Mr Peter Husum, Chief Executive Officer, Robinsons

Distinguished Guests

Ladies and Gentlemen

Good Morning

IMPORTANCE OF SERVICES

After 11 Sep, the sky has darkened considerably. In this period of uncertainty, we must redouble our efforts to upgrade our operations and productivity. If we take this opportunity to regroup, consolidate and acquire new skills, we will be well-positioned when the economy recovers. Now is not the time to lose our orientation and be paralysed by inaction.

One critical area to work on is our services sector. The productivity of some key service industries is low compared to the manufacturing sector. For instance, the value-added per worker of the retail trade, excluding retail of motor vehicles, is only $30,000. It is less than one third of the $103,000 in our manufacturing sector. The productivity gap in the services sector between Singapore and the leading countries is wide and even more so if we leave out the financial sector. The Institute for Management Development reported that, for 2000, the US productivity in services is US$66,000 per worker compared to US$44,000 in Singapore. In other words, the US service industries are 50% more productive than ours.

STANDARD OF SERVICES

To be more competitive, the quality of the services we provide must improve. The latest Global Competitiveness Report ranks our customer orientation as 16. Last year, we were ranked 12^th. Our ranking has come down by 4 places. Others have overtaken us.

One notable improvement is Hong Kong. It improved its ranking from 29^th to 15^th place this year. From 17 places below Singapore the year before, Hong Kong has leapfrogged Singapore in just twelve months.

Hong Kong’s improvement is not accidental. Since the opening up of China and the erosion of its manufacturing base, Hong Kong has worked hard to improve its services sector. At his National Day Rally, Prime Minister Goh gave the example of the Hong Kong sales girl who went out of her way to deliver a pair of shoes to her customer. Many of us who have been to Hong Kong can see and feel the difference.

Last year, the Hong Kong government initiated a major campaign to raise service standards. To demonstrate commitment, legislators participated as rank-and-file service workers in TV advertisements beamed across the territory. One prominent legislator, for instance, acted as a salesgirl. Another acted as a florist. A third as a taxi driver.

BEYOND SERVICE QUALITY

Why has our customer orientation ranking declined? Have we become worse? Probably not. But because we have not moved forward enough, others have overtaken us. Customer service today is no longer about meeting requirements. It is about exceeding them. With so many choices in the market, customers today need to be wooed and wowed.

We need a major shift in our orientation. We need to go beyond service quality to service excellence. This means exceeding the expectations of our customers.

One company that has done this well is The Ritz Carlton in Singapore. The hotel staff work hard to anticipate requests even before they are made, thinking ahead what customers want, and providing services before they are asked for.

So, if you’re a business traveller, they will surprise you by providing a handphone in your room with all your calls automatically forwarded to it. Or, if you are travelling with young children, you will find your room already fitted with table protectors and childproof electrical plugs.

The secret to The Ritz Carlton’s success is the company’s specific work performance standards. To provide each guest with a personal level of service, staff members are trained and required to anticipate customer needs. Each staff member notes down the habits and preferences of the guest. These reports are reviewed everyday and acted upon. So the guest who is seen jogging may find himself being greeted at the hotel entrance the next time with a bottle of water and a towel. Or the guest found consuming only Diet Coke might return to find his mini bar stocked with his favourite beverage.

Likewise, Robinsons has clear performance standards on how payments are to be received by its staff and the way change is returned. The eye contact, how the hands are to be positioned and the way goods should be packed are all clearly specified. Even the words to be spoken are scripted! At the end of each transaction, the service staff is expected to say, ‘Thank you for shopping at Robinsons’.

The company sees its cashiers differently from others. They are not regarded as mere collectors of money but as employees who can make a difference to the company. To create that special shopping experience, Robinsons trains its sales staff intensively. Staff members are taught not just how to collect money but also how to groom themselves and handle difficult customers.

Singapore Airlines stands out in the airline industry because it anticipates customer needs in detail. Passengers ask for all kinds of things on long flights. From toothpicks to safety pins, computer games, special meals, extra meals – you name it. Singapore Airlines try to meet every one of them. The company has work performance standards for all kinds of request and trains its cabin crew to meet them - from serving the champagne requested by an already intoxicated passenger to preparing that special milk formula to a crying baby. To ensure that service levels are maintained, staff undergo refresher training regularly. Their performance is closely monitored. All customer complaints are taken seriously and acted upon. The reward system incentivises such behaviour.

SERVICE EXCELLENCE

Research by PSB has shown that in the last two years, over 60% of companies in the services sector do not have clear work performance standards and procedures. In most cases, there are only broad guidelines and instructions. Supervisors don’t stipulate specific service performance standards. Many of them don’t know how. And staff are left to do as they see fit. The result: inconsistent service depending on the individual and his state of mind at that particular time.

To help companies upgrade, PSB will develop skills standards for all key industries in the services sector by 2005. Developed under the National Skills Recognition System (NSRS) and in collaboration with leading companies in the sector, these skills standards will specify service performance standards and will be supported by on-the-job training blueprints. Companies in the services sector will be able to take them off the shelf and establish work performance standards for their staff and train them to achieve service excellence.

We need a comprehensive approach. To ensure good implementation, PSB will adopt a Total Service Excellence approach. Apart from the teaching of skills, this approach will also cover service attitudes, standards and certification measurement, recognition of good performance and sharing of best practices.

PSB’s target is to develop 500 service skills standards and train 500,000 workers on important service skills by the year 2005. One aim is to raise service levels in Singapore to be among the top ten in the world by the year 2005. This is an ambitious target.

To help identify and fill service performance gaps, PSB will offer skills audits to companies as well as financial assistance for external consultancies. Details will be released shortly. A budget of $150 million has been set aside for the programme.

ROBINSONS INSTITUTE FOR SERVICE EXCELLENCE

Robinsons is a company that has adopted a total approach to service excellence. It has implemented quality service systems, empowered staff members and provided comprehensive staff training. It is a leader in our services sector.

Not resting on its laurels, it has now set up the Robinsons Institute for Service Excellence which is a first in the retail industry. The aim of the Institute is to help the company scale new heights in service excellence. I am glad that the company has agreed to share its service training blueprints with others in the services sector. I thank and commend Robinsons for its corporate citizenship and urge others to follow in Robinsons’ footsteps.

CONCLUSION

The government, on its part, will invest heavily to upgrade the infrastructure for Service Excellence. We can be much better than we are. If we succeed, not only will companies and employees in the services sector benefit, the entire economy and all Singaporeans will benefit.

On this note, it gives me great pleasure to declare the Robinsons Institute for Service Excellence open, and wish the management and staff continuing success.