Empowerment is different from delegation. Delegation is entrusting a task to a team while still retaining all the decision making control. Empowerment, however, requires that a certain amount of responsibility and decision making capability is vested in the team. Assigning responsibility implies confidence in the team and confidence in its ability to take certain decisions on its own. It gives the team the independence to formulate an action plan and then implement that plan.
Empowered teams can work in several situations, here are some examples of a few:
- Empowered product marketing teams are able to come up with ideas that help create better products and services in line with customer expectations.
- Empowered teams in the services sector can help to bring about greater customer satisfaction and retention levels.
- Empowered sales teams are better at achieving their targets and forming long-term partnerships with clients.
Let’s look at an example of a customer services team at a Hotel:
The customer services team is not empowered to handle complaints. When faced with an irate customer, they have to be polite but buy time. They then have to refer back to their supervisor and work out a solution that can appease the customer. When they finally get back to the customer, the customer has his bags packed and is ready to check out to move to a competitor’s hotel!
Let’s now consider an empowered customer services team:
Lack of empowerment can be a functional glass ceiling and it can prove to be a stumbling block especially for teams that front organisations in customer services or client relations. Lack of empowerment can also slow down the work flow because the decision making is vested higher up the hierarchy. A certain amount of authority and decision making leeway helps improve work efficiency and also ensures that a team takes pride in its existence. If the team is empowered to make some of the decisions, this empowerment becomes an enabling force and positively impacts the efficiency and revenues of the organisation. Many companies have reaped tangible benefits by using empowerment as an ‘enabling force’.
The case study given next aptly portrays how empowerment can work if used properly and the benefits to the company. It is important to see the positive side of proper team empowerment in order to comprehend how it can be ineffective without the right supports.
British Airways Case:
In 1994, British Airways found that if customer complaints were not attended to within a few days of the complaint being filed, the intention to repurchase the airline’s tickets dropped significantly. They also knew that it is a lot more difficult and costly to get new customers than it is to retain existing customers. British Airways recognized the need for efficient complaint handling. In 1994 the Airline implemented a paperless computerized system for rapid response in complaint handling called CARESS which stands for Customer Analysis and Retention system. The goal was ‘immediate complaint resolution’ and this required empowerment of the compliant handling unit.
The real benefit came because British Airways combined the CARESS computerized tool with empowerment of the team that handles complaints. Much has been said and written about this case in the context of how the use of Information Systems turned around the Airline’s customer retention record but the software in itself wouldn’t have worked had they not simultaneously introduced empowerment in the complaints handling unit. It is this empowerment that played a huge role in customer-retention. The new policy briefed customer relations to use their own judgment in resolving a complaint thereby cutting down the time it takes in offering an appropriate response to the customer. The customer relations team was encouraged to take ‘ownership of the problems’ raised by customers. They were trained to write an appropriate response letter and given certain guidelines on awarding compensation to customers in order to resolve a problem. They were also briefed to use the telephone to cut down response time and were trained to be sympathetic and apologetic and to behave in manner that fosters goodwill with the customer.
Post Implementation of CARESS: The points given below are based on the findings of an outside firm that BA hired to analyze the impact of CARESS a year after implementing it:
- Customer satisfaction indicators were visibly rising.
- Quick response seemed to lower the extent of monetary reward that was necessary to mollify and satisfy the customer who complained.
- Every pound spent by the company on its customer retention initiatives was netting 2 pounds in revenue. So the returns were higher than the expenses incurred on retention measures.
- Empowerment had a big impact on morale. Job satisfaction measures for customer relations staff increased to 69% from below 20% levels earlier. The customer relations staff felt better about themselves since they were now empowered to treat customers with complaints well, in comparison to the earlier policy of just brushing off a complaint.
In conclusion, this case shows us that the use of new technology was a good step forward in streamlining customer relations management but without the proper empowerment of the complaints handling teams, the company’s achievements are unlikely to have been as dramatic. The complaints unit was transformed from a highly ineffective bunch that dragged their feet on complaints to a unit that was alive and on the go. It’s a case in point for the effective use of empowerment.
What Causes Ineffectiveness in Empowered Teams?
Team empowerment can prove to be completely ineffective and meaningless if an organisation does not support empowerment with a few key factors:
- Inadequate Investment in Training and Development: Training and development is an essential ingredient for the effectiveness of team empowerment so that the team is geared to take on the challenge of their new role. Without training the members to the standard they are expected to deliver it is unlikely the team will produce the results desired.
- Inadequate Access to Information and Other Resources: Without access to the current and latest information an empowered team will not be able to make quick decisions. If they don’t have adequate financial, technological or human resources at their disposal then they can’t implement their decisions properly. Even technical experts within the company are an important resource. For example, if sales teams can invite company experts such as engineers who have direct knowledge of the product to important sales meetings, it might help them immensely in closing the deal. If they have access to a CRM database they can create better selling strategies and even design innovative sales approaches like upselling, cross selling or bundling.
- Inadequate Guidelines on Empowerment: Empowerment requires a company to provide a framework within which the empowered team is allowed to act on its own. Inadequate guidelines can lead to ineffective unstable teams if they are given too much power without proper direction or control. It can lead to chaos and losses for the company when the team begins to make decisions that adversely affect the company. It is therefore essential to clearly establish the level of autonomy that the teams actually have. There has to be some amount of decision making scope and clear guidelines on the extent of power.
- Inadequate Encouragement and Support: The senior manager has to be prepeared to allow some of the desicion making to be passed to the members of the team. In some cases this may actually be favoured by the senior manager freeing him up to do other things. However, some managers maybe reluctant to pass control or power to someone else, either though issues of control or a lack of trust in the teams ability. The senior manager has to be willing to give up a certain amount of control and display confidence and commitment in the team process and in the team’s ability to handle its new responsibility.
Empowered teams have been the rage in the corporate world since the nineties, and it is now proven that teams that are equipped to work on their own bring in greater efficiency. The other facet of empowerment is the human angle – individuals on empowered teams feel greater satisfaction with their jobs. It’s a sense of importance and pride in doing your bit in the overall scheme of things that creates a sense of well being. It also helps people grow, think independently and explore their full potential. But the point to always keep in mind is that empowered teams can also pose major problems if they are not handled correctly or not given the right guidelines to help them self-manage their jobs.
Reference material used in compiling the British Airways case:
- Harvard Business School Case Study titled British Airways: Using Information Systems to Better Serve the Customer by Norman Klein and Professor W. Earl Sasser (1994)
- British Airways: Organizing for Customer Equity™ , http://www.customerequity.com/examples/britishair.html
- Using IT To Grow by Scott Leibs http://www.industryweek.com/CurrentArticles/ASP/articles.asp?ArticleId=389