The Kingsman, the Big Banks and how not to run an NPS program


If the Banking Royal Commission has shown us anything it's the importance of culture in influencing behaviour. As we all know, as organisations grow, more and more decisions affecting clients and customers need to be delegated away from a central base of leaders. Those decisions, of course, need to get the balance right between the often competing interests of customers (clients), owners (shareholders) and employees. Organisational culture – what is and isn't acceptable in a workplace – is a major driver of just what that "right balance" ends up being. 

So how do leaders stay in control and build cultures that drive good decision making from the top to the bottom?

Well a good place to start is to take a close look at how the Big Banks have designed their incentive structures and then do the opposite. In fact, the Commission couldn't have made this point any clearer. Time and time again it has shown examples of where the availability of short-term financial incentives have had a perverse impact on employee decision making. The interests of customers, we now all know, have too often been shunted to the back of the bus – to the ultimate detriment of shareholders. 

So what has this got to do with NPS, the net promoter system, developed by Fred Reichheld and Bain and Company in 2004. Well, the same mistakes made by the Big Banks in setting incentives for selling more home loans were applied to their NPS programs. Strongly linking net promoter scores to short-term bonuses for key staff has helped breed a culture of exploitation. The system is used for its own ends, rather than for the good of the bank as a whole. 

Anyone that has a relationship with a business banker will be used to the regular phone call at net promoter survey time.

"Hi John, it's Bill from Bank X. You are about to get an NPS survey. Make sure you give us a 10 will you? By the way, are you right for golf on the weekend?"

This is as far away from the reasons Fred Reichheld and Bain built NPS as you can get. Suddenly the bank is deprived of all useful intelligence. Whatever valuable thoughts John may have on how Bank X could actually improve to make him a genuine promoter of its business is lost forever. What was done this year, continues into next year and the next and the next – particularly in the more valuable customer segment, where relationship banking is common place. 

The research shows that "learning" over "reward" cultures gain the most from feedback systems such as the NPS.

The goal of businesses using NPS should be to celebrate participation and response rates over a score. Also a focus on seeing scores improve year over year is better than fixating on the number itself. 

When beginning an NPS program many organisations get very focused on what the score is. The simple fact is that the score is, in a very real sense, already in existence. It is the collective view of your clients and customers. The act of measuring it is simply an act of you learning what it is. It is you catching up to where your clients and customers already are. Of course, comparing the score to others can be interesting, but locking it down as a baseline and then comparing it to the evolving future version of your organisation is where the real value is. 

To borrow a line from the Kingsman's Harry Hart (Colin Firth) who in turn borrowed the line from Hemingway – "There is nothing noble in being superior to your fellow [wo]man; true nobility is being superior to your former self."

When it comes to NPS, there is no replacing a genuine desire to become a better version of yourself year after year.


Greg Tilse