Spring/Summer 2014: Turn Reputational Risk Into Magic
June 6, 2014
Reputational risk has often been quoted as one of the principal barriers to entry when it comes to institutional investment in the Private Rented Sector (PRS), and became an issue of mythical proportions following the publication of the Montague Review.
Happily though, two years on, we’re seeing active heavyweight investment in the industry, which proves that reputational risk should be no more of an issue in the PRS than in any other sector.
After all, every industry has its own risk factors, yet it doesn’t prevent hotels offering rooms for rent by the night, or airlines from taking to the skies or institutions managing pension funds; all potentially risky and brand damaging activities, but none so much so that they’d be considered to be wholly un-investable…
The key to mitigating business risk is twofold: minimising operational risk and maximising brand protection.
Driving down operational risk can be achieved through operational excellence by employing robust processes and procedures. Make sure that you’ve considered all eventualities, planned for the worst, devised a strategy for ensuring that it doesn’t happen and, for things that are completely out of your control, know how to react should the worst really come to the worst.
These are the fundamentals of any business and achieving operational excellence requires a knowledgeable and challenging mind-set.
Ocado is a great example of a superb operational business. The founders had a single objective when they set out in 2000; “To revolutionise the way people shop forever, by giving them a uniquely innovative and greener alternative to traditional grocery shopping.” All of the organisation’s business decisions were sense-checked against this one overriding aim.
It led to them partnering with Waitrose and pioneering online grocery retail. Fast forward a decade and when Morrisons were looking to develop an online grocery offering, rather than build their own, they turned to Ocado to leverage their already tried and tested operational platform, safe in the knowledge that it could deliver.
Over-promising is dangerous and it’s a brave organisation that sets out to be a challenger brand and promises to change a market for the better. Get it right, however, and the rewards are there to be had. Clear messaging that carefully sets the tone and manages customers’ expectations is critical; as is delivering an experience that consistently exceeds expectations.
The best way to gauge whether you’re achieving this is to ask. Continual social media conversations and ongoing, independent monitoring of customer feedback can provide the insight needed to stay on track. Linking this to training and staff remuneration helps to maintain a focus on customer experience while feedback will make sure your service enhancements are having the desired impact.
Adding A Bit Of Magic
However, the most robust operational platform, slickest of processes and most engaging brand will only get you so far. To really fly, PRS operators need to add a touch of magic. In my mind, that magic is empowerment; empowerment to flex the processes and bring a little bit of personality to bear; no one should have to deal with an inflexible automaton.
This was perfectly demonstrated when I contacted BT to fix my broadband. I had an allocated time slot of between noon and 6pm but the engineer called at 10am saying his previous jobs had finished ahead of schedule and, if convenient, he could arrive earlier than planned. Great news for me, as it would mean fewer hours waiting around at home, but, apparently, not great news for him.
When he arrived I found out that by turning up early to fix the issue the job would count as a ‘fail’ in his performance report because he’d “missed” the allocated timeslot by coming earlier. The engineer was being punished for flexing the rules and providing me with an improved customer experience.
The moral of this example is that processes and procedures should enable an organisation, not disable it. So, add some magic to a robust operational platform, look after your brand, live by its values and you could change the face of the PRS forever…