· 6 min read · Features

Fixing financial services: interview with chief ombudsman

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The size of the Financial Ombudsman Service has ballooned in recent years as consumer complaints have soared. Its CEO tells HR magazine that the nature and scale of the job calls for tough but insightful leadership.

There's one word that comes out of Natalie Ceeney's mouth more often than most during our interview. That word is 'brave'. Her employees have to be brave every day. She needs a brave HR director. And she herself has had to work hard at being brave since joining the Financial Ombudsman Service (FOS) as its CEO in March 2010.

Brave is the right word to use, there's no doubt about it. Since the global financial crisis began and revelation after shocking revelation has come out about the banks' bad behaviour, the FOS has been, as she puts it, "in the eye of the storm".

The FOS was established in 2001 to help settle disputes between consumers and businesses providing financial services, such as banks, building societies, insurance companies, investment firms and financial advisers. "Every financial crisis that blows, we are deciding the cases," says Ceeney. "All you need is one big scandal and our workload goes up."

The public's mistrust in financial services is even more glaringly obvious when you see how rapidly the FOS has grown. When it was set up, it had 250 members of staff, but by the time Ceeney joined three and a half years ago, it had 1,200. It now has 3,500 employees, and is hiring another 1,000 this year. On an average week it can hire up to 50 people.

In itself, managing such fast growth while trying to provide a high-quality service to the public is a big enough people challenge to be getting on with, but Ceeney cites two more occupying her time.

First: the very nature of the job. "We resolve consumers' problems, which sounds lovely and customer-focused, but always results in us deciding in favour of one party or the other," she explains. "With every complaint we have, someone loses. Every single complaint we resolve is going to upset someone."

That's where bravery comes in again: "Calling someone in their 80s and telling them it isn't the bank's fault they've lost their life savings is a pretty hard conversation to have. Most people want to come to work to please people, so how do you keep them motivated and engaged when every day they are telling someone they haven't got what they wanted?"

Then there's the litigious environment in which the FOS operates. In October 2010, the British Bankers' Association took the FOS to court over its payment protection insurance (PPI) mis-selling decisions. In April 2011, the court ruled in favour of the FOS.

"Having the biggest banks in the UK fundamentally challenge your right to do your job, and hiring the best barristers in London to challenge you, is slightly daunting," says Ceeney. "During that period we had to stop half our operation as they threatened us with judicial review on every case we started."

PPI complaints still make up the majority of the FOS's cases. Between January and June this year, more than eight in 10 complaints were PPI-related.

Put all that together and the people management challenge is a tricky one. It's lucky, then, that in Ceeney the FOS has a CEO who absolutely gets the importance of people and strives to create a truly values-led organisation. "My view is, if you get the right people in the right jobs with the right culture, absolutely anything is possible," she says.

When Ceeney joined the FOS in 2010 - she was previously CEO of the National Archives - the organisation already had strong values, but they weren't formalised or fully aligned. Her strategy has been to make sure values dictate everything the organisation does. "We've rewritten every single policy, our pay structure, our job titles, our career model, our reward strategy and our appraisal process to be in line with our values," she says. "We make sure everything encourages and enables our staff to live our values."

That means being tough when necessary: "One of the key jobs of a leader is making sure senior people who don't walk the talk aren't there. You need to make people feel valued, rewarded and invested in, but also be clear on what you're not prepared to tolerate."

Ceeney acknowledges the FOS's values - doing the right thing, sharing knowledge, doing what you say you will and treating customers with respect - are not unusual. "What makes [us] different is we've made them part of everything," she says.

Sharing knowledge, for example, means the whole building has been redesigned to allow easy networking. Hot-desking means every desk should have a senior ombudsman sitting on it, to give advice where needed. "I want staff to be able to nab a senior person in a corridor and have a conversation," says Ceeney. "Lots of organisations have cultures of 'knowledge is power', but I need people who want to share knowledge and who will ask for help. For every problem a consumer has, someone here knows the answer, and I want staff to find that person."

With most employees making decisions every day that have a material impact on someone's life, knowledge is core. Ceeney calls it the "most valuable commodity we have". But when taking on 50 new people a week, how does the FOS ensure quality? "The last thing I will ever do is decide cases wrongly," promises Ceeney. "People's lives depend on our decision. If I take too many people on, quality will dip, but that would lead you to the answer of never hiring anyone in case you dilute expertise, and our queues would be astronomical."

A thousand people a year is the maximum number Ceeney feels her team can safely train (each new starter gets between six and nine weeks of intense training). With PPI, consumers are waiting up to 18 months for a decision, but she would rather that than the tiniest possibility of someone making the wrong call.

Having "difficult conversations" every day requires not just a high level of knowledge, but a high level of support. As Ceeney puts it: "If you have a member of staff who feels valued, confident and knowledgeable, they are going to do a better job on that difficult phone call."

It's about helping staff behave like "knowledgeable human beings" rather than automatons, she adds, and empowering them to make the right decisions. As a result, customer satisfaction is at 77% - pretty high considering only half of consumers win their case - and 70% of the public say they trust the FOS, outranking anyone else in the financial services space, Ceeney claims.

As a female CEO in the financial services industry, Ceeney is one of only a handful. When she joined the FOS, there wasn't a single woman on the executive board. Now it's a 50/50 split. "I just recruited the best people," she shrugs. But the reason men tend to progress further than women is all down to HR not embracing "marketing theory 101", she adds.

"An advert that appeals to men is not the same as an advert that appeals to women," she says. "Marketing knows that. Why doesn't HR do the same with recruitment? Men are better at crowing about their achievements, whereas a lot of women wait to be recognised. So, rather than asking people to put their heads above the parapet and apply for promotions, we run lots of talent programmes instead."

The same theory applies to writing job descriptions. "We don't list 10 essential characteristics, as in my experience men will apply when they have two, women when they have nine," she says. "Instead, describe the person and the job, so women don't weed themselves out. It isn't difficult, but for some reason this marketing theory hasn't moved over to HR."

Caring so passionately about HR and OD might have made Ceeney a "challenging chief executive" for HR director Jacquie Wiggett.

"I hope she now thinks it's far more about being supportive of putting people issues at the heart of what we do," Ceeney says. "In too many organisations, HR is an afterthought: 'Here is what we want to do, oh god we've got to take the people with us.' I think of it the other way round."

Ceeney also wants an HR function that is attuned to business needs: "I don't subscribe to there being an HR rulebook - HR is about what people you need for that business issue."

And in an HR director, she wants someone who will challenge her. "One of the big difficulties of being a chief exec is everyone tells you what they think you want to hear," she says "A lot of companies fail because the CEO builds a cult of supporters and starts to believe their own hype."

With such a heavy caseload, now is definitely not the time for the FOS to fail. "I'm probably the only CEO who would like their job to be smaller, as that would mean the banks are doing a good job," says Ceeney. "But I suspect we'll be busy for some time to come." Part of that is because problems often don't arise until years after a financial product has been purchased.

"Culture change is needed and I will wait to see the results," she continues. "While I don't believe people set out to screw a customer, banks have misaligned their incentive structures, rewarded people for the wrong things, and instilled a culture of profit over customer service. The industry has an awfully long way to go." If it needs any tips, it could always look to the FOS.