We've all heard the adage "what gets measured, gets managed." But, it’s surprising how often I hear people ask how to know if you are measuring the right things. Which means…they aren’t even sure if they are working on the right things. For many organizations, measurement exists simply for the sake of measurement. And that's a key reason why so few organizations are able to achieve strategic success.
Early on in my career, I spent time with a major electric utility’s call center. The call center was festooned with banners proclaiming their "Customer First" strategy and employees were subjected to weekly "customer care" meetings and training sessions.
After a few months of the new strategy, the company did a survey of their customers to see if the new strategy was working. They found, to their surprise, that their customers remained as frustrated with their service as ever. In fact, some customers were even angrier -- because the customer service representative's script was updated to say that she cared -- but service levels remained low.
Digging into this issue, I learned that the company had implemented a new strategy -- customer care -- but had not changed the measurement system that they used for their customer service representatives. They still used a metric based on the number of calls an hour that the agent could process. What behavior did this motivate? Well, if someone called in with a particularly challenging issue, the CSR simply hung up on the caller. The result? Infuriated customers and disenchanted CSRs.
After talking with some of the CSRs, we proposed a very simple change to the measure that was used to grade them: instead of measuring them on their throughput (the calls per hour), why not instead measure them on their productivity (how many problems were resolved on the first call)?
This very small change in just one measure had a dramatic and lasting impact on the organization and led to numerous other follow-on initiatives that made the CSRs life better and the customers happy. By focusing on "problem solving," the CSRs asked for -- and received -- tools that could help them investigate problems on the spot, and authority to resolve smaller issues independently.
Over time, this organization became known for the quality of its customer service and the efficiency of its CSRs. But it wasn't the training and banners that made it work (although those did undoubtedly contribute in some way), it was a simple change in how people were evaluated that made all the difference.
The moral of this story? Be careful about what measures you choose, because the measures will drive behavior -- good and bad. And think about what the impact of an entire system of good measures could be: an entire organization focused and aligned on executing strategy -- making customers happy and achieving mission. That's just what a Balanced Scorecard helps you do.
Have you had successes with performance measures? Leave me a comment below!