Monday 2 February 2004

Standard Life

Some time ago I read an article about outsourcing - it may well have been by Peter Drucker who writes wisely on this topic. The message was that outsourcing is a very useful business tool but that an organisation should never outsource its core activity.

Standard Life is thinking about outsourcing its handling of complaints:

Standard Life said it is considering outsourcing the handling of "mis-selling" complaints from its endowment mortgage holders in an attempt to hit a strict deadline set by City watchdog the Financial Services Authority for dealing with complaints.
In my opinion that would be a grave mistake. Standard Life has suffered from a huge amount of adverse publicity over the last few years and especially in recent months. Restoring its good name should be the number one priority for Standard's executives. Such a task should not be outsourced and indeed I would suggest that all members of the organisation's top management spend a few hours each week manning the phones and speaking to real live customers. Regaining the members' trust is surely the core activity at the present time.

I believe that Standard Life should have been more wary of the very high stock market values that pertained a few years ago and it should have scaled back its exposure to equities at that time. I notice that Standard is now being criticised for selling shares when the market is "recovering". I'm not so sure. It seems to me that valuations are still far too high and Standard may well now be correct in at last reducing its exposure to the stock market.