According to a recently conducted survey of Australian directors by KPMG, a global network of independent member firms offering audit, tax and advisory services customer really is king. The survey of 600 members of the Australian Institute of Company Directors (AICD) was carried out in December 2018, at the end of a year dominated by headlines of poor treatment of customers by financial institutions.
In almost every question, customers – and employees – were given top priority in the eyes of directors, ahead of other stakeholders or issues. The survey covered listed, private, not-for-profit and public sector.
Alison Kitchen, KPMG Chairman said: “After 12 months of the Royal Commission and what it exposed, perhaps it is not surprising that the survey showed treating customers well is top of mind for directors. This reinforces the findings of a separate KPMG survey of CEOs released late last year. After years of perhaps paying lip-service to the idea of the customer being king, organisations are now truly putting customer at the centre of their thinking. Restoring trust was not identified as a specific answer in this survey but it seems to have permeated other issues like keeping customers and employees satisfied.”
Key survey findings:
- In the survey, in terms of prioritising stakeholders, customers and employees rated 8 out of 9 in terms of significance to the relevance and viability of the business. Investors, government and the local community were behind on 6/9.
- On identifying the critical issues impacting the organisation, customer satisfaction came top with 8/9 followed by employee satisfaction and internal culture/conduct – rather than financial outcomes. Next, on 7/9, came: Public trust; demonstrating social values/contribution to society; innovation and disruption; financial responsibility/sustainability; and cost competitiveness.
- 30 percent of directors rated customer satisfaction as a key metric for measuring the organisation’s ability to deliver value. Following this were Values (effective leadership and workforce alignment to company values) at 18 percent and Employee engagement and innovation at 17 percent.
- It is evident that the younger directors (those aged 18 – 34) are much more passionate about the potential impact of cyber security, innovation and disruption, digital transformation, cost competitiveness and the workforce of the future. It is also noteworthy that the nearest group to the younger directors were those aged 75 and over.
- Communicating and engaging with stakeholders openly was rated the key answer to building stakeholder engagement. Transparency of business practices and decision-making and maintaining social license to operate were the next most highly rated.
“Overall, the most heavily weighted theme was People, Conduct and Culture - unsurprising given royal commissions and enquiries into conduct, and quality of service in financial services and health. Internal culture and conduct, employee satisfaction and customer satisfaction are all key. KPMG believes that this reflects directors’ priorities: the need to focus on improving outcomes for customers and employees over short term financial performance and maximising returns,” Alison Kitchen added.