Jyske BankCase Facilitati on

Errol Fernandes ID: 12433960

May 2

201 2
Jyske Bank

1- What changes did the bank make to get to its new position as the most customer-focused bank? The Jyske Group is Danish bank that is owned and operated as a business. The company attaches great importance to treating their three groups of stakeholders- shareholders, clients and employees with equal respect. If the balance shifts in favour of one or two of the groups, this will be to the long-term detriment of all groups (Zeithmal, Bitner and Gremler 1996).

The bank's core values are its fundamental cornerstone. In the eyes of both clients and employees, the following traits are what make Jyske bank unique:
Common sense Open and honest Different and unpretentious Genuine interest and equal respect Efficient and persevering

These same core values led Jyske management to re-evaluate how the bank did business with its customers. The managers knew that if they were to stay true to these values that they would have to change their conservative position of the past and become a service driven and customer innovative bank within the competitive banking sector. The bank managed to achieve its new customer orientated position based on three fundemantal areas: 1- Competitive Positioning In a highly competitive banking sector, managers looked to the bank's core values and differences to establish its competitive position. The bank with the help of a consultant conducted market research into their primary target market. The research findings showed the target market consisting mainly of Dutch families (60% retail) and small Danish businesses (40% 2

commercial), were favourable towards the idea of bank that had a persona and believed in what it stood for (Zeithmal, Bitner and Gremler 1996). Additional research was also conducted in more difficult areas concerning the banks 4P's- Product, Place, Price and Promotion from a customer orientated standpoint. In contrast, soft factors such as customer relationships with the bank, served as the bank's main point of competitive differentiation. In addition, Jyske bank concentrated on service innovation and developing tools to support solution based service delivery. For example: IT systems helped employees take customers through processes to determine needs and find solutions. To avoid higher costs of maintaining certain customers, Jyske bank utilised demographic segmentation to it benefit. They also charged a higher premium and targeted only customers less likely to be a credit risk. Finally, the bank decided to embrace its own 'Jyske' persona and personality as part of its new competitive positioning even though they knew what price that came along with being purely Jyske. 2- Tangible Aspects Although the banks core products remained similar to other Danish banks, they way they delivered the service changed. This required significant changes to both tangible and intangible aspects of the bank. The bank began offering a more personalised service to its customers by assigning each customer a branch employee. Overtime, managers saw that this created problems due to nature of the branch employee job to serve many customers and therefore could not dedicate individual attention to one employee. The solution was more efficient customer orientated account teams, where each customer was dealt with by a small team of branch bankers on a individual one to one basis. In terms of branch design, the bank spend 750 million to physically redesign its branches, so it looked more like a advertising agency or a small hotel and changed the way customers interacted with bankers (Zeithmal, Bitner and Gremler 1996). The smaller details is what differentiated Jyske bank the most. For example, hiring a professional photographer to take photos of bankers business cards and then editing the photos slightly with a yellow tint, to give a more family feel gave the notion that bankers were part of the community just like a customer and not someone in authority wearing a uniform. 3- Intangible Differences Delivering on the bank's new competitiving positioning also required changes to the intangible aspects not visible to customer.

Before any branch was redesigned, all staff took part in special training sessions such as teambuilding and customer service sessions, drawing on best customer practises from the retail sector. Jyske management strongly believed that value is created through decisions and encouraged empowerment of not only employees but also of the whole branch, with the managers to set the example through their leadership and management style. Additionally, with documentation, training and legal documents all centralised at the bank's headquarters it allowed human resources to be more active in dealing with human issues and even enabled them to outsource their problem solving skills as HR professionals in the field (at a regional level) for a fee. This service was at the cost of the bank branch if they needed it, but was not compulsory.

2- Construct a detailed blueprint of the service process to highlight the changes from a customer's perspective. Service blueprinting can be defined as a picture or map that shows a service cascade so that various individuals involved in providing the service can understand and deal with it objectively, regardless of job titles or individual points of view (Zeithmal, Bitner and Gremler 1996, 265). The diagram below shows the blueprint of the various service encounters of a customer inquiring on a loan from Jyske Bank. From a customers perspective, some of the changes in service delivery, could come in the form of a more interpersonal service with a dedicated team of Jyske branch bankers along with faster loan approval- bank manager sign off rather than headoffice. Additionally, potential failure points can be identified for example if the customer is not happy with the service delivery of their branch bankers; this could impact Jyske image, core values and overall competitive position. Others failure points include, not receiving the best loan on the market or the loan approval process is delayed due to branch bankers human error.

3- How and why did Jyske Bank empower their employees? What have been the benefits? What are the potential costs? According to (Zeithmal, Bitner and Gremler 1996, 367) empowerment means giving employees the authority, skills, tools, and desire to serve the customer. Many organisations have discovered that to be reactive to customer needs, frontline staff need to be empowered to accommodate changing requests or provide a solutions themselves if something is wrong. Furthermore research suggests that empowering employees can result in better job satisfaction, job stress and better outcomes for customers. In reference to Jyske bank the reason why empowerment strategies works best is: - Jyske bank business strategy is one of differentiation and customisation. - Bank customers are long-term relationship customers - Technology is complex - The business environment is unpredictable By examining the organisational structure, Jyske bank were able to see where value was created and were should decisions be made to generate the most value for its customers (Zeithmal, Bitner and Gremler 1996). Example of empowerment in action include flexible working hours, vacation time and branch managers rather than head office approving major loans. The benefits have been discussed earlier in terms of better employee job satisfaction, job stress and better outcomes for customers. In terms of cost, this could as a result of employee misuse of flexible work conditions and

new employee training costs to learn the Jyske way of delivering a service to its customers.

4. Describe the strategies Jyske Bank used to deliver service quality through people. Be sure to discuss all the dimensions of service quality? Research suggests that customers judge service quality based on multiple factors. These can range from perceptions of the outcome provided, the process by which outcomes are delivered and the quality of the physical surroundings (Zeithmal, Bitner and Gremler 1996, 113). The research identified five specific areas of service quality: Reliability- which is the ability to perform the service as efficiently and reliably as possible. In other words, company's delivering on their promises. For Jyske bank, their business strategy became one of differentiation based on customer orientation as a result of their core values. They wanted to move away from being the conservative bank of the past and focus on delivering on the individual banking needs of its customers. Firms need to be aware of customer expectations surroundings (Zeithmal, Bitner and Gremler 1996, 113). Reliability is the most important determinant in terms of perception of a service. Responsiveness- is wiling to help customers and provide a prompt service. Responsiveness is communicated to a customer by length of wait time for receiving assistance, answers to questions or problem solving. For responsiveness to work a company needs to view the service delivery and handling of service from a customer's perspective. To differentiate based on responsiveness, companies need to have well trained front line staff and responsive people across all positions surroundings (Zeithmal, Bitner and Gremler 1996, 114). Managers at Jyske bank believed that because the employee is in direct contact with the customer who made a loan application, the quality of information in applications increased, more borrowers worthy of credit received it and large loan approval phases reduced significantly from three weeks to ten days with smaller loans being approved almost instantly. Assurance- defined as employee's courtesy and knowledge of information but also the ability of the firm to motivate and create a culture of trust and confidence (Zeithmal, Bitner and Gremler 1996, 114). Customer's perceive this dimension as high risk and is therefore considered of high importance from a firms perspective- especially for service in which customers find it hard to evaluate the outcome. Building trust and loyalty cannot be achieved in one day, and is a relationship that is cemented over time. As a branch bankers working at Jyske bank the role of these bankers is to get to know their customers individually so that element of trust and loyalty can be

maintained, as this is the group who will coordinate all banking services for a long period of time. Empathy- relates to treating customers as individuals. It is critical to convey that customers are unique and special and their needs no matter how big or small can be understood and dealt with in a friendly and courteous manner. In the case of Jyske bank empathy is required when frontline staff speak to customers whose home loan has been knocked back due to poor finances or loss of work. Also it is important that certain branches having convenient opening or closing hours to account for customer busy schedules. Tangibles- refer to the physical appearance, facilities and technology (Zeithmal, Bitner and Gremler 1996, 115). Tangibles provide images that especially new customers use to evaluate service quality. At Jyske bank a customer waiting for their banker could help themselves to fresh coffee while waiting. This makes the customer not only feel welcome, it says that the bank is interested in your business no matter how big or small it may be. Abstract (Related TO Q4) Reference: Cowling, Alan, Newman and Karin. 1995. Banking on people: TQM, service quality and human resources Personnel Review 24(7): 25. http://search.proquest.com.dbgw.lis/curtin,edu.au/docview/214813accounti d=10382 Purpose An investigation into the introduction of Total Quality Management (TQM) into 2 major banks in the UK is reported on, with a special focus on the reactions of employees. Design/methodology/approach Two different approaches: Bank One uses SERVQUAL the 5 dimensions of Service Quality and Bank Two absolutes of quality dimensions. Findings This study demonstrates the success and limitations of each service quality dimension approach and provides lessons that can be learned by senior management and human resources. Research limitations/implications The case study approach used has provided a good range of learning and transferable information; although first published in 1995 it has been updated on 8 June, 2010, so can still be relevant research. Practical implications The comparison in the article of the two banks based on service quality dimensions provides valuable evidence for service industries, which as the article states is similar to the manufacturing industry. It also provides a wealth of knowledge concerning the role of human resource. However there is little evidence able to use this opportunity to achieve a more strategic role for human resources.

Originality/value Good comparison of service quality dimensions based on varying criteria of the traditional SERVQUAL approach and the absolutes of quality approach suggested. Provides valuable evidence for service industries.

References About Jyske Bank. 2011. http://jyskebank.com Cowling, Alan, Newman and Karin. 1995. Banking on people: TQM, service quality and human resources Personnel Review 24(7): 25. http://search.proquest.com.dbgw.lis/curtin,edu.au/docview/214813accounti d=10382 Zeithmal.V, M. Bitner and D. Gremler 1996. Services Marketing: Integrating customer focus across the firm. McGraw-Hill Irwin. New York.