Business leaders have been saying for years that culture is important to business success . Nearly three quarters of employees state that a deterioration in company culture would make them look elsewhere for a new job . It’s a factor for customers too, with numerous research studies showing links between customer satisfaction, employees’ attitudes and the organisation having a positive, customer-centric culture.
The way an organisation listens to, and learns from, customer feedback and complaints makes a definitive statement about whether it has a culture that puts customers first.
Organisation culture and values, in practice, come from three things:
1. The decisions and actions of its leadership
2. The processes, systems and policies that are put in place
3. The actions and attitudes of its employees, who deliver the products and services
Australian Aged Care is under the spotlight of a Royal Commission inquiry, whilst from 1st July 2019 the Aged Care Quality and Safety Commission began applying a comprehensive set of 8 new quality standards in assessing service provider performance.
The quality standards clearly emphasise the importance of an open and listening culture, with Standard 6 (Feedback and complaints) setting out explicit requirements for Aged Care providers in this area. These incorporate many of the world-leading best practices defined in the Australian Standard for Complaint Management, AS/NZ 10002:2014.
However, the Royal Commission has also shown the extent to which failures in organisational culture above can lead to terrible incidents of failures in care. Whilst some providers had established values, processes and policies that committed them to listening and learning from complaints, the Commission still heard evidence of the serious damage to customer trust caused by employee and leadership behaviour that created a defensive organisational culture.
What is a defensive organisational culture towards complaints?
An organisation's culture is generated by the typical employee and managerial behaviour that takes place day-to-day. When employees and managers exhibit individual defensive behaviour, research has shown this defensiveness is replicated into a wider organisation culture. 
Defensive organisational behaviour can exist throughout the cycle of customer complaints and feedback – whether acquiring, handling or analysing and learning from them.
At the start, when acquiring complaints, the organisation can isolate itself from receiving complaints and feedback. Practices such as not telling customers how to complain, not communicating with complainants effectively and restricting the channels that customers can use are all typical examples of isolation and avoidance. Organisation staff may show hostile behaviour toward complaints – from direct rudeness, to denial of responsibility or transfer of blame for the situation onto the customer.
When handling a complaint, organisation staff may restrict the flow of information about complaints to their managers or senior executives. If information is passed along, it may be “spun” to present a biased impression, depending on the employees’ interpretation of the messages they believe managers wish to hear. Managers’ actions play a crucial role in influencing the messages their employees receive about what they do and don’t want to see happening. It is, definitively, leadership by example at this point.
Organisations may not handle the complaint well, or offer suitable redress to complainants for service failures. They may fail to adequately analyse the reasons for complaints, to isolate the root causes of dissatisfaction, or examine the trends being shown by complaint data.
Managers and senior leaders showing a lack of interest in complaints, their underlying root causes or acceptance of the reasons why customers are providing the feedback they do, sets a tone of defensive dis-interest when it comes to making changes that create a better organisation.
Organisations that don’t use intelligence from customers to drive service improvements and business change create a cycle of broken trust which further discourages people from giving feedback.
If you’ve experienced any of these situations in your organisation, it’s an indicator that you have some degree of defensive organisational culture taking place. It’s a self-fulfilling prophecy that, some-day, may lead to a defensive statement appearing in a press headline as a senior executive justifies avoidable service failure or poor performance with a statement like “well, we didn’t have any complaints.”
The consequences of defensive organisational behaviour
Defensive organisational behaviour leads to negative customer satisfaction and a negative perception of your organisation’s ability to improve from feedback. Depending on the nature of your business, this can have very serious implications. Evidence given to the Aged Care Royal Commission tells a story of customers being afraid to make complaints – scared of the actions or retributions that might be visited upon them or their loved ones.
It’s an explicit requirement of the AS/NZ 10002:2014 Standard that an organisation “should take all reasonable steps to ensure that complainants are not adversely affected because of a complaint made by them, or on their behalf.”
If organisations have written policies in place specifying this, why is it then that customers remain afraid to complain? It comes down to culture, and the actions of leaders, managers and staff on the ground.
Fear is not restricted to the Aged Care sector either. A similar finding emerged from an independent research study into the New South Wales Police Force complaints process  in 2014, with complainants concerned about the fear of retribution once they’d made a complaint.
In Local Government, a 2015 investigation by the Victorian Ombudsman identified “that there is still some way to go before councils establish a genuinely positive and receptive culture to complaints.”
Actions to counter defensive organisational behaviour
The good news is that this defensive behaviour can all be addressed – but it requires commitment throughout the organisation, starting with the leadership team. Tackling defensive organisation behaviour requires action, including:
- Leadership by example, based on belief in the value of customer feedback
- Open and transparent communication, making it easy for people to complain
- Clear policies, procedures and processes, delivered ‘on the ground’ by employees
- Independent, unbiased collection, reporting and analysis of complaints data
- Systematic analysis of trends to identify root causes of dissatisfaction
- Training to emphasise the value of complaints and a positive complaints culture
- Staff performance mechanisms that reflect, in practice, policies written on paper
Ask yourself what your customers and employees say? If they’re too afraid to tell you, it’s definitely time to face reality, take action and grasp the nettle of cultural change in complaints.
- The 2012 Deloitte Chairman’s survey reported 94% of executives as linking culture to business success. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-core-beliefs-and-culture.pdf
- Glassdoor Mission & Culture Survey 2019 • https://about-content.glassdoor.com/app/uploads/sites/2/2019/07/Mission-Culture-Survey-Supplement.pdf
- Homburg, C. & Fürst, A., 2007. See no evil, hear no evil, speak no evil: a study of defensive organizational behavior towards customer complaints. Journal of the Academy of marketing Science, 35(4), pp.523–536.
- Goodman-Delahunty, J., Beckley, A. & Martin, M., 2014. Resolving or escalating disputes? Experiences of the NSW Police Force complaints process. Australian Dispute Resolution Journal, pp.1–13.