mine. I note with some humility that most of them are also brighter, smarter and harder working than me – oh well, hopefully wisdom comes only with age, it may be all I have left to rely on.
What’s the Problem Then?
So if the people and the training and the experience is so great Steve, why do so many people rubbish Indian centres as having poor quality and what should they (we) do about it? Ah, well, that is a huge question that I do have some insights on that I will get to in the future either here or elsewhere. Here are a couple of things for now:
- Any company thinking of outsourcing to India needs to think about more than just price, it needs to be ready to look at process, at training and measurement. If you want a quality output, find an outsourcing partner that is ready to make some recommendations about processes, not just take yours as a given.
- I think the way you go about choosing an Indian outsourcing partner is very different than the way you would choose, say a business partner based in North America. I suspect a lot of off-shoring arrangements are doomed from the start because of avoidable mismatches stemming from differences in business culture and communications style.
- For customer service processes, training has to go beyond the mechanics of issue resolution and the words that are used with callers. Think empathy training.
To those of you who have mentioned it’s been a while since I wrote anything here, I thank you for noticing. It’s a busy time here, we are getting ready for an international relocation and at the same time trying to get in as much last minute sightseeing as we can. I’ll do my best to keep up regular entries.
7 December, 2007
“If you want to provide your customers with really first class customer service, you have to go to India.” The Germans have developed a second-to-none ability to build cars, the Japanese televisions and, in my opinion if your HiFi isn’t Scottish, it’s crap. Now where in the world do they have more experience, more people, more managers, more executives devoted to providing customer service and technical support than here in India? So it just stands to reason that we are the world’s best, right?
How does that sound? Are you buying it? Seth Godin is on a roll this week about customer service and call centers. In his piece called The discipline of one ring he alludes to the vast difference in customer experience for customers of companies who have committed to answering the phone on the first ring and the experience many of us are more used to (I was in a 2-hour queue with my hosting company this week who tout their support as being “exclusively UK-based”). I will leave it to Seth to examine why this customer experience makes a difference, but I wonder how many Indian Call Centers are ready to promote, sell, staff and manage a one-ring level of customer service. If we don’t understand this concept, aren’t able to articulate the advantages, aren’t willing to sell the reasoning and move our prospects and customers (where appropriate) in this direction, then why not?
3 December, 2007
Seth Godin writes in his blog today about an excruciating experience with PayPal. Reading through it I can’t believe there is anyone who doesn’t feel his pain – we’ve all been there. It also strikes me that while they are not alone, this is definitely an example of the intended customer service model for the PayPal-eBay-Skype group in my experience.
Coincidently, I was using Skype (which I think is a brilliant product) to call my bank back in the UK about my new credit card that’s gone missing in the post. While I was waiting in the queue I read in Seth’s blog:
If you’re on this system and a long-time customer calls in with a complicated problem, one that’s going to require supervisor intervention and follow up, what’s your best plan? Is it to spend an hour with this person over three days, or is the system designed to have you politely get them to just give up?
which I figured was probably an amazing bit of foreshadowing.
Both here in India and in the UK, reps know very well how to simply hang-up when they get one of these hard-to-deal-with problems, never mind being discouraging. Fortunately this is not the norm but it does happen with disturbing frequency. This is the curse of the AHT (Average Handling Time, the mean amount of time a rep spends on his/her calls during the day/week/month). It’s often the main measure for our staff and our centres and everyone in the industry knows that it is inversely related to good customer service. So one wonders how we have come to the conclusion that measuring and encouraging poor customer service is good for business. You can say it’s more complicated than that and perhaps it is, but it isn’t.
Is it any wonder that we have such high turnover of staff when we stress quality, have QA managers, monitor calls for quality but then incent for speed?
Because my new card was lost in the mail, my bank cancelled it leaving us now cardless in the run-up to our Christmas travels. Because of our travel schedule, if we don’t get the card next week, we won’t be able to collect it until sometime in February. The rep handling my call was friendly and understanding and stuck with me and my problem for every bit of 30 minutes trying to solve it. Alas, she was unable to get the dispatch people to send the new cards by courier even after I offered to pay for it myself, But they did offer this, and I’m not making this up, “Tell him to call back tomorrow and ask, maybe we’ll be in a better mood.” And with that, they went home for the day. I wonder what they’re measure on?
25 November, 2007
Worrying about staff retention is not an issue that is exclusive to Indian Call Centers, attracting and holding on to good people is (or at least should be) a concern of all businesses. But with staff turning over once or twice, or on some processes more that that every 12 months, it’s a matter that gets a lot of attention here.
Many years ago when I was working at American Management Systems, I learned something that I attribute to Tom Peters but that he apparently attributes to Peter Drucker, that is to treat your staff as if they are volunteers. Volunteers, that means unpaid people who show up to work for the benefit of you and your organisation out of the very goodness of their hearts. Peters, paraphrasing Drucker explains:
Maybe the boss can force a person to show up for work, especially in trying economic times; but one cannot by definition, force a person to contribute her or his passion and imagination on a regular basis. Contributing passion and imagination is a voluntary act, period — and an all-important one in an epoch when brain rather than brawn has become the cornerstone of success and added value.
Well, I just can’t say that any better than Tom did, but I was reminded of the topic this week during a discussion about why people work. I think there are just three reasons:
- People work for monetary gain
- People work to get a feeling of accomplishment
- People work to get recognition
Each of us has a different multiplier for these three motivations and here’s some news, the multiplier for the first one is not as big as you think it is, even here in India. And my experience is that the best people, the ones you really want in your business leading your teams and managing your processes have even higher multipliers for the latter two than do the general population.
What if, when everyone else’s blog was free, you had to charge money for yours? What would you do? How would you make it worth it?
The general question is, what would you do with your product and your marketing if it was always more expensive than all your competitors? I would like to pose a similar question, what if you knew you were always going to be out-bid monetarily for your staff? How would you change your programs? How would you organise, promote and recognise. What if all your staff were volunteers?
21 November, 2007
A reader commented on my last piece about character asking a number of probing questions. Pretty much any one of the questions could make not just a good blog entry but a good book and in fact many of them have. I thought I would take my own crack at these without resorting to references to other peoples work (although their influence will no doubt be felt).
Define the term “Leader”
A leader is someone whose vision, ideas, character and/or position cause others to emulate, work or act in accordance to the leader’s direction or philosophy.
Define the term “Leadership”
Leadership is the expression of vision, ideas and character that causes others to emulate, work or act in accordance to a person’s direction or philosophy voluntarily and without coercion. By “without coercion” I mean that compensation, position, title, etc. are not a factor. Note that this means that one can be a leader without showing leadership as well as the converse.
Define the term “Character”
I use character to mean the morals, ethics and judgment one shows in making ones decisions and taking actions. Character is observable over long periods of time in ones day-to-day activities and more acutely when one is under pressure or duress or when decisions or actions involve complex interplay between individuals. Character has both a relative and an absolute aspect. In a relative sense, ones character can be described by the kinds of choices s/he makes. Character might also be measured in an absolute sense against some common human or societal ideal. When I speak of character here on this blog, I generally am thinking of this absolute measure.
Are there differences in the character of a good leader and a good follower?
No, I think character is orthogonal to whether one is a leader or follower.
Do you consider Bill Clinton as a good leader?
Now I think you might be testing me for consistency. This is pretty complicated but in general I would say yes. You asked me to consider his well publicised affairs in my answer so I will, and in context. In spite of these lapses of character, Clinton ended his presidency with very high approval ratings. People still wanted to follow not because of partisanship (I believe) as we see now but because they still saw something they liked. Obviously there were those who disagreed, but they were in the minority.
Are there two kind of people in this world namely Leaders and Followers? Aren’t Leaders also the followers in some way?
In a mega-sense, yes I suppose most leaders follow someone. The Dalai Lama follows Buddha doesn’t he? I think you have to put context around it to make leadership relevant. In my BPO company, all of us are potential followers, we’re looking for someone to lead us (I believe this is a very strong, instinctual motivation by the way). Some of us have the ability and desire to lead. Some of us are in “leadership roles”. The job of those of us in leadership roles is to identify and help those with leadership ability emerge. If we do that effectively, the leaders, the followers and the company will all benefit.
16 November, 2007
The new website is coming along and with a little bit of luck I’ll finish it before my last day of work at the end of November. They are supposed to be migrating it from the developer’s test site to our test site today and we’ll start heavy testing on it on Monday. There are still a thousand “finishing touches” that need to be done, one of them is final edits on the Management Bios, the material that goes along with the pictures of our executive team. Today we were struggling with the one for the president of the company. We were “struggling” in the literal sense of the word, especially over a bit in there about his charitable work – how to talk about it.
How to get just the right amount of humility and importance into describing how the boss has funded 100 computers for a school that works with poor kids? This wasn’t easy and I’m still not sure we got it right, but at one point my colleague who is responsible for writing the bio said, “Why don’t we just scrap that whole section”. Normally if you have to work this hard to get a couple of lines right in a piece, that’s the right idea, don’t force it. But it this case I said, “No, this matters”, and we kept working on it. I think the boss’s charitable work matters because it speaks to his character and character matters.
To a large extent, “character” is what most of this blog is about. I’ve written about the importance of honesty, of building trust, of providing value and of acting ethically. These are really all personal character traits that I hope we carry through into the way we interact with our customers, our suppliers, our colleagues and the way we do business in general. If I look closely, there are two reasons that I write about these things, one is internal, the other external.
Why Talk About Character
The “internal” reasons for writing about character probably belong more on my personal blog than here, but let me try to summarise them without getting to “all introspective”. Like many people, I figured out a while back that there must be more to life that getting up and going to work every day, there must be more to life than making money, there must be more to life even than the pursuit of happiness – but what the heck is it? I won’t try to explain that here, but I will tell you that I’ve concluded that character building is a huge part of it. Think about the sheer permanence of character; a flood can wash away your house, a war or depression can take your life savings, your wife can run away with the milkman, but your character will always be with you, and it might survive you as well.
My external reasons for writing on this topic have to do with India. I was working in the Czech Republic in the late 90s when things were booming there. They were breaking out of their Soviet-dominated past and preparing to join the EU, but it was nothing to compare to the energy and inertia that I’ve seen here in India. The growth here looks pretty unstoppable to me, but with this kind of growth what they are going to stumble from is a shortage of leaders. The “system” here does not encourage leaders, quite the contrary, it tends to create followers. That’s not good and it’s something well beyond me how to fix it. One thing I do know is that leadership is built on character and if I can contribute to building leaders in any way here, I will have done something useful.
Why Character Matters to Outsourcing Businesses
Call me a dreamer, but I think this is one of those, “Why is there air?”, kinds of questions. Nonetheless, let me challenge myself to justify my idealism. We’re trying to sell services here to overseas buyers. Now, if I believe what the really smart guys say about selling, then people buy on emotion and justify with facts. If I equate “emotion” with “gut feel” then people are basing their purchasing decisions in large part on what their gut feel is about me and my company and that means they are, at some level, assessing my character.
Leadership is another reason I need to worry about character in my business. I need good leaders and I can’t depend on hiring them, I have to build them. I need role models for that and I need to inculcate my staff with the kind of character traits that encourage leadership.
So, the trouble of getting the wording right for the bosses bio was worth it I think. Now I just hope he doesn’t insist on us removing it.
15 November, 2007
The company I’m with now, as well as most of my previous ones, have kicked around the idea of having a company newsletter that we would send out regularly to keep in touch with customers. Frankly, I’m not a big fan of these kinds of things. The people you really want to be in touch with are normally important, busy people whose biggest problem is managing-down the oceans of data and inputs they receive to something manageable. Unless your monthly newsletter is a McKinsey Quarterly quality industry analysis, it’s going to look like spam. Don’t waste your time.
We’re just passing through the Diwali holiday season here in India which means that Christmas and the end of the year are approaching (for those of us using the Gregorian calendar). If you want an excuse for keeping in touch with customers, it seems to me that this would be a good time for the president or CEO of the company to write a short formal letter to those valued clients.
Now, in my experience there are two kinds of people in the world, people who write, photocopy and send out Family Christmas Letters to all their friends and relatives and people who hate these letters. The people in the latter category tend not to like them because they are impersonal letters masquerading as personal and because they are kind of boring (“Back in April, Suzy broke her arm and Fido got second place in the local dog show”). So, let’s not make the same mistake with ours.
Here is my suggested structure for your end-of-year CEO letter:
- Thank you for your business
- Thank you for contributing to our success [quantify as turnover/expansion/profit]
- Our goals for next year are [in bullet form, these should be ones that resonate with customers and be real, quantifiable things that customers recognise will benefit them]
- We look forward to working with you in 2008, call me if I can be of assistance [CEO’s direct phone number and email]
This letter should force you to think about what you are going to do better/faster/cheaper next year. It should make you write down, at least at a high level, how you are going to improve your relationship with your current customers next year. It should cause you to be creative and use your vision to anticipate your customer’s needs and it should force you to document and commit to some goals.
2 November, 2007
Sweden is a small country, only about 9 million people live there, that’s roughly two thirds the number of people who live here in New Delhi alone. I cannot think of two countries that are more different than Sweden and India. On my first trip to Delhi I offered to share my table at a crowded restaurant with some fellow diners who turned out to be Swedes. I took this as a good omen for my moving here as I have a special place in my heart for Sweden and consider it the most wonderful country I’ve ever had the pleasure in which to live.
In my humble opinion India could learn a lot from the Swedes, driving rules and public welfare come to mind immediately, perhaps they could trade food and festivals in return. One of the things that I know is especially dear to many Swedes is the concept of having a “good name”, your reputation. In a small country, maintaining a good reputation is important because if word gets around that you can’t be trusted, well, you will quite quickly run out of people to do business with.
In India, we are in a big country doing business in a big world. But it’s not as big as you might think. Within any particular industry, it can be quite a small world. During my short time in the Yellow Pages industry, I’ll bet I was not more than two degrees of separation away from 90% of the key decision makers in the industry and after 10 years or so in the European mobile telecoms business, a trip to 3GSM, the major annual industry trade show, was like attending some kind of extended family reunion. And because our best bet as a Call Center or BPO is to sell our services vertically within an industry where we have relevant experience, our selling universe is not so huge. Reputation is going to matter, especially over time.
Reputation management is a long-term, strategic endeavour. It can mean compromising short-term goals in favour of gains that aren’t immediately quantifiable. This is something that Indian BPO’s need to look at carefully and determine a deliberate approach.
21 October, 2007
- The rising value of the Rupee, up some 8.4% at one point this year
- Indian wage inflation running as much as 15%-25%
- Poor infrastructure unable to sustain growth
Well, there is no arguing the facts here, the first two are well known and I can attest that here in Gurgaon we are often running on back-up generators for nearly half the day while the power grid sparks and flames-out somewhere, often spectacularly (I once watched a street-side transformer burst into flames and sparks like a roman candle around the corner from my office while 6 locals worked to change the tire on my car and 20 others stood nearly underneath the thing obliviously).
Now if you are in the Indian Ministry of Finance then you should probably be worried about these things but if you are running an Indian outsourcing company and you’ve been paying any attention to business thought over the last 30 years, you’re not too bothered. Why? Because if you have, you would have known long ago that the game of wage-arbitrage was risky and unsustainable and you would have established a position for your organsation that was insulated from currency fluctuations.
Enter Michael Porter
Michael Porter is one of the preeminent business thinkers and strategy gurus of the late 20th and now early 21st centuries. He has written a number of business books that are at the core of competitive thought for the last 30 years. He would, and I’m sure has, had a lot to say about the competitiveness of Indian business. I will wildly summarise what I think is applicable to Indian outsourcing.
Porter says that there are but 3 strategies to being competitive in your industry, they are:
- Be the lowest cost producer in your market (cost, not price – there’s a difference)
- Develop a special capability or unique Intellectual Property that allows you to command premium prices and is difficult for others to copy
- Find a niche market and dominate it creating a barrier to entry for competition
Product Differentiation Reprise
For a long time in this blog I have argued that we must focus on quality, quality people, quality training, quality methods and quality delivery and that price doesn’t matter. The reasons and rewards for doing this are manifold and I have and will cover them elsewhere, but following the quality trail would firmly place a company in competitive Strategy 2 – as opposed to where many of us are, trying to be in Strategy 1. But Strategy 1 is futile. Why? Because international currency fluctuations are utterly outside your control and by betting on Strategy 1 you are placing the success of your business on luck and on the Central Banks of India and the United States, it’s a sucker’s bet. Moreover, to succeed at Strategy 1 in outsourcing would require a company to have the lowest labour cost, in other words, to pay the lowest wages in the industry. I think the best phrase to describe that tactic is an old one I learned while growing up in Kentucky, that dog don’t hunt.
So, Indian Outsourcing Company, if you have invested in IP, been creative in the development of your products, been innovative in introducing quality and delivery schemes and generally developed your reputation for delivering outstanding products and services, you’re not too worried about all this currency and wage turmoil. OK, your diesel fuel bills are ridiculously high, but your customers will accept some additional costs because they are addicted to your product.