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So far 2014 has not been the best of years for power companies. Gales and floods which left thousands without power stretched repair crews to the maximum and resulted in some fairly harsh publicity. Now the companies are in the news again, firstly for perceived weaknesses in their cyber-defences and then for not returning some £400m of ex-customers’ money.
Whilst it has to be admitted that power companies operate in a very specialised marketplace, the trials which they are currently facing can act as lesson points for organisations in other spheres. Looking at the first challenge, a BBC report has suggested that power firms are “being refused insurance cover for cyber-attacks because their defences are perceived as weak.” Quoting one Lloyds underwriter who said that “We would not want insurance to be a substitute for security,” the report suggests that lack of specialised skills, financial pressure, open connectivity and complex networks have all contributed to a perceived increase in risk.
In fact it is this complexity which has grown organically over years which may also lie at the heart of the challenge laid down by Ofgem to take action to return customer monies. These monies relate to customers whose accounts were in credit at the time they cancelled their supply or moved providers and Ofgem estimates that some 3.5 million households and 300,000 business accounts have been affected.
Speaking on the radio an Ofgem spokesperson highlighted the fact that some power companies had been more successful than others in returning funds and that this success, or lack of it, tended to correspond with the way in which the company cared for its customers. The Ofgem code of conduct requires suppliers to treat consumers fairly and Ofgem intends to examine whether the practices of individual suppliers, in this and other matters, have breached the rules.
So what can other organisations learn from these examples. Quite simply, that a company culture which does not put customer outcomes at the heart of all of its activities is a company which is heading for potential trouble. Customer care doesn’t start and end at the front line. Accounts, back office systems, cross-company processes; all can have a profound effect on the service which customers receive. Business continuity and risk management are not just there to identify and cut down on risk and get the company back on its feet quickly; they are also there to ensure the business continues to provide a high level service to customers.
Many businesses which have grown organically over the years now have extremely complex systems and processes. Years of underfunding or lack of direction have resulted in add-ons and work-arounds leading to an inflexible and rigid system which few understand. This results in a very real risk that if a single element fails, it can take down the entire network to the detriment of clients. We’ve seen examples of this recently with the banks and no doubt we will see further examples in other industries during the course of the year.
The solution requires courage and leadership. It means taking a very hard look at every aspect of the business and shaking it up so that customer outcomes replace processes at the heart of every action. It means innovation, empowerment and initiative. It means working to change the culture from ‘what’s in it for me’ to ‘what can I do for our customers’ and it means collaborative working in place of silos.
Threats of fines from industry overseers, negative publicity; these are sticks to beat industry into shape but they will have little effect unless those in charge take the right steps towards a cultural transformation. And in many fields of business, unless those flexible, agile, innovative cultural steps are taken the world will move on and the residual culture won’t matter because the business just won’t be there anymore.