The power of happy staff

By MARK STORY

Having just become one of the top brass in Asia for one of the world's biggest banks, Citibank ex-pat Kiwi Shayne Elliot can't wait to get out into the regions.

But the first thing Elliot received when he arrived in Hong Kong with his Egyptian wife Najla and puppy Kenza in early April was a face mask.

With 60 per cent of Hong Kong's people walking around looking like bandits because of the severe acute respiratory syndrome (Sars) virus, it may be some time before he is allowed off the island.

When Elliot finally starts visiting the 17 countries - from New Zealand to China - under his jurisdiction, one of his clarion calls will be the power of happy staff. Research from Citibank's annual customer and staff surveys claims a direct link between employee satisfaction and return on equity (ROE) - or profit generated as a percentage of shareholder funds.

Elliot started as a trainee with Citibank in Auckland in 1985 after completing his commerce degree.

Since then, the Waitakere College old boy has become a mover and shaker within the bank. Part of its New York-based strategy team during the 1998 merger with insurance titan Travelers Group - at US$73 billion the largest corporate merger in history - he became CEO of the corporate banking side of Citibank in Australia and New Zealand in November 2000.

He recently left Sydney for Hong Kong to become the Citigroup Asia Pacific Region CEO (global transaction services). As business manager for Asia, Elliot is charged with running the company's $1.5 billion trade, custody-based and cash management business.

During a two-year stint as Egypt country manager, the bank's business doubled - he attributes much of that to initiatives implemented in response to the annual surveys.

Eighty of Citibank's 102 global operations have been running customer and staff satisfaction surveys for many years, and they reveal that bank businesses that earn a customer-satisfaction rating of 80 per cent deliver an average ROE of 39 per cent. By comparison, businesses struggling to satisfy 70 per cent of their customers provide a paltry 11 per cent ROE.

"It's hard to isolate reasons behind any increase in profit. But in Australia's case, it's been an important component in increasing ROE over the past two years," says Elliot. "If we can get customer satisfaction over 75 per cent, it will directly impact earnings."

So how do these surveys work? Every year most Citibank operations charge independent research houses to conduct anonymous surveys - asking customers to rank their satisfaction level from "very satisfied" through to "very unsatisfied". By analysing the data to death, the bank finds out where it is weakest.

Much of the previous dissatisfaction discovered among New Zealand customers was caused by tardiness in obtaining credit approvals, which could take up to 100 days.

Four years ago, customer satisfaction was struggling at around 50 per cent. By redesigning the approvals process and assessing speed monthly, says Elliot, most credit approvals took about 10 days.

Survey results also revealed that relationship managers were not well-enough versed in bank products. In response, Citibank started more intensive training, upgraded the relationship management team and broadened the team's experience and skill base by recruiting people from different banking backgrounds.

Elliot says other industries should note how quickly poor satisfaction levels can be improved. According to Greenwich, an independent customer-satisfaction survey provider, Citibank (NZ) relationship managers now sit second against their Australasian competitors.

"While customer satisfaction is our goal, we realised that employee satisfaction was the key driver," says Elliot. "Happy employees, who are more responsive, make for happier customers. Not surprisingly, we discovered that employee and customer satisfaction levels now mirror-image each other at 72 per cent across Australia and New Zealand."

Annual employee surveys assess whether staff have the resources to work effectively. Key findings revealed that employees wanted fair compensation, recognition, the opportunity to develop, and a supportive team environment. They also want to work for a company that recognises work-life balance.

"The key is to fix problems wherever we find them," says Elliot. "When I was running Citibank Australia, I also held 'pulse lunches' to gauge staff concerns - and proceeded to fix them."

He says gaining a greater share of the money companies spend on financial services comes down to better customer service - that means better people development.

It's more profitable to sell more products to existing clients. But Citibank doesn't want to take too much of any company's banking business in case the latter collapses.

"But by improving customer satisfaction, we can increase our overall share of their fee and interest-based business - typically up to around 30 per cent."

Like its parent company, Citigroup, Citibank in New Zealand targets multinationals, large local companies with foreign businesses and corporate business. While the bank has only a quarter of the 200-plus staff numbers it had during the 1980s, its balance sheet records revenue of more than $2 billion, or 3 per cent of the corporate banking market.

Improving customer satisfaction within New Zealand has been no mean feat, especially as Citibank has no branches - things are kept going electronically.

Plans to further improve customer satisfaction are expected to see Citibank NZ focus exclusively on customers, leaving the processing stuff - such as outsourcing foreign exchange and trade deals, confirmations, settlement and reconciliation - to global counterparts. "We're saying, you just focus on your customers and we'll do the rest."

Shayne Elliot's CV

* Born: Auckland

* Age: 39

* Education: Waitakere College, Auckland University (bachelor of commerce)

* Jobs: Citibank 17 years. CEO Citibank Egypt 1997-99, CEO Citibank Australia 2000-2002; Citigroup Asia-Pacific region CEO global transaction services February 2003

* Home life: Married

* Interests: Reading, hiking, travel