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Global structures for trusted advice are hard

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I was reflecting on something this morning that is endemic to both banks and technology providers.  How do you provide great service to global clients?

The issue is that most companies are split into three structures: product, process and customer.  Product is the back office manufacturer; process is the middle office focused upon operational excellence; and customer is the relationship experience at the front end.  I’ve blogged before that these are all being disrupted by technology from cloud and data analytics in the back office manufacturing; to APIs and real-time processing in the middle office; to apps and the whole structure of the user experience (UX) in the front office.  But those blogs were about technology structures and this morning I was thinking about organizational structures and people.  In particular, I wondered how best to service a global client when you need product specialization, process excellence and customer relationship management (back, middle and front office).

What tends to happen in most banks and vendors is that they put into play an orchestrator at the front-end responsible for the overall customer relationship.  The orchestrator has to be intimate with all of their client’s needs and operations.  Products are only relevant if the customer is interested in them, so they bring in the product specialists only when needed.  Meanwhile, operational people are purely in place to keep the lights on.  That sounds like a simple approach used by many, but the problem arises about how you incentivize people in this model.  Typically, the front-end customer relationship person is incentivized by revenue optimization.  In other words, they are a sales person, rather than a customer relationship person.  That immediately causes issues, as the sales person will focus upon getting as many product people through the door as possible.  The product people get pissed off with the customer relationship person, as they don’t get the same commission and incentive structures.  Equally, issues arise as global customers often need contact in every country of operation, so how do you incentivize the customer relationship person in Baku to behave in a cohesive way with the global account manager in New York?  If the product person or local customer person creates an opportunity, who gets the reward?  The global account manager or the respond who created the opportunity?  How do you identify the correct person who created the opportunity?

Org Structure

Image courtesy of Global Integration


These are fundamental questions that few have answered well.  I’ve been close to many companies where their rewards and incentives structures work against each other, that the product person hates the customer relationship manager who doesn’t trust any of the local country representatives, and all work against each other and against the customer’s interests.

Hence, when we talk about trusted advisors and putting the customer’s needs first, it rarely happens.  After all, the needs of the representative come first, and that is based upon the rewards structures.  What gets measured gets done, and what gets measured and rewarded gets done first.  This is why organizational structures and their reward mechanisms are so key, and we’ve seen many ways in which this has been done wrong (think PPI and mortgage sales).

So how do you do it right?

There is no simple or single answer, as the reward and organisational structures will vary by company and operation, but a general view is that the front-end customer relationship person should be focused upon the client’s needs and hence are rewarded by customer satisfaction, rather than sales.  The product person is rewarded for sales, but can only sell if they work effectively with the customer relationship person.  Whilst the operational person is rewarded through Management By Objectives (MBOs), and has no sales focus.

I’m not sure if that’s right, so would be interested in other views of what works and does not.  Please let me know.



Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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