A quantitative, data driven, actionable framework to improve the ethical perception of a service organization - so critical for the sustainability

1. A Case for
An Ethics-Centric
Operational Model for a
Service Organization
Dr.Shrikant Parikh
SPJIMR, Mumbai, India
July 29th, 2015
HSSE, Las Vegas

2. 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

3. 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

4. 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

5. Specific details of the model,
approach
 Assumptions
- “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

6. 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

7. Part 1-a
 Which 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)

8. 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

9. 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

10. 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 incentives
Customer 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

11. Phase 2 : Group B
Service 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 ?

12. 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 ?

13. 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 ?

14. 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 ?

15. 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 ?

16. 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” ?

17. 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

18. 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

19. 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

20. Thanks !
Questions....

21. Literature survey/other works