the kpn assignment for pegasus
DESCRIPTION
An overview of the KPN case as part of EFQM's Pegasus ProgrammeTRANSCRIPT
For the last 20 years, EFQM has been committed to shaping business leaders to create a world in
which European organisations are recognised as the benchmark for sustainable economic growth.
We believe in the strength of practice based learning, rather than teaching leadership skills, tips and
tricks in a class room setting. Our Pegasus Programme was developed in cooperation with Solvay’s
Corporate University and provides a unique opportunity to improve core leadership skills through
peer assessments. It offers emerging business leaders the opportunity to learn and apply new skills
in a real organization. Through this exercise, delegates practice the skills associated with quickly
understanding a new professional context, formulating priorities, and more effectively interacting
with senior management.
Each programme is based around a real business issue from a host company. The host will provide
background information for analysis, plus make available the relevant managers and people to fully
understand the problem they are facing. In return, they are seeking suggestions from the delegates,
based on their collective experience and insights,
on how to progress.
The participants come from a range of different
companies, sectors and countries. Part of the
experience is learning how to work effectively
together as a team to complete the task at hand.
EFQM guides participants through the 7 day
program, spread over 2 sessions during a period
of 4–6 weeks. In the first session of 3 days in
Brussels, participants are coached on techniques
of strategic analysis and assessments, using
materials and information from the host
company. The second, 4 day assignment takes
place on the host’s premises. Interviews are
conducted with relevant people, conclusions and
recommendations built and, finally, a change
workshop run with senior managers from the
host.
The EFQM Pegasus Programme is designed for leaders with the capability to take a step up in
responsibility, towards managing a business unit, or to access new areas of responsibility. It is aimed
at mid-career and emerging leaders with 10 to 20 years of professional experience from all
backgrounds, companies, industries, and countries.
KPN is the leading telecommunications and ICT service provider in The Netherlands much admired
for its sector-leading levels of profitability achieved over the last ten years under the leadership of
former CEO Ad Scheepbouwer and current CEO Eelco Blok.
Continued growth within the Netherlands is not guaranteed: competition is aggressive and
increasing. The senior management of KPN’s Business Market Segment is nevertheless determined
to pursue a policy of ‘Back to Growth’ through an increased ‘share of wallet’ among existing
customers, growing the number of domains in which it is active and differentiating on excellent
customer experience.
Your mission within this Pegasus Assignment is to understand and advise the management team of
the KPN Business Market Segment how they can place themselves among the very best service
provider in the business sector in the Netherlands by the end of 2012: not just among telecoms
operators but in comparison to the very best of any service company.
In the Netherlands KPN offers wireline and wireless telephony, internet and TV to consumers, end-
to-end telecommunications and ICT services to business customers. KPN’s subsidiary Getronics
operates a global ICT services company with a market-leading position in the Benelux, offering end-
to-end solutions in infrastructure and network-related IT. In Germany and Belgium, KPN pursues a
multi-brand strategy in its mobile operations and holds number three market positions through E-
Plus and BASE. KPN provides wholesale network services to third parties and operates an efficient IP-
based infrastructure with global scale in international wholesale through iBasis. KPN aims to develop
an environment for its staff where they are expected to take responsibility early in their career and
to contribute to the business and their professional development.
The Business Market Segment of KPN has around
2,200 employees (compared with the KPN total of
19,200 for the Netherlands and 30,600 for the
group as a whole including international
operations). In 2010 turnover was of the order of
€2.5 billion (group turnover was €13.4 billion).
KPN Business Market divides the business market
into four segments by the number of employees of the customer: from small / home office of less
than 5 employees to major organisations of 150 employees or more.
The key dates for the KPN Business market case as part of the Pegasus Programme are:
Learning week (3 –days classroom): 31 August, 1st and 2nd September 2011, Belgium
4-days on site: 20th – 23rd September, the Hague, The Netherlands
Participants would need to be available to attend both these sessions to complete the programme.
Small Office / Home Office
Small
Medium
Major
‘MKB’
Large Enterprises
Number of
employees
150 - 800
50 - 149
5 - 49
<5
Market segments based on number of employees of the customer
Market shares
The Netherlands Fixed telephony ~50%
Mobile
telephony
~50%
Broadband ~41%
Mobile
international
E-Plus ~16%
BASE >18%
Strategic building blocks to sustain EBITDA growth
Customer focus is our starting point, thus we will become the
preferred Business market provider.
We leverage our market leading positions, by focusing on
market share growth and cross- and upselling opportunities.
We migrate our business to the All-IP platform, through which
we will offer IP-based services and Fibre-to-the-Office.
We will move up the value chain towards managed ICT-services.
The Getronics acquisition is instrumental in achieving this goal.
Portfolio simplification allows us to phase-out legacy services.
Customer demand will remain the principle for this process.
Cost reductions will be obtained through this simplification,
increased productivity and lower IT costs.
Customer figures*
Wire-line customers 4.4 million
Mobile customers 33.9 million
Internet customers 2.5 million
Television customers 1.2 million
* Figures at December 31, 2010
Strategy of KPN Business Market
The following ambitions have been set for
2010:
Become the leading managed ICT
service provider
Preferred business market supplier
Revenue growth with best-in-class,
margins for 2021
The strategic building blocks supporting
these ambitions are described in the next
text box.
KPN: De beste thuisspelende Telco-ICT dienstverlener in Europa
Customer preference Connected with employees
and society
Marketleader strategic
market positions
Best in class financial
performance
Excellent Customer
Experience
Growth Domains
as a basis for (future) growth
and to increase lock-in to
traditional portfolio
Share of Wallet
Win single acces
Increase growth & profit
data
Increase share of wallet
(SOW)
Make portfolio choices
Maximise value fixed and
mobile
Be the best service
provider in NL
Develop one NL way of
working
Increase customer quality
& decrease cost
Increase grip on distribution &
customer contact
KPN: Best incumbent Telco-ICT service provider in Europe
Strong customer centric
up- & cross sell approach
to compensate negative
revenu market trend
to increase customer
satisfaction and loyalty
Omzet EBITDA FCF
Increasing performance on the ‘Net Promoter Score’’
2009 2010
2011
NPS
Improved peformance.
Brand Preference MBO
Increasingly higher percentages
Mobile Voice / Data
Fixed Voice / Data
Higher levels of profitability
To target improvements KPN has chosen one of the toughest metrics: the Net Promoter Score (or
‘NPS’), which seeks to maximise the percentage of customers willing to recommend the company
and reduce to an insignificant percentage the proportion who are not satisfied. It is a target which
stretches notions of what it means to have good customer relationships: customers who are ‘merely’
satisfied do not count in the score.
NPS is taken seriously by KPN: an ‘NPS Board’ has been assigned to direct progress towards initiatives
that are most likely to create real breakthroughs in the customer’s experience.
The NPS board has defined the following key focus areas for action:
1. Aligning service proposition and customer promise
It’s not only what you do: it’s making sure that you are able to make reliable promises to the
customer and then keep them. An explicit assignment of responsibilities has been defined for all
elements of the customer process: each of Business Market’s top 50 managers is responsible for
ensuring that progress is made on one of more specific elements of the ‘customer promise’.
2. Empowerment to solve customer problems
KPN Business Market has been careful to review how the delegation of authority can be pushed as
close as possible to the customer: rather than seek approval from the hierarchy, front line agents
have increased capability and power to take decisions
3. Integrated view of the customer picture
By integrating the various sources of data from CRM, Operational and Financial systems, KPN
Business Market is building a sophisticated view of what is happening in front of the customer and
continuous measurement of their preferences. The NPS metric is not just a high level target: it is also
measured and actionable at the customer level.
4. Simplicity
Customers value clarity and the ease with which they can do business with KPN. Equally, KPN
benefits from reducing the costs associated with maintaining many or complex processes. By
focussing on simplicity in transactions, KPN can both improve satisfaction and reduce cost.
5. Online customer care
Business customers increasingly want solutions that are transparent and easy to access on line.
Consistent with its technological and market positioning KPN Business Market aims to give its
business customers the most complete and satisfying online customer service.
The description of customer and
production processes is
compliant with the Telecom Operators
Map (e-TOM).
This model of the international
Telecom Management Forum is
agreed upon by the 700 corporate
members of IT and Telecom operators
in 195 countries.
Are the quality programmes underway in KPN likely to deliver on the ambition to be the best
service company in the Netherlands? Is this strategy (to be a service leader) clearly defined,
consistently and effectively deployed throughout the organisation?
On site in the Hague, you will have the opportunity to interview a wide variety of managers,
representing all the functions relevant to the strategy of the Business Market and in particular those
who can provide a perspective on how the organisation aims to make breakthrough performance in
customer service. Your key senior management contacts will be John van Vianen CEO of Business
Market and Annelore Buijs, who heads the largest unit within Business Market, Customer Service and
Operations.
Prior to arriving in the Hague EFQM will have organised a site visit and interview schedule, based on
the focus and priorities agreed at the initial session in Brussels.
You will have the opportunity to engage with senior
managers of KPN-Business Market at the end of the
four day assignment in the Hague. Going beyond the
traditional feedback of and EFQM assessment, the team
will lead participants from KPN through a workshop
during which the first steps to deploy your
recommendations will be agreed. Your feedback will
include recommendations for ‘quick wins’ as well as
more fundamental change.
In doing so you will be following in good footsteps: in
March 2007 an earlier Pegasus team worked with the forerunner to the Customer Service and
Operations team, helping them on their path to success.
©EFQM 2011
EFQM
Avenue des Olympiades 2
B-1140 Brussels – Belgium
Tel : +32 2 775 3511
Fax : +32 2 775 3535
Email : [email protected]
http://www.efqm.org
In the last 4 years, the programme has been run in 13 different organisations, including Solvay, Volvo
Cars, Lloyds Banking Group, T-Systems Multi-Media Solutions, Grundfos, Robert Bosch, Siemens
Congleton in addition to an earlier programme also at KPN.
Excellent and innovative program bringing inputs from Best in Class companies that will help to
support our road to Excellence. Special mention to the win-win situation installed in this program with
Peer Assist session bringing value for the host. Olivier Campy, Vice President, Sanden Manufacturing
Europe
I thought it was an excellent programme…Especially valuable with Pegasus is the contact with the
host organisation: you get to know whether your recommendations are valuable or not – something
that is not possible from classroom case studies alone. Mark Finnie, Group Marketing Director, Strix
For more information or registration, please contact us via e-mail ([email protected]) or via
telephone (+32 2 775 3511). The price for this 2 week programme is € 5000 for member
organisations and € 7000 for non-affiliated companies.