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Good afternoon, Richard.
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Thank you for finding the time to speak to us today
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and share with us the learnings
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of running large transformations.
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Delighted, Deepak, very happy to help.
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As you think about this whole transformation,
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what were the two or three key challenges
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Centrica was facing as you thought about
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launching this large-scale transformation?
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So you had government intervention
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and regulatory intervention,
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the Competitions Market Authority,
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all looking and questioning the amount of price
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or the prices that the customers were being charged
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and asking whether it was a fair
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and properly competitive market.
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The second set of drivers, really, were around
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this evolution to, what we refer to as digital.
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So, our customer base was forever experiencing
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a better and better digital experience across
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the banks and the telcos
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and the other parts of the service sector.
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But the energy companies were still, really, I think,
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stuck, as in the sort of what I'd describe as,
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the fat utility space,
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and hadn't moved to give the customers
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the sort of experience they were getting elsewhere.
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So, we had two real sorts of bit of pressure.
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Centrica is UK's largest oil and gas supplier,
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has a diverse set of businesses
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from lighting lamps in the centre of the city
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to energy storage, to connected home.
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As you think about large-scale transformation,
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what are the key peculiarities that you need to handle?
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So, the first big question is, what problem is it
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you're trying to fix within which strategic framework?
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So, when I joined Centrica in 2016,
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the strategy was very clear.
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You know, competitive in the energy market in the UK,
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competitive in the US energy market.
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But really seeing energy as being a future commodity
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and therefore more and more commoditized,
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so, the shift into being a services business.
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Therefore, you sort of found yourself at the heart of,
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this is now really about customer experience,
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because an energy and production business
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is a B to B business and therefore,
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we were starting to focus much, much more
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on the B to C business.
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What we had worked out was that in order to transform,
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you had to work out the transform from, to,
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right across the spectrum
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of people, process and tools.
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What were we really trying to be?
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It was very easy to say we want to be
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an energy services solutions company.
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But what did that really mean?
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So, when you're kicking off a transformation of this size,
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there are just hundreds of questions to answer
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as well as working out how you transform away from
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those things that you no longer want to be.
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Was there anything during this journey
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that was a surprise to you,
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the good or the bad, that then made you rethink
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the journey that you were taking?
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I think this, for me, was more about relearning lessons.
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So, I think like most of my colleagues, out there,
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who do transformation
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and (mumbles) large-scale complex changes,
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you're constantly relearning
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that whole point about having a unity of purpose,
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that single common end state that everybody lines up to.
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And I would say that I, consistently, have relearned that.
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Every time I think I've got everybody lined up
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and we're all heading in the same direction,
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I discover somebody is just starting to wander off.
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I have to go and collect them and bring them back
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to make sure that we're holding to that unity of purpose.
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So Richard, we talked about
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this whole starting of the transformation,
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so now that you are somewhere
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in the middle of the transformation,
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how has the transformation helped you compete better
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with the smaller, nimbler competitors in the market?
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We have delivered £395 million worth of
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efficiency savings over the last three years,
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which I think is quite significant.
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But we've also, in driving our digital journeys
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and the effort to move customers online,
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we started the process, we're taking about
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28 million voice calls a year,
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we were still very much an analogue style business.
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As of October 2019, we've removed six million phone calls
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from our service estate and we have more than doubled
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the number of digital online interactions.
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Most of our customers first interaction with us
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is online or digital web chat.
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So, we've shifted the customer experience.
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We're one of only two of the big six, right now,
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that is profitable.
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So, now if you go to the price comparison website,
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when I first joined the business we couldn't get on there
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at a price that made us any margin,
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now, we're operating at about number five
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on the price comparison website,
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and probably the top brand, but at number five.
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So, we're able to compete at price
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and with the quality and the brand
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of our service on offering.
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So, it's enabled us, really, to stay relevant
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and up to date.
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But we've another 18 months to go,
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so of course, we're into the hard yards now.
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And I'm convinced that we can be as good as
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the new (mumbles) of the market,
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in every department.
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And still offer a fantastic customer experience.
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So, Richard, as you think about this transformation
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and sharing the learnings to others,
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what are the key learnings that you would like to share
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if another large complex organisation, similar to yours,
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were to undertake this journey?
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Firstly, having a really clear change narrative,
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understanding what and why you're changing
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in such a way as you can bring the workforce with you.
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We have a very competitive market
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with government regulation
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and a requirement to stay relevant
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and a desire to move into services.
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So, a lot of the commercial drives were there.
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But, of course, in moving into digital
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and taking loads of calls out of the system,
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we were going to lose a load of our colleagues, on the way.
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And, so, we needed to ensure that our change narrative
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was well-understood across the business.
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And what was interesting for me,
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and this was actually, our employees are also customers,
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not just of us, but of everybody else,
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so, of course, they were waiting for us
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to say, "We need to shift digitally."
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'Cause they, almost, couldn't understand
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why we hadn't already gone.
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I also had to think about capability.
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So, one of the other big learnings for me, in this,
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was understanding the capability of the organisation,
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not just to be, in our case the digital player
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we wanted to be.
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Did we have those skills,
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where are we going to learn them from
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and can we therefore build those things
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that we're setting out to.
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And in one or two cases, we've discovered,
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that we've actually bitten off more than we can chew.
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That we've set out on a couples of programmes
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that are very hard for us to build
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and then, subsequently, to consume.
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And that would be the next point,
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about the ability to consume the change.
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So, you can very quickly build a muscle
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that says, "We're going to change."
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And you build a strong team
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and a great set of programme directors
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and project managers that are able to build the projects.
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The problem then comes when you actually
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have too much going on in the business to be able
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to consume the change and embed it.
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So, therefore the benefits, whether they're in pounds
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or processes or people or MPS,
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don't get realised 'cause you're struggling
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to consume the change you've built.
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So, there were a whole pile of lessons in that space
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that meant that we had to be really clear on our plan,
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really clear on our investments,
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really strong control.
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Everybody hates governance,
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but actually it's that medicine
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that you really need to take
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to make sure that the programmes all land.
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So, Richard, you were saying
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that the transformation journey is still ongoing
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and there's still about 18 to 24 months of transformation
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still left to go.
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So, what is still left undone?
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The biggest element is the digital shift, Deepak.
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So, I like that phrase
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and I'm not sure where I've stolen it from.
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But, "Build it and they will come."
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One of the things that you discover with our customer base
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and everybody's customer base is,
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you can build all these online journeys
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and implement web chat
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and, you know, SMSs and all the rest of it,
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but if your customers are used to calling you
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then it takes quite a lot of effort
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to shift the customers over
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onto this new infrastructure that you've built
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and make the customer experience,
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the wonderful customer experience, it needs to be.
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So, the bit that we've still got to do
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is that digital shift.
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Our customers are moving,
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our MPS scores in those customer journeys are improving.
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There's a bit of me wondering, when we're gonna declare
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that the transformation's complete
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because, of course, the customer is king
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and keeps wanting more
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and wants this more seamless journey.
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Richard, thank you, for finding time
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to share all these learnings with us.
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My pleasure, it's been a great partnership
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and I think it'll continue for some time.