A Case for An Ethics-Centric

Operational Model for a Service Organization

Dr.Shrikant ParikhSPJIMR, Mumbai, India

July 29th, 2015HSSE, Las Vegas

What this model is all about ? What it seeks to achieve ? Goals: Assist in improving - Ethical Standards in general - Ethical behaviour of the front office employees Assist upper management with - Figuring out, which factors impact most, a given

organization from ethical standard perspective - Hiring/terminating decisions - Organizational decisions which may leads to a more

ethical organization: enable a decision making process which factors-in ethics related considerations

- How branches really work from the ethics perspective and what are influencers

Establish links between Ethical standard of an organization, customer perception of ethics and Customer Sat

Why this approach ?

- it is quantitative, hands-on, ACTIONABLE- it is data driven, leverages standard

psycho-metric/stats techniques - therefore tends to be more believable,

trustworthy

Techniques used- data analytics, stats, psycho metric tool :

EQ Map, a System Engineering view- inspired by operational analysis approach to

understand computer system performance

Questions, management should ask (“soul searching”): How does the company benchmark itself ? How does the company design incentives ? How does company judge its success

(parameters ?) By financials ? By perception in general public : By TRUSTWORTHINESS ?What type of people it attracts and hires? (how

much emphasis on ethics ?)What is the “core” it refuses to compromise ?Are the service products “WYSIWYG” ?

This model helps create a “background of information” needed to answer these fundamental questions

Specific details of the model, approachAssumptions - “Trustworthiness of an organization”

from the point of a customer is used as a proxy for “perception of ethical-ness” of an organization- assume no interaction between “predictor” factors

- for the purpose of this discussion : a nationwide car rental company with hundreds of branches is used as an example

Phase 1 : Data Collection Goal of Phase 1: Identify a short

listed predictor variables (“factors”) which correlate most with the

1) Trustworthiness (from a customer’s perspective)

2) The ethical profile of the frontline service professional

Part 1-aWhich factors have maximum impact on the

organization being studied ? What are driving variables (“real” levers)? Find TOP 5 from the following for a subsequent parsimonious stat. Analysis

Continuous measurements recommended to be performed over a long period (1-3+ years) of the following

Measure- Service professional’s profile (from EQ Map)- CEO’s profile (do)- Branch Manager’s profile (do)- Immediate colleagues’ profile (do)- Profile of the rest of organization (do)

Phase 1-a contd.- employee satisfaction with the incentive

program- employee satisfaction with the training- employee sat. with the ambience of the location Customer oriented measurements - Customer perception (“Trustworthiness”)

before and after each service delivery episode - Customer Sat after each service delivery episode - For each professional, her performance in terms

of C.Sat, perception of Trustworthiness - Overall “average” customer sat for a branch and

organization score over a period of time - Overall “business volume” over a period of time

Phase 1-b Track impact of each of the following factors after 3, 6, 9,

12 months on the dependent variables : 1 : “customer’s rating of the trustworthiness of the organization”) 2: EP of the front line service professional (latency effects)

(for the predictor variables 1) Immediate colleagues’ profile 2) Culture (ethical profile of the rest of organization), the latency is assumed to 3 months )

- for each event above identify the most appropriate latency period for that variable

Phase 1-c Identify top 5 predictor variables from regression

analysis of data collected over 1-3 years period and their respective latency periods

Phase 2 : Ongoing Data Collection Group A It is hypothesised that “dominant genes” are going to be

the following predictor variables - CEO’s profile - Branch Manager’s profile - Service professional’s profile - “Average” Ethical index (“integrity”) of the immediate

colleagues - “Average Ethical Index” of Branch - “Average Ethical Index” of the rest of organization - Satisfaction with training - Satisfaction with incentivesCustomer centric critical measurements to be made - Customer rating of perception of the organization

(“trustworthiness”) before and after the service delivery episode. Customer rating of C.Sat.

This smaller set of measurements for above factors can be collected less frequently . E.g. once every month

Phase 2 : Group BService Professionals’ Survey to be conducted once every month

- Who is my “role model” in the branch- Who do I trust most in the branch- What is the “Type” of each branch : T0, T1, T2, T3 ?- Therefore who is most influential on

me : colleagues at the same level or supervisor or branch manager ?

Phase 3 (a) Making sense from the data collected in Phase 2 Step 1 : MULTIVARIABLE REGRESSION ANALYSIS BETWEEN THE

PREDICTOR VARIABLES AND THE “ULTIMATE” VARIABLE : TRUSTWORTHINESS of an organization

Which factors (predictor variables) have a maximum impact on Trustworthiness ?

Step 2 : MULTIVARIABLE REGRESSION ANALYSIS BETWEEN THE PREDICTOR VARIABLES AND THE ETHICAL PROFILE OF THE PROFESSIONAL

Which factors (predictor variables) have a maximum impact on the ethical profile of the professional ?

Step 3 : MULTIVARIABLE REGRESSION ANALYSIS BETWEEN THE PREDICTOR VARIABLES AND THE AVERAGE ETHICAL PROFILE OF THE BRANCH

Which factors (predictor variables) have a maximum impact on the average ethical profile of the branch ?

Which factors (predictor variables) have a maximum impact on the average ethical profile of the service professional of a branch ?

BASED ON THE ANALYSIS OF BRANCH LEVEL VARIABLES, FOLLOWING CAN BE ANSWERED

Group A -What influenced most the customer perception of

trustworthiness -What influenced most the ethical profile of front-line

service professional - What drives most the average ethical profile of the

branch - What is the “type” of branch (T0, T1, T2, T3) Therefore what are “pointers” for “fixing” a particular

branch - What is difference between ethical profile of a branch

with that of the rest of org (“sub culture”) - What are differences between profiles of different

branches ? Is there a significant variation ?

Group B Key questions this analysis will answer: - Ethical persona of service professional (“integrity”) - before he joins ? - in middle of his journey with the organization : after 1Q, 2Q, 3Q, ... - at time of separation - His perception of organization before he joined, at time of

separation - What organization “did” to the professional while she was

there - What Impacts the professional most, from all these factors - With passage of time, how service professionals have

changed ethically ? - who is overpowering who ? the organization or the service

professional ? - what is effectiveness of training programs - how effective is the company’s hiring policy and its

impact on Trustworthiness ?

Group C- What are the real levers for changing ethics and

changing customer perception ?- Where to focus for ethical improvement of org. ?- How to make specific interventions to improve

the ethical perception of the company.- in a measurable manner- in a manner which is data-driven- in a manner whereby the results can be measured

- what are the long term customer perception trends?

- what has been variation in the customers’ perception of the company over time

- how to “fix” a particular branch, - how to align (fix)incentives ?

Group D

- How strong are Co’s professed culture/values (v/v Ethics)

- What type of people it attracts ?- What is “my” Ethics Dividend- Is there a difference in the staff’s (all

levels) perception of service being delivered and customer perception of the service received

- if yes, then it is a cause of concern- Are the services “WYSIWYG” ?

How this model helps : More pointers

- Help in Hiring- Comparison with competition- Help in deciding where to give

more discretionary decision making powers : to which level in the organization ? (Depending on the ethical standard of a particular level)

- categorization by “type” of Branch has additional applications

Final comments on the model

- These are long term strategies

- Rely on intense data driven techniques

...they yield results after 2-3+ years

BUT TO BE ABLE TO MAKE AN OBJECTIVE, DATA DRIVEN IMPACT , WE DO NOT SEE ANY OTHER OPTION

Future work

- Identify more drivers of ethics- add to DB with more data- Create profiles of different

companies- Create models for different

industries : derive industry specific models

Thanks !

Questions....

Literature survey/other works