Steve Hughes, Group CEO, Coventry Building Society & The Co-operative Bank: Powering Good with Every Pound

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What makes our most customer-obsessed leaders tick?
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What's keeping them awake at night? And how and where do they see
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the future of service going? This is Causonomics, with me,
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Jo Causon, CEO of the Institute of Customer Service.
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In this podcast series, I get the inside track from CEOs,
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business leaders, investors, and journalists as they reveal the secrets to building highly
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Welcome to Causonomics, and I am delighted today
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to be joined by the brilliant Steve Hughes,
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who is Group CEO of Coventry Building Society and the Co-operative
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Bank.
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Lovely to be here, Jo.
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Great to have you with us. Steve, you lead
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that group and you brought together the Co-op Bank and into mutual
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ownership and the Coventry Building Society back in 2025,
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so just over 18 months ago. And I know that you are very driven
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by this because you talk about being a purpose-driven financial services group.
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You have over 4 million customers and 6,000 colleagues.
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And I think you are the second largest building society
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in the UK. So, really important kind of stuff that you are
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doing. Previously Chief Executive of the Principality Building Society,
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prior to that in Lloyd's Group, general insurance, and also
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automotive. And I will forgive you for this, but you were also a finance
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director too.
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I was.
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So you will clearly be able to talk very
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much about the importance of service in terms of the financial outcome for
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any business. You also, I know, champion mutuality.
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You sit on the BSA Council, Money and Pensions Service Advisory
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Board. The list goes on, Steve. So I am really delighted that you have
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kindly agreed to join me for today's conversation.
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And I want us to really kind of think about what makes this merger successful,
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the culture that you're looking to drive, the purpose of the organisation.
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And you talk about powering good with every pound and why
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you believe so much in people. And I know that you do, not products
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or technology, because you see the people as the real advantage.
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So let's get into the meat of the conversation. Tell me
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a bit about you and yourself and, and the Coventry Building Society
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and the Co-op Bank. What are you working on currently and
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what excites you?
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A little bit about me. Clearly, even though I work in Coventry,
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this is not a Coventry accent, right? I was born and bred in Swansea in
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South Wales. Dad a steelworker, mum a cleaner. You know,
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I went to comprehensive school and then did an apprenticeship.
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So my path probably into the role, I mean,
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quite an unconventional one, but actually,
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you know, I've worked in manufacturing, consumer goods,
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insurance, banking, and the mutual sector.
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So really broad experience of different sectors.
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But actually, the importance of putting customer
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at the heart of those organizations was a continuum. Because when
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you're producing engines for motor cars,
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you don't really want them blowing up, right? Getting the quality right is absolutely
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crucial. You know, when I've worked in consumer brands, mainly in
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alcohol, I was chief taster.
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Must have been
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a great job.
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It was, yeah. I never drunk anybody else's brand when I worked
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for those organisations. That is true. And then when you get into financial services,
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that ability to have to meet the needs of customer
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and be around at their moment of truth, you know, is really,
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really important. So, look, my background is
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quite varied. Just in relation to—
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Just on that,
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actually, Steve. So you're right. I mean, that's a huge
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range of experiences. You mentioned something that I think was quite important.
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When you work for the drinks company, you never drank another
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person's brand. I'm presuming that was because you really believed in the brand that
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you were involved in and active with. So that connection to
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the purpose of the organization is something that's very deep-rooted in
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you.
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Yeah, brand connection was important, but I felt that
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walking in the shoe of the customer,
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yeah,
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in terms of product
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proposition was really, really important.
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And I think that's really relevant as much in financial
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services as it was in consumer goods. What I would say about consumer
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goods, the product was tangible.
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Yes.
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Seeing your brand on the end of a bar
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is quite different to seeing your brand in a Best Buy table or
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in a sort of money supermarket, I suppose,
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right?
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And probably, you know, if you think about the financial
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services side now, arguably though, absolutely critical.
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Because when we are involved in financial services products, you know,
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often this is a big decision. It's our house. It's a different
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stage of our journey in terms of being able to do the right
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thing for our families. You know, the consequences
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of getting it wrong, our pensions, our, you know, our bank accounts,
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et cetera, how we look after our money, is potentially even
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more important than whether I drink a whiskey or a vodka
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this week, etc. So the importance of what you do and
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doing that in the right way for your customers is absolutely
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critical.
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Yeah, look, there's no doubt there are key moments of truth,
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you know, within financial services. You know, maybe me just
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build on, you know, your introduction to bringing 2 organisations together.
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You know, The Co-operative Bank, the first ethical bank, 150 years of heritage.
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The Coventry Building Society, grounded in purpose,
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grounded in brilliant service to customers. Customers and members.
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And we brought both organizations together with shared values.
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But really, at the heart of that was we want
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the opportunity to sort of, you know, really manage
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the everyday money management of our customers and members. And look,
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whether it's the promotion of a savings habit,
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you know, the ability to manage family finances, which is complex,
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by the way, You know, whether it be the ability for someone to have a
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place to call home, and equally now our ability to really support
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purposeful businesses through our business banking and commercial proposition.
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You know, I think we take that responsibility really,
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really, you know, really seriously, and it's right at the heart of our purpose
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to power good with every pound. You know, and we've got customer
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missions, Joe, right at the heart of that, which is about Family finance,
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a place to call home, and supporting responsible business. So right at the
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heart of that purpose are our missions for customer.
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And connected across the whole of that. So, you know,
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as a consumer or as a customer, but also as a business.
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And that gives you a really strong advantage too, doesn't it? Because you're
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seeing every stage of an individual's life. They could be a business
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owner, a small SME. All of those connections
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are really important in terms of driving that. If we just talk about about
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the merger of those 2 really important brands.
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One thing about mutuals, one thing's about organisations that really
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care about their customers, their colleagues, the employees really care
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about that. And, you know, we're very committed to the organisations we
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work for. How did you manage that transition and that bringing that together?
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And how far through that are you? Because sometimes
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you get the issue that one brand wishes to dominate another.
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So how have you managed that, Steve?
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It's not an easy
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job, right? Because you're bringing, you know, 2 organisations with an enormous history,
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with quite established ways of doing things.
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And look, you know, we're a long way through our integration.
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You know, let's describe it as that. And that will culminate actually
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in the early part of next year with all of the bank customers
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becoming members.
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Okay.
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Okay, there's a technical term for that, which, you know,
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is called Part 7. But really, that truly then brings
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the Co-operative Bank bank back into mutual ownership. Cooperatives and
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mutuals are not the same in terms of entity structures, but where
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they are the same is they're customer-owned. And that
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is the sort of golden thread that will bring both organisations
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together, that we are a customer-owned business.
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And there are proof points that we have to walk the talk
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on to demonstrate that. And what is the value to customers? Now,
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in terms of people, We've brought all of the sort of what I call sort
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of enablement functions together on one shared technology and platform.
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All of that's been done. So finance, HR, the risk
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function.
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And what were the lessons of that? What were the pain
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points if you were going to advise other people going through it? Because we know
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that many acquisitions or mergers fail. So what did
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you learn through that, Stu?
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The good thing was this was about the power of
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the combination, right? Because this was a mortgage and savings business coming
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together with a full banking service organization. We didn't
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really have what I would call defender platforms that
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you would necessarily go to. Probably did on finance and HR, but for a
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lot of other things, we had to go with one best way.
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Yeah.
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You know, for the combined organization.
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I think the toughest thing is ways of working and
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culture. They take a long time to,
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to change because even now we're still using the word bank
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and society. I'd like to stop that. They've been used for hundreds
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of years on a combined basis. So, and then from a cultural perspective,
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whilst there's really strong alignment,
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there's also difference.
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Which is why you came together.
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You need to maximize, as you said, the alignment, but also use the differences
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to your advantage.
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And of course, one best way, best of both worlds, however you
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want to describe it, you know, that's certainly been the mindset
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with which we've approached it. And we've had to bring in some really
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strong external folk to the organization as well to increase our capability.
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But I think what we've tried to do is then create
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a shared purpose and a refreshed set of values for
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the combined organization. And those values are, we care,
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care for colleague, care for customer, care for our community,
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which was deep in both heritages, by the way. We're ambitious.
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Mm-hmm.
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Because I think, for different reasons, has the ambition of
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both organizations, you know, really been where it's needed to be? So we're ambitious.
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And, you know, we want to be a true challenger, you know, a 150-year-old challenger.
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It's a great phrase, right? And then the final value is
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we take ownership, because we have to deliver.
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Yes, big tech change and bringing the organizations together and our financial
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performance, But we have to deliver ultimately for
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the customers who own the business.
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So let's talk about those customers and
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the journey. So we've talked a bit about employees. And if we think about what's
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been interesting, you know, through this journey, the feedback that
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you've had from customers, Steve, what's— is there anything in there that surprised
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you? Or is there anything that you,
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you know, you can see that will make that uniquely different?
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So how are your customers responding?
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What I would say about the
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Co-operative Bank customers, they've been extremely loyal through thick
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and thin. They believe in the sort
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of ethical stance of the organisation.
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Our Coventry members say, look, we understand why the deal has been
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done, but we don't want you to lose your heartwood, which is what made us
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great, which is great service and strong value. And clearly
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what we want to do is be able to deepen our relationship with these customers.
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You know, we'd love every Coventry member to have a Co-operative
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Bank current account. Yeah, we'd love Co-operative Bank customers
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to have a Coventry mortgage. We'd love that sort of deepening of
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the relationship with customers. I was in Birmingham
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branch, and as you know, Jo, I love going to branches.
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You do,
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and you're very well known in the branch network.
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I love going to branches.
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So I went last Thursday because it's one of the first branches
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that we have delivered a combined service through.
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Okay,
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so it's an old Coventry branch, but it now serves Co-operative
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Bank customers and community members. And I went on the banking hall for an hour
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to talk to customers, and I specifically talked to a couple
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of Co-operative Bank customers, and one gave me the feedback that said,
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it'd be really good if you could bring some Co-operative Bank branding to
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this shared branch. So clearly, yeah, I create work for my team
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then, don't I, in terms of that voice? But
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they love you for
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it.
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Yeah, that voice of customer. And we've got digital screens screens, we've got cost-effective
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ways of doing that. It hasn't always got to be about—
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Yeah, the visual or
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the collateral.
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The signage, right? And then there was another customer who sort of said,
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I've gone into a Coventry branch 10 miles down the road, Solihull,
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but they don't serve Co-operative customers. So what they were saying
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to me is, can you just help us understand where these
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cross-servicing branches are? So we are, and I just talked to
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my team about maybe what we need to do is some real hyperlocal communication
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to these customers. So at the macro level, I've had feedback
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from members and customers, but I also get massive value
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from talking to customers in the banking hall, right?
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Well, exactly.
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And I think, you know, this leads on to some of the leadership
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attributes that you have, Steve. And when I
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look at great leaders, they do actually take the time and
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the attention to talk to real customers, not just what your feedback
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is telling you or what the team are telling you. And I think I think
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that is really, really powerful, actually getting in amongst your customers
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on the ground floor and being able to take that feedback and understand that,
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and then thinking about how that goes across
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the whole of the organisation.
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And Jo, I've done it consistently
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as a CEO. You know, when I came into the Principality CEO job, I visited
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every branch in the first 90 days before
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I wrote a 90-day plan. I visited every branch. My first afternoon
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when I was CEO of that business was on the telephones.
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Yeah.
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You know,
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in Coventry, I'm well known for turning up as
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the CEO undercover.
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Yeah.
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And just working
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in a branch for a day and actually, you know, getting that direct
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feedback from customers. And I think you've got to be prepared
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to take the rough with the smooth as well, right? Because not everything goes right.
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And we certainly see that, Steve. So if I think about, you know, whether we're
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talking about Octopus or First Direct or other organisations
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that are good and really steeped in service, their CEO
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does actually do that and actually really gets their hands dirty,
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understand what it's like at the coalface. All of that is really,
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really important. Now, one of the things we talked about at the conference is
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you highlighted the Group's mission to power good
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with every pound, and you've invested around £6 million, which is brilliant,
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in communities this year. And you recalled a story about
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how you're helping homeless who came off the streets and completed internships.
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who now work inside the customer service teams.
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So tell us a little bit more about how that is central to the purpose
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for delivering great service, and how do you make sure that that is really
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genuinely felt across the business, Steve?
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What I'd say about,
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you know, the colleagues who work with me is they
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feel a real sense of purpose. And maybe when I joined
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the organization, a lot of that was hyperlocal. I think there's still a role
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for that, right? I have a phrase, Yeah, I want to be locally loved,
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of course, but I want to be nationally known. And that's not
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an egotistical statement because we partner with Centrepoint.
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Centrepoint have— and both organisations did, quite interesting,
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right? You talk about shared values. Both organisations partnered
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with Centrepoint, and Centrepoint have a vision
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to end youth homelessness. It's a massive statement, right?
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You know, and walk around any city centre—
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And a really big issue.
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Big issue.
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You walk around any city centre in the UK, you know, whether that— whether
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that— I spent a lot of time in Coventry, and Manchester, it's a real
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issue. So what we did in Coventry, and then we matched it in Manchester,
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we gave £1 million to, you know, an organization that
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sort of partnered with Centrepoint. We were lucky that one of the
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government agencies more than matched our money. We bought 20-odd
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student flats from that investment, and 20-odd young people
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off the street, into homes, into jobs,
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supported by basic bank account. It makes a meaningful difference.
16:51.536 --> 16:54.667
And look, what we tended to do, you know, as Coventry
16:55.167 --> 16:58.762
Building Society in particular, before the transaction, was when
16:59.262 --> 17:02.535
we did internships, we would protect some of
17:03.035 --> 17:06.357
those placements for these young people. And we ended up with
17:07.513 --> 17:11.286
a couple of those young people actually getting permanent jobs with the building
17:11.786 --> 17:14.626
society, right? Which is quite humbling, inspiring,
17:15.124 --> 17:20.403
and is a fantastic proof point around powering
17:20.435 --> 17:23.725
good with every pound. It's just one example, and there are lots
17:24.225 --> 17:26.020
of examples in the combined organisation.
17:26.277 --> 17:27.802
And I'm pretty sure that colleagues across
17:28.302 --> 17:32.119
the organisation really feel that. And we know from the rest of our research,
17:32.873 --> 17:36.212
Steve, that, you know, the sense of community, that connection,
17:36.340 --> 17:40.561
is really important for colleagues as well. That sense of doing good and
17:40.657 --> 17:43.963
being able to see that. So I'm not at all surprised about that, but that's
17:44.463 --> 17:44.878
a fantastic story.
17:45.312 --> 17:46.850
I do think we need to be realistic as well though,
17:46.898 --> 17:50.023
Joe. When I talk to customers about what
17:50.523 --> 17:54.109
are the proof points of being customer-owned, they still start with value,
17:54.590 --> 17:58.292
value to them, because they say you don't have shareholders, so give
17:58.792 --> 18:02.586
us better value. They then say, because you don't have shareholders,
18:03.163 --> 18:06.704
you should provide me with a service that is brilliant and
18:07.204 --> 18:07.970
through a channel of my choice.
18:08.066 --> 18:08.323
Mm-hmm.
18:08.707 --> 18:10.710
They then say the third thing is keep
18:11.210 --> 18:14.926
my money and my data safe. And then the fourth
18:14.958 --> 18:19.190
thing they say is, make a difference to me and my world. And whether
18:19.690 --> 18:22.621
that be keeping the branch open on the high street for their parent who has
18:23.294 --> 18:23.791
dementia,
18:23.871 --> 18:24.080
yeah,
18:24.416 --> 18:26.517
whether it be supporting their son or
18:26.565 --> 18:30.428
daughter get onto the housing ladder, whether it be financial education
18:30.928 --> 18:34.869
in their local school, the vast majority of customers have this
18:35.398 --> 18:37.257
definition of the world as their world.
18:38.363 --> 18:38.496
Yes. Yeah.
18:38.887 --> 18:42.548
That's what the voice of customer tells us, and they're the proof points of
18:43.048 --> 18:43.248
being customer-owned.
18:43.790 --> 18:46.392
There's a lot in what you're saying that you can read
18:46.892 --> 18:50.103
across to other, as you said, industry sectors and other business
18:50.168 --> 18:53.188
models. Because although that allows
18:53.285 --> 18:56.543
you to be able to do that being a mutual, we know,
18:57.809 --> 19:00.957
going back to what you were talking about before, really, Steve,
19:01.639 --> 19:05.312
that those organisations that are genuinely customer-centric, make better
19:05.664 --> 19:08.469
returns, you know, have higher levels of EBITDA,
19:08.934 --> 19:12.733
have higher levels of productivity, have higher levels of revenue.
19:13.519 --> 19:16.869
So there's a— there's also a very real financial
19:16.949 --> 19:19.963
value to the organisation, to the individuals that work in it,
19:20.331 --> 19:22.495
and to the wider UK PLC.
19:22.880 --> 19:23.986
You attract more customers.
19:24.098 --> 19:24.291
Yes.
19:24.739 --> 19:27.513
You retain more customers and you deepen
19:27.529 --> 19:31.761
the relationship with customers. What I would say about our model given
19:31.777 --> 19:34.893
our scale, and, you know, I know we're a big business at $90 billion,
19:35.311 --> 19:38.459
we're still a price taker in many of the markets in which we operate.
19:38.941 --> 19:43.020
And the one way you protect yourself from being a price taker is
19:43.520 --> 19:44.016
to be differentiated.
19:44.064 --> 19:44.209
Yes.
19:44.803 --> 19:45.461
Brand,
19:45.927 --> 19:49.107
purpose, you know, what are we famous for,
19:49.123 --> 19:52.368
what do we stand for, and making sure that
19:53.155 --> 19:56.415
we delight customers. Because if you have no customers, no members,
19:56.608 --> 19:59.864
you have no business, right? And so delighting customers
19:59.896 --> 20:03.551
and deepening your relationship with customer is totally aligned
20:03.647 --> 20:06.340
to profitability and performance.
20:06.869 --> 20:10.428
And I firmly believe that performance powers purpose.
20:10.492 --> 20:13.986
It's not the other way around, because if you don't have performance, how do you
20:14.387 --> 20:17.978
do the good things? How do you invest for the future? And that performance thing
20:18.026 --> 20:21.296
is important and it's absolutely interlocked with customer.
20:21.392 --> 20:24.422
And it's almost like a virtual circle, isn't it? Of course. So being clear about
20:24.922 --> 20:28.750
your purpose, which then helps us to drive performance, the performance helps to actually
20:29.250 --> 20:29.455
reinvest in the purpose.
20:29.520 --> 20:29.840
Spot on.
20:30.513 --> 20:32.917
And then just being able to see that drive-through.
20:33.077 --> 20:36.474
Let's go back to your branch, and I do know very well because I
20:36.586 --> 20:40.127
go and visit one of your branches quite a lot, and they certainly
20:40.368 --> 20:44.053
will testify to you being in there and being amongst them.
20:44.774 --> 20:48.588
But you did talk about this around perhaps 70% of your customers
20:48.684 --> 20:52.321
who come into the branches are vulnerable. And we
20:52.369 --> 20:56.391
are in a world now where organizations are under pressure.
20:56.788 --> 20:59.762
You know, we're all trying to drive more for less. You know, I don't get
21:00.262 --> 21:04.370
through any conversation, Steve, without talking about AI and how we're deploying AI.
21:04.980 --> 21:09.346
So as you're going through this process of modernization and digitalization,
21:10.342 --> 21:14.018
how in your mind are you going to protect that human
21:14.050 --> 21:17.469
touch? Because that's a really important part of what the brand does stand
21:17.485 --> 21:17.662
for.
21:18.047 --> 21:20.391
Look, I've got a phrase and you've heard me use it,
21:20.552 --> 21:24.452
Jo, that we do need to be a digital-first business. That's our
21:24.469 --> 21:28.064
opportunity to scale cost-effectively,
21:28.658 --> 21:32.285
but also to meet the increasing needs and demands of consumers,
21:32.349 --> 21:34.773
right, in terms of our digital capability.
21:35.479 --> 21:39.106
But we'll always be human. And I think that
21:39.170 --> 21:42.509
sort of really neatly describes what we're trying to
21:42.541 --> 21:47.115
achieve. So whether it's the example of one
21:47.615 --> 21:51.209
of my branch colleagues recognizing that somebody'd come in to withdraw
21:51.709 --> 21:54.870
money under duress and the person was outside the branch.
21:55.544 --> 21:59.285
That's a real skill. Whether it's somebody on the telephone hearing
22:00.104 --> 22:04.215
the vulnerability of a customer in their voice and
22:04.715 --> 22:08.068
being able to, to interpret that and then take, take that
22:08.568 --> 22:12.130
action— really, really important. And, you know, vulnerability has
22:12.403 --> 22:13.592
lots of different—
22:14.250 --> 22:14.459
Yes.
22:14.700 --> 22:15.780
And we shouldn't
22:16.280 --> 22:19.980
narrow those down necessarily. There's quite a broad sort of spectrum
22:20.480 --> 22:21.410
of vulnerability.
22:21.820 --> 22:23.960
And you can enter vulnerability change at
22:24.460 --> 22:27.700
different stages of it. Of course. Yeah, so that recognising vulnerability.
22:27.880 --> 22:28.300
We offer
22:28.800 --> 22:32.000
a lot of basic bank accounts, which is right at the heart of what the
22:32.500 --> 22:36.140
cooperative was about. And I worked in the Cardiff branch for 6
22:36.640 --> 22:40.220
months of the co-op, and you know why, we'd been
22:40.720 --> 22:42.700
going through quite a lot as a family in terms of my son's illness,
22:43.200 --> 22:44.780
et cetera. But I worked in the branch and I remember being there one day
22:46.792 --> 22:49.987
came in, he wanted 3 months' statements. And when I then went and spoke to
22:50.487 --> 22:53.889
the colleague to say why, I could tell that the guy was vulnerable, and that
22:53.937 --> 22:57.213
was all about the fact that he needed that in order to get a roof
22:57.713 --> 23:01.275
over his head that night. I walked down past the Arndale Centre in Manchester to
23:01.388 --> 23:05.289
our branch in Manchester city centre, and 9
23:05.322 --> 23:08.709
o'clock opening, just opened, 2 guys sitting on
23:09.209 --> 23:13.109
the step, clearly vulnerable. One of them had been defrauded,
23:13.125 --> 23:16.643
right? So you, you see it, and, and it
23:17.143 --> 23:21.140
is different in a full banking service versus a savings business.
23:21.638 --> 23:23.581
Yeah, because customers have got different needs at that point.
23:23.709 --> 23:25.171
And, and current account drives,
23:25.733 --> 23:29.186
drives a very, very different and more immediate need, I suppose, in,
23:29.267 --> 23:32.623
in many ways. But, you know, I, I do think whether
23:32.639 --> 23:35.659
it's bereavement, fraud,
23:36.333 --> 23:40.349
I don't know, sort of financial well-being, I think we have an obligation to
23:40.413 --> 23:44.027
be there in a human way as well as a digital way. But you
23:44.527 --> 23:48.347
talk about AI, right? Take something like fraud. It massively affects customers,
23:48.941 --> 23:52.539
their confidence. It's probably happened to us all, but it takes over your mind,
23:52.555 --> 23:56.152
right, for that period. But AI's got a great role to play in that because
23:56.652 --> 24:00.392
actually what it can do, it can be more predictive by using past history,
24:01.613 --> 24:05.452
also help predict future modus operandis
24:05.484 --> 24:09.595
and different approaches. And actually, help my
24:09.820 --> 24:13.177
teams and the humans in the loop make better
24:13.677 --> 24:15.570
decisions and provide better outcomes for customers.
24:15.988 --> 24:17.610
Definitely. You know, Stephen,
24:17.674 --> 24:21.818
we— you can see that. And we were talking before, weren't we, about how AI
24:22.108 --> 24:25.834
is augmenting the customer experience, not replacing,
24:26.364 --> 24:29.367
you know, the individual or the agent or the human.
24:30.444 --> 24:33.752
And just to your point, I mean, very recently I've had that experience
24:34.252 --> 24:37.591
where the AI picked up some fraud on my account. I didn't know, but the
24:37.672 --> 24:41.270
AI had done that. The technology had picked that up, and then the individual
24:41.768 --> 24:44.949
phoned me and had a conversation with me, which meant that they'd gone through all
24:44.981 --> 24:48.275
the process, they'd understood that they could have a very quick conversation with me,
24:48.612 --> 24:52.403
but most importantly, they established whether I was okay and
24:52.548 --> 24:55.857
what I needed. And that was a very personal connection,
24:55.922 --> 24:59.874
and I felt confident, reassured that this organization cared
25:00.374 --> 25:03.970
about me, felt connected to me, and the issue had been dealt with. Now,
25:04.517 --> 25:06.638
you know, perhaps in the past if we hadn't had all the— you'd have gone
25:06.686 --> 25:11.667
through a whole series of checking, it had been quite a functional experience,
25:11.908 --> 25:15.491
and then we might have got to the are you okay bit of that conversation.
25:15.861 --> 25:19.091
So I couldn't agree more, using AI to augment that
25:19.139 --> 25:22.738
experience is really important. But where do you sit on this kind
25:23.238 --> 25:25.646
of— because, you know, if we're looking at the external world at the moment,
25:25.711 --> 25:28.828
we're all going to be blown up by this, you know, there's real extremes,
25:28.940 --> 25:32.774
isn't there? So how do you, in the boardroom, ensure that the
25:33.274 --> 25:36.350
conversation doesn't result to, well, actually AI
25:36.559 --> 25:40.391
can give us a productivity gain of 40%? You know, how do
25:40.891 --> 25:43.823
you make sure that the intent is a force for good?
25:44.561 --> 25:48.105
And what advice would you give for anyone that's trying to get their board
25:48.605 --> 25:51.682
to understand how to deploy AI well in an organization?
25:52.115 --> 25:55.595
There are definitely efficiency and effectiveness gains. And whilst that
25:55.723 --> 26:00.277
might deliver a cost-benefit, I genuinely believe it'll
26:00.777 --> 26:04.094
take pain points away for colleagues. Not every colleague is proud of
26:04.594 --> 26:07.974
the processes that we have, right? So I think making those better for colleague
26:08.474 --> 26:12.015
and customer, it might reduce cost, but I'm a big fan of the 3 C's.
26:13.362 --> 26:16.169
Make it better for customer, make it better for colleague,
26:16.185 --> 26:17.981
and if it adds to capital,
26:18.478 --> 26:18.814
great,
26:19.199 --> 26:22.503
fantastic. And that's really important. My view on that has been
26:23.003 --> 26:26.495
no different from when I used to do continuous improvement and Lean and Sigma.
26:27.385 --> 26:30.264
to now the use of AI.
26:32.173 --> 26:35.973
I think we've got to do this through a customer-centric way, improving our
26:36.473 --> 26:40.216
journeys, improving our experiences, improving outcomes. And I
26:40.716 --> 26:44.331
definitely believe AI with human in the loop
26:45.122 --> 26:48.486
can make us a more effective organization. So my head hurts.
26:48.534 --> 26:52.334
I've just spent 2 days at Cambridge University with some of the most
26:52.834 --> 26:55.966
brilliant academic brains in the country on a 2-day course with about 40 of my
26:55.999 --> 26:59.381
leaders around the impact of AI.
27:00.521 --> 27:04.135
And one of my favorite examples was— and
27:04.232 --> 27:07.750
we did a whole session around the impact of AI on the
27:07.814 --> 27:08.440
labor market.
27:08.713 --> 27:08.858
Yeah.
27:09.195 --> 27:11.862
But one of the best examples was the impact of AI
27:12.362 --> 27:15.749
on radiologists. So fact, the AI read
27:15.781 --> 27:17.066
the X-ray better than the human.
27:17.227 --> 27:17.371
Yeah.
27:17.708 --> 27:19.315
But every patient
27:19.815 --> 27:23.555
that comes in, a radiologist has 27 tasks to complete.
27:23.957 --> 27:25.579
How many of those tasks do you think the AI could do?
27:26.864 --> 27:28.053
Certainly not 27.
27:28.535 --> 27:31.602
One. And what that's now meant is there's greater
27:31.667 --> 27:34.975
demand for radiologists. And I think, you know, that's where
27:35.475 --> 27:39.280
the embracing of AI to deliver better outcomes,
27:39.392 --> 27:43.296
whether that be for a patient or a customer, and actually
27:43.328 --> 27:46.910
to make a colleague more effective at their job, that's the mindset
27:46.926 --> 27:49.351
with which I would approach it.
27:49.896 --> 27:53.040
Absolutely. And what you've articulated is, you know, and I
27:53.104 --> 27:55.333
love your 3 C's too on that side.
27:56.728 --> 28:00.176
But for me, this does come back to the intent. Why are we deploying the
28:00.676 --> 28:03.784
technology, whatever the technology is? I mean, we just seem to be talking a lot
28:04.284 --> 28:08.402
about AI at the moment, but improving that customer experience is
28:08.499 --> 28:12.492
what drives that. And to your point, in terms of the radiologist,
28:12.828 --> 28:16.533
that enables the radiologist to be able to concentrate on the important stuff. And I
28:17.033 --> 28:20.782
do think a lot of the time the conversation around customer service isn't about customer
28:21.282 --> 28:24.952
service, it's about process. And actually the AI is being able to take
28:25.452 --> 28:29.779
out boring, dull tasks which are repetitive, which don't add value to
28:30.279 --> 28:33.451
the customer experience in the same way that a
28:33.951 --> 28:37.300
human would be able to do that. And it allows the human to do the
28:37.800 --> 28:40.266
icing on the cake, or to your point, as you were talking about, understand whether
28:40.766 --> 28:44.468
someone's perhaps got dementia or understand whether someone is vulnerable or
28:44.756 --> 28:48.189
ensuring that that overall experience is what you would
28:48.689 --> 28:51.014
want it to be in terms of the brands, because they can focus on that
28:51.514 --> 28:55.011
good stuff. They can focus on helping the customer rather than, you know,
28:55.027 --> 28:57.226
doing the data analysis parts of that.
28:57.596 --> 28:58.671
Take something like bereavement,
28:58.719 --> 29:02.508
right? Yeah, and I've been through it with my own dad in, in terms of
29:02.732 --> 29:04.546
that, that sort of bereavement process.
29:05.943 --> 29:09.121
There are some customers who
29:09.153 --> 29:10.373
just want it done digitally.
29:10.742 --> 29:11.432
Yeah. Yes.
29:11.882 --> 29:12.845
The thought of talking to
29:13.345 --> 29:14.932
a human doing that and telling them every
29:14.932 --> 29:15.654
time that we're
29:15.654 --> 29:16.425
doing that is really
29:16.457 --> 29:20.358
challenging. There are others who absolutely want that human touch
29:20.937 --> 29:23.217
and that humanness and empathy.
29:23.587 --> 29:28.228
And I think, you know, having that ability to
29:28.244 --> 29:31.713
flex for the need of the customer and the desire of the
29:32.213 --> 29:35.407
customer is really, really important. And I've got a view, you know, there is a
29:35.907 --> 29:40.160
lot of talk about AI, but I think there's a continuum from digitization
29:40.660 --> 29:43.372
for me. You know, we've got a long way to go in terms of getting
29:43.420 --> 29:45.747
some of our digital journeys to where I want them want to get them.
29:46.084 --> 29:49.673
So really, my focus is on brilliant experience,
29:49.753 --> 29:53.295
brilliant journeys for customers. If AI has got a role
29:53.795 --> 29:57.477
to play for that in the future, then fantastic, right? But I'll tell you what
29:57.977 --> 30:02.157
I am going to use it— these thousands of pages of board papers that
30:02.926 --> 30:06.532
I have to read. I am going to develop my own little agent
30:07.032 --> 30:10.506
to just help me summarize the key points. But it's really important on AI AI,
30:10.522 --> 30:14.127
that, that some of the stuff that your agent might tell you will be fact,
30:14.607 --> 30:17.715
which is fine, that's pretty safe. But you've got to be
30:17.731 --> 30:20.711
really clear on where there's interpretation and judgment.
30:21.160 --> 30:22.442
And the questions you ask it.
30:22.522 --> 30:24.941
Exactly right. And training it, right? And, you know,
30:25.342 --> 30:28.754
removing bias is important as well. Really important. So look, you've got me on
30:28.770 --> 30:32.631
a, on a little bit of an AI soapbox. I haven't, I haven't
30:32.663 --> 30:33.609
had 2 days at Cambridge.
30:33.753 --> 30:36.076
Yeah, well, and it's a really important topic, and I
30:36.140 --> 30:39.505
love the fact that, you know, you're really clear about it's an enabler,
30:39.761 --> 30:43.095
it's a it enhances the customer experience.
30:43.512 --> 30:47.102
And you were right, it will replace humans in certain aspects.
30:47.519 --> 30:50.469
But actually, we shouldn't be threatened by that. We should see that as an opportunity
30:50.485 --> 30:54.268
to invest in future skills about what we will need from our
30:54.768 --> 30:58.275
workforce. And there will be new jobs, like every revolution that we go
30:58.775 --> 31:02.075
through— Industrial Revolution— there are new jobs that are created from that. Exactly right.
31:02.123 --> 31:05.649
Now, you did touch on moments that matter, I think you
31:06.149 --> 31:09.272
called them, and you talked about bereavement definitely being one of those. And I
31:09.772 --> 31:12.093
know, Steve, that, you know, even in your own situation,
31:13.425 --> 31:17.115
to, you know, on a personal note, you reflected how helpful
31:17.615 --> 31:20.965
or supportive Aviva was, actually, during a very difficult
31:21.465 --> 31:25.408
time. What do those moments of truth teach us about why
31:25.553 --> 31:29.307
service really matters? And where do you see
31:29.807 --> 31:31.889
people fall short, and why does that matter?
31:32.274 --> 31:33.381
For the people who are
31:33.494 --> 31:37.296
viewing this, they won't know, and, you know, you know me, Joe, I'm always
31:37.312 --> 31:40.873
happy to share. If anything, I find the ability to talk about
31:41.373 --> 31:42.493
it as a healing thing.
31:42.929 --> 31:43.042
Yeah.
31:43.090 --> 31:44.383
Process rather than, they're not my—
31:44.625 --> 31:45.045
And I hope
31:45.545 --> 31:46.224
that things are still progressing.
31:46.337 --> 31:48.728
Yeah, my son was diagnosed with
31:48.760 --> 31:52.759
leukemia 18 months ago, at the age of 18, and the
31:52.775 --> 31:55.301
service that we got from the NHS,
31:55.768 --> 31:58.583
Teenage Cancer Trust, Cure Leukemia,
31:58.985 --> 32:03.291
amongst other charities, it's quite humbling to see what,
32:03.648 --> 32:07.427
you know, those people do day in, day out for
32:07.459 --> 32:10.702
young people, but all people, but definitely young people. And then you start to
32:10.718 --> 32:13.964
talk to customers in, in some of our darkest
32:14.464 --> 32:18.532
moments, you know, whether it be asking an airline
32:19.512 --> 32:22.903
to refund my, my son's flight because he booked a lads' holiday.
32:23.128 --> 32:23.305
Yeah.
32:24.912 --> 32:27.518
And that was a no, for example. I'll never use that airline again,
32:28.197 --> 32:31.787
ever. Yeah. Or the holiday company. I'll make that choice
32:32.287 --> 32:35.408
as a dad and as a, as a consumer myself. And look, you used Aviva.
32:35.489 --> 32:38.730
I'm just gonna, I'm just gonna share it. The empathy of the call, I've never
32:39.032 --> 32:42.227
experienced anything like it. And I'm not here to promote Amanda's
32:42.727 --> 32:45.744
business, but at the end of the day, you've asked me the question.
32:46.258 --> 32:46.627
Within—
32:47.157 --> 32:49.485
they are also members of the Institute, so that's a good thing.
32:49.630 --> 32:53.387
And yeah, and I really admire the leadership in that organization in
32:53.887 --> 32:57.337
terms of customer. Within 48 hours of the
32:57.837 --> 33:01.319
claim being settled, which is the process thing, right? And, you know, that's one
33:01.495 --> 33:05.718
thing. 3 chocolate hampers turned up. and 3
33:05.766 --> 33:07.869
JD Sports vouchers for my 3 sons.
33:08.255 --> 33:08.463
Hmm.
33:08.897 --> 33:12.669
And I can't even remember talking about the rest of the family, but that customer
33:13.169 --> 33:16.426
service colleague had done that call at my darkest
33:16.926 --> 33:20.070
hour with such empathy and then followed through on it. I— for
33:20.570 --> 33:24.052
me, I just think it was brilliant
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service. And I, I did a call with, with Amanda recently on another topic,
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and, uh, I called my wife in to talk to Okay, on the teams we
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did, because that, that example was,
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was a small thing, right? You know, given, given what we were experiencing
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as a family, but massively important.
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But also what is interesting about that,
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and as you said, it wasn't just about your son that was going through that.
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The thought behind that, about the impact on the wider family
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group, the impact on your wife, the impact on your other children,
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is enormous and simple and small to do. but very
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heartfelt, very genuine. And that's what moments that matter
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are about.
34:04.370 --> 34:07.499
Culture, values, DNA of an organisation,
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recruiting the right people that can do that.
34:11.110 --> 34:12.635
So, so, so important.
34:13.036 --> 34:14.480
Culture eating strategy for
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breakfast is, I know, something that you feel very, very strongly
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about as well. We've talked quite a lot about the culture inside the organisation
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and the requirements, I guess, of great leadership.
34:27.030 --> 34:30.464
So if you were thinking about as we go forward, What do you think the
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attributes that we're going to require in leaders?
34:33.818 --> 34:34.572
I think you've got to be
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authentic. Yeah, I think leaders should be,
34:40.172 --> 34:43.558
you know, in, in a world where there is a bit of mistrust,
34:43.606 --> 34:48.163
I think you've, you've got to be true to yourself and, and values-led
34:48.660 --> 34:52.046
and consistent, right? Because, you know, if you're
34:52.546 --> 34:56.138
not and you're not walking the talk, it's, it's, it's easily seen. So, you know,
34:56.218 --> 34:59.526
I, I would say That sort of authenticity,
35:00.394 --> 35:03.928
you know, humanness, values-led, and being real
35:04.428 --> 35:07.479
and, and true, true to yourself, I think are really, really important.
35:07.865 --> 35:11.319
And connected. What you've talked about the whole of this podcast,
35:11.480 --> 35:14.918
you've demonstrated the importance of connection, whether that's to colleagues or
35:15.418 --> 35:15.464
to customers.
35:15.577 --> 35:19.192
I think connectivity comes from that humanness and,
35:19.417 --> 35:23.209
and authenticity, to be honest. I do think it comes, it comes
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from that. And I just think there are lots of leaders who have that
35:27.381 --> 35:30.413
in their armoury, but it's something I try to, you know,
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follow day in, day out really, if I can.
35:33.284 --> 35:34.118
Now, I just
35:34.618 --> 35:37.728
want to touch on 2 small points really. One is around
35:38.273 --> 35:40.872
membership of the Institute. What does that mean to you,
35:41.482 --> 35:44.161
Steve, being a member of the Institute?
35:44.546 --> 35:44.642
Well,
35:44.706 --> 35:48.460
it's interesting because I didn't know much about your organisation until you invited
35:48.960 --> 35:52.276
me to speak at the conference. I've got a brilliant leader who's joined my,
35:52.484 --> 35:56.105
my organization, Annabel, who leads
35:57.034 --> 36:00.623
all of my customer-facing colleagues generally in the business, thousands.
36:01.136 --> 36:04.324
I picked her brain and she said, yeah, this is an institute that we need
36:04.824 --> 36:08.954
to be part of, firstly in terms of what you stand for, but also in
36:08.986 --> 36:11.886
terms of what we stand for. And I did ask her actually,
36:12.896 --> 36:16.324
should I do this podcast? And she did say to me, Joe, anything Joe touches,
36:16.340 --> 36:20.811
you should be doing. So there we are. So Annabel certainly is has
36:20.843 --> 36:24.312
influenced that. And, and look, it's, it's, it's great for us to,
36:24.954 --> 36:28.037
to be, you know, in membership partnering
36:28.069 --> 36:31.794
with, with an organization that, that wants to put customer
36:32.324 --> 36:35.150
and customer service at the heart of business, right?
36:35.519 --> 36:35.937
Totally.
36:36.242 --> 36:39.919
Absolutely. I think we also share another brilliant connection, the lovely Alison
36:39.951 --> 36:40.481
Platt too.
36:40.657 --> 36:41.653
Oh, we do. Yeah.
36:42.921 --> 36:44.495
Another brilliant leader that
36:44.703 --> 36:47.032
taught me a lot about Leadership resilience.
36:47.401 --> 36:49.665
And also about, to your point, about authenticity.
36:49.825 --> 36:49.970
Yeah.
36:50.307 --> 36:50.837
She is
36:51.335 --> 36:55.012
another great example of being able to do that. So my final question,
36:55.301 --> 36:59.251
okay, because you've been very kind to me today. What is the one
36:59.443 --> 37:03.377
change that business leaders could implement today to
37:03.877 --> 37:05.689
change the future of customer service?
37:06.284 --> 37:07.247
I've been talking about it
37:07.747 --> 37:10.362
a lot with my team. People talk a lot about products.
37:11.727 --> 37:15.869
People talk a lot about service in terms of measurement of call
37:15.901 --> 37:18.936
handling times, for example. I think that is
37:19.049 --> 37:22.822
different to being customer-centric and having customer
37:23.322 --> 37:26.980
at the heart of your organization, of your propositions, of your service
37:27.480 --> 37:30.176
offering, of your digitization. And so,
37:30.834 --> 37:34.543
yeah, one of the things I'm becoming quite sort of obsessed about and curious
37:35.043 --> 37:38.316
about is what does it truly mean to be customer-centric? And what does it truly
37:38.816 --> 37:42.122
mean to have customer at the heart of your business? Because I think some of
37:42.622 --> 37:46.601
the historical ways of defining that will change. And with the onset of digitization,
37:46.730 --> 37:51.001
AI, etc., I think that is what will truly differentiate
37:51.065 --> 37:54.694
organizations. Otherwise, all you're going to be doing is you'll be searched on
37:55.194 --> 37:57.985
price. And I think that customer centricity is key.
37:58.467 --> 38:02.497
Brilliant response, Steve, as I would expect. But I also think
38:03.346 --> 38:06.920
This is a great opportunity, isn't it, to not just define what
38:06.968 --> 38:10.381
customer experience or customer centricity means to you as an
38:10.477 --> 38:13.954
organization, but to lead on that as a key
38:14.162 --> 38:17.928
differentiator. And much of the conversations that I do have,
38:18.361 --> 38:21.741
seeing the contact center or the departmental function
38:22.414 --> 38:25.763
as customer, you know, the only part of it, is where the challenges
38:25.860 --> 38:29.321
actually start. Whereas if you see the whole organization and ask
38:29.821 --> 38:32.928
yourself, At that moment of truth or those difficult moments,
38:33.329 --> 38:36.858
what does it mean to be genuinely customer-led? Then you can't go far
38:37.358 --> 38:41.396
wrong in terms of setting that strategy or delivering that strategy across
38:41.492 --> 38:42.438
the organization.
38:42.791 --> 38:44.972
No, spot on. I meet every new starter on their
38:45.472 --> 38:49.864
first day in the business, everyone. And the first reason
38:49.912 --> 38:52.173
I give them, and there are a number of reasons, but the first reason I
38:52.673 --> 38:55.749
give them, why do I meet them?
38:56.599 --> 38:58.588
is all about customer ownership.
38:58.989 --> 38:59.439
Totally.
38:59.711 --> 39:00.257
And the fact we're
39:00.757 --> 39:03.802
a customer-owned business. So, yeah, I think really, really good points, Jo.
39:04.139 --> 39:07.620
Steve, it's an absolute pleasure. Thank you so much. I could spend hours
39:07.732 --> 39:10.940
with you. It's always really fascinating. And can I just say,
39:11.502 --> 39:14.774
you know, keep doing what you're doing. It's a brilliant journey
39:15.274 --> 39:18.688
that you've been on, and I look forward to seeing that go further as
39:18.720 --> 39:20.020
we go forward. Thank you, Steve.
39:20.084 --> 39:20.773
Thanks,