Tom Grealy – Insight into a Massive Scale Outsourcing Experience

Derek:  Hi, and welcome to another episode of the Outsource Accelerator podcast. My name is Derek Gallimore, and this is episode number 181. So, I am lucky to have Tom Grealy back with us.

Tom is an outsourcing consultant. He’s really truly an outsourcing expert. He’s been in the game for nearly 10 years now, but he has built a country office here in the Philippines of about 15,000 staff over five years. So he’s really done outsourcing at massive scale, but also, he’s consultant for SME and small business outsourcing, so he’s really covered the whole spectrum, and he is a wealth of knowledge and information there. So, I’m sure you will learn a lot from this. I certainly enjoyed the doing the interview. If you want to get in touch with Tom or note any more about this episode, get around show notes at outsourceaccelerator.com/181, enjoy.

Derek:  Hi, and welcome back everybody. Today I’m really excited to be joined by Tom Grealy again. Hi, Tom. How are you?

Tom: Right, Derek. Good to be back.

Derek: Thank you. And yes, so Tom, if I can kind of do a bit of a hash of your background. But incredible corporate background. You’ve worked for Telstra, an Australian telecoms company, and built a team here in a country office of about 15,000 staff over five years. You’re now in outsourcing consulting, so a huge amount. And of course, based over here in Manila, Philippines, so huge amount of insight. And I’m sort of excited to tap you again for some knowledge, but I suppose, initially, do you want to just to give a bit of background to the audience that have listened to other episodes?

Tom: Yeah, sure. Hi everyone. Tom Grealy, Grealy Consulting. We specialize in helping firms, clients, with their customer service and back of house operation, shared services operations. They may be in-house or outsourced. We do a lot of work around outsourcing and offshoring. I’m based in the Philippines. I’ve been here nine years. About 50% of that work relates to the Philippines, but as I mentioned, we’ve done work in Australia, the U.S., Thailand, Hong Kong, Malaysia, all over. And so, that’s our specialty, where all the folks, myself included in my firm, have applied operational backgrounds. We’re not a strategy consultancy, so we’re kind of an operations advisor, if you like, and operational improvement. Customer service improvement is our gig.

Derek: Right. And I enjoyed talking to you in terms of the comparisons and lessons you can learn between kind of enterprise and corporate level outsourcing, where you’re dealing with hundreds or thousands of staff versus kind of SME outsourcing. One of the first things I want to kind of talk to you about is, you know, when you came over in 2005 and towards 2009, you were saying that outsourcing really lifted your game, as in the game of the blue chip enterprise that you worked for because you saw that it was exercising global best practice here in the Philippines.

You know, when I mentioned outsourcing to a lot of people, and people generally jump to the negative conclusion of, you know, either Filipino or Indian customer service. They get stuck on a call with their bank, and they have kind of frustrating customer service experience. I think that’s relatively unfair, and customer service has been going for kind of 25 years in terms of the outsourcing model. Do you think there’s kind of a hangover from 25 years ago when everyone was kind of, you know, trying to get it right, and things have really progressed now? Or are we still seeing difficulties as a result of the kind of culture and the outsourcing model?

Tom: Yeah. You know, there are stereotypes and mental models that people have, and if the customer has a bad experience, you know, and customers have bad experiences everyday. So you can’t debate that, and you know, as someone who ran a big customer service operation, I tried to be permanently professionally dissatisfied. Because what tends to happen is you tend to focus on hitting a number and telling yourself, “Look at our CSAT,” or, “Look at our MPS,” or, “Look at our resolution rate, and I’m doing a good job.” In reality, that’s not the game.

And what I find, both when I reflected on my role when we move to the Philippines… Because when you offshore, and you outsource, it exposes the fault lines in your businesses, your processes and things that are, you know, customer-oriented. And that really has nothing to do with the contact center agent who’s servicing the customer, because they’re downstream of your enterprise processes. You know, and so you have to take a step back and go, “Okay, well, how do we better manage the customer through our, you know, labyrinth of processes, and how do we do this better? And there’s no question that, you know, if a customer has a bad experience… Many customers seize on the difference. You know, they’ll hear an accent, and they will go, “Oh, it’s this person,” or, “It’s that person. I blame the Philippines. I blame India.”

At Telstra, we had a funny…not funny, but an interesting insight. We were handling in the consumer and small business space about 50 million customer interactions a year, 40 million of those in the Philippines. The CEO at the time had the complaints team, the customer advocacy team, do an analysis of customer complaints related to offshoring. And that included everything, from geography, to jobs, to anything that might indicate the customer was unhappy. The surprising finding was that notwithstanding that, you know, the overwhelming volume of calls, 80% of interactions were being dealt with customer interactions in the Philippines. Over 50% of the complaints relating to offshoring were actually related to folks who are based in Australia. Such was the diversity of the workforce in Australia.

So, you know, it’s a myth, right? So what people think customers tend to do, and it’s understandable when we get frustrated. You play the man, not the ball. And sometimes, you know, you have organizations who have outsourced, and they have not done the due diligence correctly. They have not adapted their recruitment standards. They’ve not got the right training. You know, they’re not recruiting people who are gonna be successful. And that’s the great tragedy when you see that, when you see customers who are having to deal with, you know, call center consultants, for example, who are not able to do the job. I actually feel the blame lies with the client, or the BPO, because you’ve set, you know, your employee up to fail. And that’s just really bad because you haven’t, you know, you haven’t been able to recruit and train people to the standard that your customers require.

So I tend to kind of look at it from a different point of view, like, how do we improve this now? We need to be dissatisfied all the time with whatever we have put in place. And that’s one of the tricks in the customer service space is you’ve gotta constantly have this aggressive continuous improvement mindset where you’re looking for that next little gold nugget that’s gonna enable you to get someone who’s gonna be incredibly successful in their job for you, or you can make them incredibly successful because your customers and you benefit.

Derek: Yeah, and it’s a hard task, isn’t it? Because, I mean, if you’re running a complaints line, of course, you’re gonna have the entire day full of complaints, aren’t you? So it’s a pretty hard task to really turn 100% of those around into beaming, happy clients.

Tom: Yeah. But that’s the role, isn’t it? I mean, the real job then is to have the process teams that are going back and saying, “Well, what’s the root cause, and how do we fix our processes, or our pricing?” Or whatever the root cause driver is to, you know, reduce complaint volumes in the first place.

Derek: Yeah, absolutely. And then, I mean, it’s just staggering, and it shows the sophistication of these processes as compared to maybe, you know, what SMEs deal with. But you have the data from 50 million, I suppose, conversational transactions that you can then look over, and you can sort of pull out a huge kind of statistical insight and value from that, can’t you?

Tom: That’s right. And you know, your data is your friend. You know, it enables you, gives you those insights. That’s not the hard part. The difficult bit is not, as I said before, not confusing numbers with good experience. So, you know, just because we hit a number as a team doesn’t mean we have a great customer service culture. Number two is the real work is actually driving the process improvements. And you know, that work never stops.

Derek: Yeah, absolutely. And you know, this is what I tell SMEs. I say, and because a lot of them kind of think that they’re coming over to a sweatshop or a developing country here in the Philippines. But actually, they’re tapping into 25 years of a process optimization and executive skills in that area. And you know, they might not have 50 million transactions to derive that process optimization from. But the outsources have that background. They have those 50 million transactions, which then mean that they can apply those same sort of process learnings to the SME that has two customer service staff. It’s really incredibly powerful, isn’t it? And it boils down to, you know, the SME mark just to be paying X amount for the salary per month, but they really piggyback on the 25 years of process optimization experience that the Philippines brings to the relationship.

Tom: Yeah, and that’s exactly right, Derek. And the point you make just reinforces the importance of the due diligence. If you’ve got people-based services, whether they’re customer-facing or back office, you know, you have to put the effort in up front around the recruitment and the training. If you don’t get the right people, you know, your customer service palace just turns to liquid. And you know, you just need to do that work, and/or have an outsourcer who can do that work for you to the standard that you require.

Derek: Yeah. And it’s interesting, isn’t it? Because the big enterprises, they have this processes around training people, giving them the requisite information they need so that they can do customer service. Whereas in SMEs, startups, you know, small operations, it’s almost like the boss often does the customer service because it’s only the boss that knows the product. It’s only the boss that knows the clients, and they sort of see it as a core function, which of course it is. But it’s the enterprise that actually, by nature of needing 10,000 staff to do this function, has to processize it, whatever that word is. But basically, you know, you kind of bottle it up and put it into a process so that you can recruit 10,000 people to do the job as well as possible. And yeah, it’s a completely different way of looking at things, isn’t it?

Tom: It is. But the point that you make is the right one. It doesn’t matter whether you’re a big company or a small one. You need to find a way that every employee feels close and connected to the customer. So if your customer is king, and it’s what’s gonna differentiate you in the market, I’m gonna make you successful, more people feel empowered to articulate what customers need and provide the input to improve the business to better serve the customers, the more powerful it is.

The worse feeling you have as a leader is when you feel like you have to push your team to drive change. And you know, you get frustrated because, “I never get any get any ideas. I never get feedback.” Well, that just says that you’ve built the wrong culture, where you need your team, you know, you want them on fire. You want them to be advocates for the customer. You want them to be thinking about driving productivity improvements, because that’s better for the customer.

And so, you know, you really need to take a step back and go, “Okay, well, how do I turn this around? How do I unleash the brilliance of my team? How do we, you know, capture customer insights and then operationalize them, turn them into something that’s valuable for the company as well as our customers?

Derek: Absolutely. And of course, you know, through your consulting, you very much have a foundation of enterprise level operations and execution. But do you find that you’re able to sort of boil down the lessons you’ve learned and apply them to a 10-person SME, for example? They’re still the same kind of principles, the same learnings that you can transfer over to these smaller organizations.

Tom. Yeah. I mean, you know, one of the biggest learnings is, you know, being clear about your purpose. What are you trying to create, particularly as it relates to offshoring or outsourcing? So many companies see offshoring and outsourcing as an end in itself, and it’s not. It’s a capability play. People focus on the labor arbitrage going, “Then, well, where do I see this? How do I see this as helping my business, taking my business forward? What is this going to look like in a few years’ time? And therefore, what are the internal capabilities I need to build to, you know, realize the benefits or to deliver the plan?

You know, if you move a bunch of data entry work up here, I can guarantee you, within 19 months, you’re going to be thinking about, “Well, I can move marketing work. I can move web analysis work. I can move finance work. I can move other things.” And so, quite often, the client is the limit of their own potential, the limit of what’s possible. And so, really, the only way you get around that is to come and have a look at what peer organizations have got here and how they operate.

Derek: Absolutely. Fantastic. And just, I suppose, a final query. Out of all of your clients, what proportion do come here versus generally don’t or try and defer it? Because obviously, you know, a lot of people, they’re busy, they’re tied up, they don’t have the time. What sort of proportion of your clients don’t come?

Tom: When we do work for clients, we are agnostic to location. So, you know, a lot of the work we do are global procurement exercises where we’ll look at South Africa, or India, or the Philippines, even Costa Rica, if it’s a U.S. company. What you tend to find is that work that is customer-facing or… Oh, sorry, let me answer that a different way. The really big corporates, they’re gonna have a global footprint, so they’re gonna be multiple geography. So the discussion is really around balancing the work types across the global footprint. Including their domestic market, the Philippines, India, typically. And then, what you try to do is you try to play to the strengths of the different locations. With smaller to medium-sized companies, they don’t need the complexity, and they don’t have the scale that requires a global footprint so that they need to be in India, or in the Philippines, or South Africa and the Philippines, or Costa Rica and India.

And so, what I tend to do is I tend to pick one location, and they want to grow it and treat it almost as an extension of their team. Australian companies have a very, very strong preference for the Philippines. UK, European companies tend to be a bit more of a mix with India or South Africa being prominent in their thinking, as well as the Philippines. U.S. companies, very, you know, oriented towards the Philippines, and for customer-facing work, and for back office work, Costa Rica as well.

Derek: And it’s staggering, the scale of the geography, really, isn’t it? The world really is becoming one marketplace now.

Tom: It very much is. That’s right.

Derek: Fantastic. So thank you so much, Tom. It’s amazing insight, I have certainly learned a lot. If people want to get in touch with you or learn more about your services, how can they do that?

Tom: Sure. Just drop me an email at [email protected].

Derek: Fantastic. Thanks for your time, Tom.

Tom: Thanks, Derek.

Derek: That was Tom Grealy of Grealy Consultants. If you wanna get in touch with Tom or know anymore about this episode, go to our show notes at oursourceaccelerator.com/181. And of course, if you want to ask us anything, just drop us an email to [email protected]. See you next time.