Jyske May 2

Bank-
Case
201
Facilitati
on 2
Jyske
Errol Fernandes ID:
12433960 Bank

1
1- What changes did the bank make to get to its new position
as the most customer-focused bank?

The Jyske Group is Danish bank that is owned and operated as a business.
The company attaches great importance to treating their three groups of
stakeholders- shareholders, clients and employees – with equal
respect. If the balance shifts in favour of one or two of the groups, this
will be to the long-term detriment of all groups (Zeithmal, Bitner and
Gremler 1996).

The bank's core values are its fundamental cornerstone. In the eyes of
both clients and employees, the following traits are what make Jyske bank
unique:

 Common sense
 Open and honest
 Different and unpretentious
 Genuine interest and equal respect
 Efficient and persevering

These same core values led Jyske management to re-evaluate how the
bank did business with its customers. The managers knew that if they
were to stay true to these values that they would have to change their
conservative position of the past and become a service driven and
customer innovative bank within the competitive banking sector. The bank
managed to achieve its new customer orientated position based on three
fundemantal areas:

1- Competitive Positioning

In a highly competitive banking sector, managers looked to the bank's core

values and differences to establish its competitive position. The bank with
the help of a consultant conducted market research into their primary
target market. The research findings showed the target market consisting
mainly of Dutch families (60% retail) and small Danish businesses (40%
commercial), were favourable towards the idea of bank that had a persona
and believed in what it stood for (Zeithmal, Bitner and Gremler 1996).
Additional research was also conducted in more difficult areas concerning
the banks 4P's- Product, Place, Price and Promotion from a customer
orientated standpoint. In contrast, soft factors such as customer
relationships with the bank, served as the bank's main point of competitive
differentiation.

In addition, Jyske bank concentrated on service innovation and developing

tools to support solution based service delivery. For example: IT systems
helped employees take customers through processes to determine needs
and find solutions.

To avoid higher costs of maintaining certain customers, Jyske bank utilised

demographic segmentation to it benefit. They also charged a higher
premium and targeted only customers less likely to be a credit risk.

Finally, the bank decided to embrace its own 'Jyske' persona and
personality as part of its new competitive positioning even though they
knew what price that came along with being purely Jyske.

2- Tangible Aspects

Although the banks core products remained similar to other Danish banks,
they way they delivered the service changed. This required significant
changes to both tangible and intangible aspects of the bank.

The bank began offering a more personalised service to its customers by

assigning each customer a branch employee. Overtime, managers saw that
this created problems due to nature of the branch employee job to serve
many customers and therefore could not dedicate individual attention to
one employee. The solution was more efficient customer orientated
account teams, where each customer was dealt with by a small team of
branch bankers on a individual one to one basis.

In terms of branch design, the bank spend 750 million to physically re-
design its branches, so it looked more like a advertising agency or a small
hotel and changed the way customers interacted with bankers (Zeithmal,
Bitner and Gremler 1996).

The smaller details is what differentiated Jyske bank the most. For
example, hiring a professional photographer to take photos of bankers
business cards and then editing the photos slightly with a yellow tint, to
give a more family feel gave the notion that bankers were part of the
community just like a customer and not someone in authority wearing a
uniform.

3- Intangible Differences

Delivering on the bank's new competitiving positioning also required

changes to the intangible aspects not visible to customer.
Before any branch was redesigned, all staff took part in special training
sessions such as teambuilding and customer service sessions, drawing on
best customer practises from the retail sector.

Jyske management strongly believed that value is created through

decisions and encouraged empowerment of not only employees but also of
the whole branch, with the managers to set the example through their
leadership and management style.

Additionally, with documentation, training and legal documents all

centralised at the bank's headquarters it allowed human resources to be
more active in dealing with human issues and even enabled them to
outsource their problem solving skills as HR professionals in the field (at a
regional level) for a fee. This service was at the cost of the bank branch if
they needed it, but was not compulsory.

2- Construct a detailed blueprint of the service process to

highlight the changes from a customer's perspective.

Service blueprinting can be defined as a picture or map that shows a

service cascade so that various individuals involved in providing the service
can understand and deal with it objectively, regardless of job titles or
individual points of view (Zeithmal, Bitner and Gremler 1996, 265).

The diagram below shows the blueprint of the various service encounters
of a customer inquiring on a loan from Jyske Bank.

From a customer’s perspective, some of the changes in service delivery,

could come in the form of a more interpersonal service with a dedicated
team of Jyske branch bankers along with faster loan approval- bank
manager sign off rather than headoffice.

Additionally, potential failure points can be identified for example if the

customer is not happy with the service delivery of their branch bankers;
this could impact ‘Jyske’ image, core values and overall competitive
position. Others failure points include, not receiving the best loan on the
market or the loan approval process is delayed due to branch bankers
human error.
3- How and why did Jyske Bank empower their employees? What
have been the benefits? What are the potential costs?

According to (Zeithmal, Bitner and Gremler 1996, 367) empowerment

means giving employees the authority, skills, tools, and desire to serve the
customer. Many organisations have discovered that to be reactive to
customer needs, frontline staff need to be empowered to accommodate
changing requests or provide a solutions themselves if something is wrong.
Furthermore research suggests that empowering employees can result in
better job satisfaction, job stress and better outcomes for customers.

In reference to Jyske bank the reason why empowerment strategies works

best is:

- Jyske bank business strategy is one of differentiation and customisation.

- Bank customers are long-term relationship customers

- Technology is complex

- The business environment is unpredictable

By examining the organisational structure, Jyske bank were able to see

where value was created and were should decisions be made to generate
the most value for its customers (Zeithmal, Bitner and Gremler 1996).
Example of empowerment in action include flexible working hours,
vacation time and branch managers rather than head office approving
major loans.

The benefits have been discussed earlier in terms of better employee job
satisfaction, job stress and better outcomes for customers. In terms of
cost, this could as a result of employee misuse of flexible work conditions
and
new employee training costs to learn the Jyske way of delivering a service
to its customers.

4. Describe the strategies Jyske Bank used to deliver service

quality through people. Be sure to discuss all the dimensions of
service quality?

Research suggests that customers’ judge service quality based on multiple

factors. These can range from perceptions of the outcome provided, the
process by which outcomes are delivered and the quality of the physical
surroundings (Zeithmal, Bitner and Gremler 1996, 113). The research
identified five specific areas of service quality:

Reliability- which is the ability to perform the service as efficiently and

reliably as possible. In other words, company's delivering on their
promises. For Jyske bank, their business strategy became one of
differentiation based on customer orientation as a result of their core
values. They wanted to move away from being the conservative bank of
the past and focus on delivering on the individual banking needs of its
customers.

Firms need to be aware of customer expectations surroundings (Zeithmal,

Bitner and Gremler 1996, 113). Reliability is the most important
determinant in terms of perception of a service.

Responsiveness- is wiling to help customers and provide a prompt

service. Responsiveness is communicated to a customer by length of wait
time for receiving assistance, answers to questions or problem solving.
For responsiveness to work a company needs to view the service delivery
and handling of service from a customer's perspective. To differentiate
based on responsiveness, companies need to have well trained front line
staff and responsive people across all positions surroundings (Zeithmal,
Bitner and Gremler 1996, 114). Managers at Jyske bank believed that
because the employee is in direct contact with the customer who made a
loan application, the quality of information in applications increased, more
borrowers worthy of credit received it and large loan approval phases
reduced significantly from three weeks to ten days with smaller loans
being approved almost instantly.

Assurance- defined as employee's courtesy and knowledge of

information but also the ability of the firm to motivate and create a culture
of trust and confidence (Zeithmal, Bitner and Gremler 1996, 114).
Customer's perceive this dimension as high risk and is therefore considered
of high importance from a firm’s perspective- especially for service in which
customers find it hard to evaluate the outcome. Building trust and loyalty
cannot be achieved in one day, and is a relationship that is cemented over
time. As a branch bankers working at Jyske bank the role of these bankers
is to get to know their customers individually so that element of trust
and loyalty can be
maintained, as this is the group who will coordinate all banking services for
a long period of time.

Empathy- relates to treating customers as individuals. It is critical to

convey that customers are unique and special and their needs no matter
how big or small can be understood and dealt with in a friendly and
courteous manner. In the case of Jyske bank empathy is required when
frontline staff speak to customers whose home loan has been knocked
back due to poor finances or loss of work. Also it is important that certain
branches having convenient opening or closing hours to account for
customer busy schedules.

Tangibles- refer to the physical appearance, facilities and technology

(Zeithmal, Bitner and Gremler 1996, 115). Tangibles provide images that
especially new customers use to evaluate service quality. At Jyske bank a
customer waiting for their banker could help themselves to fresh coffee
while waiting. This makes the customer not only feel welcome, it says that
the bank is interested in your business no matter how big or small it may
be.

Abstract (Related TO Q4)

Reference: Cowling, Alan, Newman and Karin. 1995. “Banking on people:

TQM, service quality and human resources Personnel Review 24(7):
25.
http://search.proquest.com.dbgw.lis/curtin,edu.au/docview/214813accounti
d=10382

Purpose – An investigation into the introduction of Total Quality

Management (TQM) into 2 major banks in the UK is reported on, with a
special focus on the reactions of employees.

Design/methodology/approach – Two different approaches: Bank One

uses SERVQUAL the 5 dimensions of Service Quality and Bank Two ‘absolutes
of quality’ dimensions.

Findings – This study demonstrates the success and limitations of each

service quality dimension approach and provides lessons that can be
learned by senior management and human resources.

Research limitations/implications – The case study approach used has

provided a good range of learning and transferable information; although
first published in 1995 it has been updated on 8 June, 2010, so can still be
relevant research.

Practical implications –The comparison in the article of the two banks

based on service quality dimensions provides valuable evidence for service
industries, which as the article states is similar to the manufacturing
industry. It also provides a wealth of knowledge concerning the role of
human resource. However there is little evidence able to use this
opportunity to achieve a more strategic role for human resources.
Originality/value – Good comparison of service quality dimensions based
on varying criteria of the traditional SERVQUAL approach and the absolutes
of quality approach suggested. Provides valuable evidence for service
industries.

References

About Jyske Bank. 2011. http://jyskebank.com

Cowling, Alan, Newman and Karin. 1995. “Banking on people: TQM,

service quality and human resources Personnel Review 24(7): 25.
http://search.proquest.com.dbgw.lis/curtin,edu.au/docview/214813accounti
d=10382

Zeithmal.V, M. Bitner and D. Gremler 1996. Services Marketing: Integrating

customer focus across the firm. McGraw-Hill Irwin. New York.