Vodafone has taken plenty of flak over the last few years. The once mighty market leader is widely seen to have lost its way after being pushed into second place by O2 and then into third place this year thanks to the Orange/T-Mobile merger.
The company has suffered from declining revenues, falling customer numbers and the perception, accurate or not, that it is too corporate and poor at handling customer relations.
Six UK CEOs in 10 years hasn’t exactly provided stable leadership, while the decision to pull out of Carphone Warehouse proved to be a serious mistake. Missing the exclusive on the iPhone did not help Vodafone’s fortunes either.
The man trying to fix all this is Guy Laurence, who took over as CEO of Vodafone UK in January 2009. Laurence isn’t bothered about being third in the market, quality not quantity is his watchword, but he concedes that, ‘by and large that perception of the company is accurate’.
Laurence faces a daunting task. He has to change the perception of Vodafone externally, transform attitudes and processes internally and restore the company to growth in the midst of a severe recession. However, up until now he has been keeping pretty quiet on how he’s been tackling these issues.
The signs of change are immediately apparent on visiting Vodafone’s UK headquarters in Newbury. Laurence likens the feel of the place previously to an insurance office, rather than a dynamic, live business. To remind employees of this, he has set up an electronic read out in the foyer area, which displays the amount of data, calls and texts that are going over the network on an hourly basis.
The directors’ offices have all gone, replaced by open plan spaces and hot desking. Commercial, technical and other teams are all gathered into specific areas of the campus to help break down the silo working mentality. ‘It’s more than just show,’ says Laurence, ‘you have to create an environment where people want to change. I didn’t want people to be expected to change and not change the environment around them.’
Laurence is in the process of hauling in his technical teams from various sites around the country into a state of the art network operations centre (NOC) at the Newbury campus. ‘I like to be able to walk out of my office and talk to my technical team,’ he says.
The NOC will provide Vodafone with real-time analysis of what’s happening with all its network infrastructure equipment, as well as the means to monitor in microscopic detail what each of its customers is doing. ‘We can tell if a text you’ve sent is three seconds late arriving before you know about it,’ says Laurence.
A new corporate customer centre is also under construction, where the company will explain the benefits of its Vodafone One and One Net fixed-line converged services offerings.
A state of the art communications centre, staff gym and a multi-use pavilion are also a testament to the changes Laurence has introduced, along with brightly coloured furniture, posters and other features to relieve the previous grey monotones.
But Laurence’s key focus in restoring Vodafone to health since he joined the company has been concentrated on ‘fixing the basics’. Part of that has involved cutting costs, which has led to some painful job losses in 2009 and more in 2010, amounting to around 20% of the company’s UK workforce.
Management hasn’t escaped either, with a number of senior staff leaving, especially on the consumer side. ‘50% of my direct reports have changed, as have 25% of the next level down,’ says Laurence.
However, while cuts and staff changes are playing their part, the real weight of Laurence’s reform has been directed at overhauling Vodafone’s customer facing processes, which he tactfully describes as being ‘sub-optimal’.
‘Previously, the investment was never in sorting those things out’, he says. ‘The view was, “we’ve got a call centre to do that”. But no, we have to sort the customer process issues out, so that the call centres can focus on adding value and not being a fire extinguisher.
‘The reason we had to fix our customer processes is that we have the most legacy IT in the industry, because we’ve been around the longest. Our IT needed substantial upgrading. But sorting out IT takes time and customer processes are very complex in a business this big. My view is that we are about 50% of the way through that. There is still a long way to go,’ says Laurence.
As well as updating the IT and technical part of the process, Laurence has set up a raft of customer feedback mechanisms to find out what is and isn’t working as far as consumers are concerned. Call centres provide the main alerts, but there are also listening posts in the retail estate and account managers provide feedback from enterprise customers.
The Vodafone call centre in Stoke features a central hub occupied by process engineers and desks of customer care staff fanning out in a series of spokes. Each customer care team spends one week a year sitting with the process engineers in the central hub, known as ‘pit stop’. They take customer calls as normal, but their job is to feed the information immediately to the process engineers, who note the problems and work on solutions.
‘They explain where we have messed up the customer experience or where we haven’t explained something properly,’ says Laurence.
‘All the information is triaged in terms of the impact it has on the customer and analysed to find out how many customers it is likely to affect. The information floods down to a room here at HQ, where every single user case for each customer is listed, along with what we believe needs to be fixed next. It’s a never ending process.’
Two controllers process the most urgent problems and hand them over to the sprint teams housed in the Newbury campus to come up with the solution. The sprint team fixes are sent to India where programmers write the solutions, sometimes overnight, so that the changes can go live the next morning.
‘Some of it is an easy fix,’ says Laurence, ‘it might not even be technical, just a policy change. Some problems might require heavy duty changes to our billing system, so they might take up to six months to fix. But the point is everything is logged. We know where it has gone, what’s happening to it and when the solution is due to go live to the customer.’
Laurence cites the pay-as-you-go data pages on the company website as a recent example. Customers said there was too much to wade through and it was confusing. The answer was to cut it from 53 pages to just 16.
‘I looked at the internet traffic coming into those pages live, so I could see the bounce rate – how fast a customer looks at the page and then goes off. I could already see the improvements to the user cases as a result of slashing and burning all those pages.’
The call centre teams will then be asked about how many calls they are getting on the pay-as-you-go data pages. If the number of calls drops through the floor, the company will know it has cracked the problem. If not, the pages may have to go back to a product manager to be totally re-written, or the offer itself may have to be rethought.
It’s an example of the speed with which Laurence wants to get things done. ‘In the past, we were very slow to market, very industrial. We are much faster now, especially on the web,’ he says.
‘My CFO asks me how much is this going to cost?’ continues Laurence, with a grin. ‘I say, “I’ll tell you when we’ve finished”. You just have to keep going until it is solved, but eventually you get to a point where you don’t have to worry about the cost, because it is not so big. That’s when the net promoter score goes up, customer satisfaction rises and tha