What exactly is your business?

• Author: Motley, L. Biff
• Position: Customer Satisfaction

Peter Drucker, the prolific and highly regarded business management consultant, was hired by The ServiceMaster Co. to help it sharpen its value proposition and management practices. ServiceMaster is a very large provider of a variety of home services, such as carpet cleaning, furniture shampooing, lawn care, pest control and others. Mr. Drucker began his work by asking the members of ServiceMaster's board of directors, "What is your business?" Some said they were the world's best household cleaning company; others said they kept people's home free from pests. Some said things like, "We maximize shareholder value" and other financial truisms. There were many answers.

After listening to this for a while, Mr. Drucker broke in and said, "You are all wrong. What you do is train people and package and sell that training! You are in the house-by-house business of performing tasks that require skill. To be successful, you must recruit, hire, train, motivate and reward people. If you do this well, the future is unlimited for your company."

The service value chain

Peter Drucker is known for his simple insights, and this is a powerful one, which applies to community banking today as much as it applied to The ServiceMaster Co. The ABA's Financial Client Satisfaction Index Service (www.clientsatisfaction.com) tracks those attributes that create customer satisfaction and value. The program measures and ranks the 20 most important value creators for a bank that participates, then compares these scores to national benchmarks. A close examination of the data shows dearly that the attributes which create the greatest value for customers are people related things, like "professionalism," "responsiveness," "friendliness" etc. Other factors, such as "pricing," "product features," "technology," etc., while certainly important to customers, pale in comparison to the people attributes.

To truly create value on an ongoing and sustainable basis, banks must focus on the "service value chain" that begins with recruiting and hiring the right kind of future bankers, then training and retraining them to be noticeably better than their counterparts. To support this strategy, management must construct and continually modify performance management...