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It’s been a tough week for Heathrow’s John Holland-Kaye who, amidst ongoing travel chaos has been forced to announce a monthly passenger cap and urge partner airlines to stop selling tickets. With hindsight, many have criticised his earlier decisions to cut frontline security and airside teams, but I am sure we can all empathise with the difficulty of finding ourselves short-handed ahead of a critical period. From Christmas deliveries to end of quarter sales targets, most of us have had to deal with a service crunch period. Whilst in Heathrow’s case, I suspect it may be a case of too little, too late – Holland-Kaye’s announcement does raise an important question as to how, and when, leaders should ‘cut their losses’ and make tough decisions to address service issues before they fail.

The stark reality is that issues of staff shortages, supply chain issues and geo-political upheaval are not going away any time soon – and organisations will continue to be pushed to the brink of what is possible. As leaders, it is our unenviable task to make a judgment on when it is necessary to cut back on service provisions in order to protect long-term business performance and brand reputation.

Whilst such decisions will almost always ruffle feathers, if managed and communicated effectively, the payoff in the long-term will likely outweigh the short-term damage. The results of our latest UKCSI show exactly that, with customers clearly valuing businesses that are seen to act with integrity and openness; addressing issues head-on and being honest about their mistakes and shortcomings. Those brands that performed best, such as UK Power Networks, have been upfront with customers – setting clear expectations as to what they can – and cannot – deliver. In the case of UK Power Networks, it was their clear and honest communication through the UK’s Spring storm power outages that likely contributed to the public trust they gained at a time of critical need. Timing and foresight are critical though, and for those that understand that service is an end-to-end part of their business they are better placed to make these calls and judgements ahead of time; because they are genuinely planning and considering the customer impact well in advance.

We must also consider the impact of service failures on the wider economy. Dealing with record high levels of customer complaints is currently costing UK businesses over £9bn a month in wasted staff hours. As our nation faces the prospect of another recession, this is lost productivity we simply cannot afford. The truth is, with 61% of the UK’s employees working in customer-facing roles, there is no such thing as the ‘service economy’. It is simply the economy – and failures in customer service don’t damage the service economy, they damage the economy full stop.

As we approach the summer holidays, there is undoubtedly more travel chaos on the horizon, some of which could have been avoided by better planning, recruitment and training. And this summer will see issues right across the economy – not just in the aviation and travel sectors.

As business leaders, we need to plan with the long-term in mind – not just the here and now. Where plans fail in the execution stage we need to adapt and react quickly. And where remedies are not possible, we should think pragmatically and act decisively, making the difficult decisions to benefit the greatest number of people and communicating clearly to customers.

By facing into our mistakes – and being open and upfront in sharing the reality of our situation with our partners and the public – we can show we care about the experience of our customers and regain trust. No one wants to admit to failure, but as with so much in life, honesty is the best policy. Great leaders know when to move forward and when to regroup.

Jo Causon

Jo joined The Institute as its CEO in 2009. She has driven membership growth by 150 percent and established the UK Customer Satisfaction Index as the country’s premier indicator of consumer satisfaction, providing organisations with an indicator of the return on their service strategy investment.

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