Greg Reed had never heard of HomeServe before he joined. Now he claims to have the best job in the world. During his time with the company they were hit with a £30 million fee for mis-selling, had a complete change of management and the business has reinvented itself in a remarkable way with a focus on people.
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Tell us about HomeServe.
HomeServe is a home assistance company. When customers have issues in their home, primarily with their electrics, water, or heating, we go help them out. We’ve got about 2.2 million customers in the UK, and 7.8 million globally. Essentially, it’s a subscription service, like an insurance against your boiler breaking down.
How would you describe the culture there?
The culture here is very customer-focused. We do that through the front line staff. We have a saying here that if you look after the people, they’ll look after the customers, and the rest takes care of itself. That’s a very simple mantra, but we live it every day. It’s really changed the company. I think 2005 is when the Financial Services Authority came into being. And at that point, HomeServe should have transitioned from a sales and marketing company that had some service with it, to a company that fully understood all the financial regulations. It sounds odd for a company this size, but it never really sunk in what it meant to be a regulated company, especially when it comes to insurance. Back then the company was very sales-focused and growth-focused. And the front line (which is your defence against anything ever going wrong) they were incentivized in the wrong way. They were incentivized on sales and growth, so there wasn’t that laser focus on the customer. And people were asking me a lot – did I have to get rid of a lot of people? Were there bad people there? All the senior managers had to pay with their jobs, so they had to go, but the front office staff and the engineers, they were all very good people who trusted the people who were leading them. And they weren’t empowered to have a say in what was happening. One of the bigger changes we had to do was to put that safety net in place, which is our front line staff.
In 2014 the largest-ever retail fine of £30.6 million was issued to HomeServe, tell us what happened?
It was a strange period between 2011, which is when the company voluntarily stopped selling, and 2014, which is when the fine came, because the company had been very transparent and talked about the fact they were under investigation. Normally, people don’t find out a company’s under investigation until the fine comes. So there was this cloud hanging over what was going to happen. There was no doubt the FCA used a new calculation on HomeServe for the first time, which is the way they do it now with everyone. And it resulted in a much larger fine than had ever been issued. Since then, RBS has had over £100 million fines. So we’re in the background as far as retail fines go now, but at the time it was quite shocking. I had staff that I cared about so it actually made me sick when I read the reasons for the fine. I also knew that it was going to be something that we would have to carry around, that we had a responsibility for and that if we were going to move forward, we would always move forward with that in the background as a backdrop to everything that we did.
What impact would you say this had on the company culture and the employer brand?
Our founder Richard Harpin, didn’t want this to be his legacy. He was starting new businesses in other countries when this happened. So he really laid the groundwork for us to be able to not waste a good crisis, and really go back to basics and do things that a listed company normally couldn’t do. There were products that I got rid of. There were inefficient things that we got eliminated that impacted the income, but we were trying to get ourselves to a steady spot where we could rebuild the company around the customer. You can’t do that when you’ve got expectations going on all the time. Strangely the crisis made the company stand up and look at itself in the mirror. There was a decision and a choice made about what the company was going to be. We were going to be about the customer, and we were able to put some things in place.
Talk us through the steps that you took to turn around the business of HomeServe?
The first thing that we did was just not selling any more, it was a good symbol to everyone that something was going to change. From there, my boss, Martin Bennett, myself and a few others, sat down and we looked at whether we were really going to be a company that was about its people who wanted to create a great environment for customers off the back of that. How were we going to rebuild the credibility of the company for the staff, because the staff felt incredibly let down and betrayed. So the first thing we did was we looked at our products and things that we didn’t think were core to what we did, like Legal Cover, we just cancelled those products and gave up some income. And some other products, we thought maybe they were too expensive. One product we cut the price in half and we fixed the value.
The biggest thing we did was we looked at, as an insurance company, every time we told the customer, “no,” was there a reason for that. Martin and I had a belief that on a product that was discretionary, any time we told a customer, “no,” it would destroy value. So we went and we changed everything about the way the products were built. One of the things that the FCA is pleased about is the fact that our claims rate has doubled over the past four years. We go out twice as much as we used to with a similar amount of customers. So the customers are getting a lot more value out of the product than they used to.
Once we had that credibility established with the staff, we told them how we wanted customers to be dealt with. That when you’re on the phone with a customer and if there’s something else that you want to do, then you should do it. And I think the staff reacted to that with “That’s nice, but we’re not sure that you mean it.” So we put a mechanism in place where every day, the staff sends us requests for things that are not in the product, so customers who aren’t covered for things. And then the staff get together across all four sites, and they go through this list of things. They decide which things we do and which things we don’t do. So there are things that the FCA would be happy for me not to do because the customers essentially don’t have that cover, but what we’re trying to do is get the staff to not just go from A to B, like a typical financial services company, but for them to go all the way to C. The only way we can get them to do that is to really empower them from the ground up. And we’ve had that meeting now every day for three years. We’ve had 10,000 different inquiries into it. They aren’t all about doing extra things for customers. Some of them are just better ways to do things, but we let the staff solve issues for customers.
We talked to the staff about people promises, which is how we treat each other and how we treat the customers. Once we had the people promises done and really embedded into the culture and into the language of how we talked to each other, the only thing to do then was just to consistently reinforce that from the bottom up and the top down. We do an amazing amount of communication, starting from the idea that we don’t have offices, that I sit out on the floor with lots of agents who give me lots of helpful tips and ideas as I try to go about my day.
Two, we have a video broadcast to the whole company every two weeks. We have something called Yammer, which is like Facebook for work. We had 6,000 comments last month alone in Yammer. So you have staff who are not afraid to put something out on an all-company forum and say, “This doesn’t seem right.” We had a great winner over the weekend that I got involved in and it essentially gives the management team the ability to participate in conversations about the things that people on the ground think, “If I were running this company, this is what I would do.” It gives you that visibility in there, and depending on what the ideas are, you can either say, “We’re going to do that,” but we never say, “That’s a bad idea that you posted that comment.” And we never take them down, but what we will do is to give that context that people sometimes want. Quite a few times, we will say, “You’re right. We’re going to change that.” I think in a nutshell, that’s the trajectory that we went down.
What is in the “People Promise”?
Our customer promise came first. We trained staff talking to customers in a workshop session. Once there was credibility, we could go back out and really create something special for the people promises.
They are similar to things that you would see in any other company when you have these type of commitments – “Dare to care, do the right thing, own it, always improve, win together, trust each other”. Then what we’ve done through the communication (like Yammer), is given people the ability to talk about these things, and that’s how we recognize and congratulate each other. It’s also how we criticize each other. We have a reward and recognition system. I sent one to an engineer today for £50 for ‘owning it’ because I had been involved in a complaint. It ended up being the Gas Board’s issue, but the engineer, instead of just saying, “Call the Gas Board,” he called the Gas Board and had them fix their stuff. When they stop and the take the time like that with a customer, it’s great to have a way to say, “Thank you for owning that”. The way we’ve set it up (without being abused by frauds) is anyone can send anyone out one of these. I think last month we did 3,500 within a company of 3,000 people. And the only thing that happens is their manager takes a look at it and makes sure it looks like it’s worth the amount, but they don’t question the sentiment. These promises are not just in the lobby. It really is part of the language of what we do. And I know it sounds very corporate and that it sounds like a lot of companies do that, but I think you’d have to come here to experience it, to see it in action, how looking after your people and looking after the customer really becomes engrained.
When people are not able to look after the customer in the way they want according to these people promises, they get noisy very quickly. As a management team, that’s great because it raises a light on issues. You need people who feel empowered to deliver that little bit of service on the end.
Did you take any specific measures to attract talent?
The most important thing on our strategy is to add value for customers. The second thing is for it to be easy for customers. The third thing is the front line first.
Another one is called Build the brand from the inside out. Our view was that if we were able to get this service right and we were able to get that right a million times a year in someone’s home, then those customers would start talking about us. And the staff would start talking about us, and that they would recommend us. And you would get a track along that customer service value train working in your direction.
With that notion we knew we needed to win awards. If we could win a few awards and attract some attention, then we could do a better job of pulling in talent. So we really focused on TrustPilot, it’s got a great score with 13,000 customer reviews. On the staff side, we decided to focus on Glassdoor. We actively encourage our staff because we think that they love working here, we can tell from our engagement score and from our staff attrition, we know how they feel about working here. So take the dare and encourage lots of them to go online and talk about the company in an anonymous review.
We’ve put messages on the big message boards around. We’ve put messages on everyone’s desktop. You do get bad reviews, but you get good reviews, and the good reviews tell a story because it’s consistent and detailed. The same things come up like the staff will mention customer first as one of the benefits, which I’m particularly proud of.
You will get the same cons, the same types of things you would get in a big front-line business like ours because some people aren’t going to enjoy it, but one of the things that’s really important for us is that we are very open in public about addressing the cons, or giving context about why they are that way.
I might reply, “I’m devastated that this is how you feel about work. It shouldn’t be like that. Why don’t you come see me?” I’m known here for having lots of one-to-ones. I’ve met with 1,000 different people over the past four years.
We end up with that vibe out there, that it’s a good place to work. Then you get in the Bloomberg top 10. You get in the Sun top 10. Just recently, we were named in Marketing Week’s 15 Best Places for Marketers to Work, alongside people like Aviva, BT, Nando’s, Heineken, McDonald’s. And for a little outfit in Walsall to be listed next to these big brand marketing giants as a top 15 place to work in the UK, is because our staff are on social media and all over the place talking about how much they like working here. It becomes a self-fulfilling prophecy.
We don’t have an employer brand. We just have a brand. And our employer brand is exactly the same as our customer brand. And it is around that idea of take care of the people, take care of the customers, and the rest will take care of itself.
What other companies inspire you in terms of culture and employer brand?
When I look at companies that I admire, they are the ones who have a consistent strategy. It’s very apparent what they’re doing because I think that is really critical for the staff to be engaged in what they’re doing. If you’re one of these companies who has a customer-facing brand, and then you have an employer brand that’s different, I think you’re living two lives. In today’s age when the staff and millennials are doing so much research, it’s so hard to understand companies, and that two-faced nature will kill you.
I looked at Amazon, and despite not allegedly being a great place to work. Their focus on the customer pervades everything they do. I think people do like working there because they like that idea. It’s the same thing for someone like Apple or John Lewis, you really feel when you talk to someone in John Lewis compared to another department store, that they will figure out a way to try to get you what you want. It’s that little extra bit that can really make a difference. I look for consistency in the brand, especially in a service brand. For the staff to be able to deliver that consumer-facing brand that becomes the employer brand – they’re all intertwined.
What’s the next big thing for HomeServe?
From a HomeServe perspective, one of the things that we’ve done was to create a culture of innovation. So for adding value to our customers and making their lives easier, we’ve invented some technology. We do a great job of going out when someone has an issue. In the future, it would be great to never have an issue, if we make sure that that happens. Does that mean that we will cannibalize our own business? Absolutely. That is why it’s important to be out there on Glassdoor, LinkedIn and other places.
If someone had told me five years ago that we would win the Insurance Times Internet of Things Product of the Year Award or Market Gravity’s Corporate Entrepreneur of the Year, I would have thought they were crazy, but now we have a hardware team sitting in Walsall. We have products rolling off the factory lines. We’ve done a lot of things with getting the basics right and getting the staff to have that sense of purpose so that our customers feel not just satisfied, but actually cared for. The next thing for us is to use technology in a better way to really help those customers.
Follow Greg on Twitter @MGregoryReed.