Performance Perspectives

Author Archives: Bob Champagne

Metrics Don’t “Run” Without Targets

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What today’s metrics are missing…

Yesterday, I published a post on improving the value of metrics in managing the Social Media performance of individuals and businesses. The inspiration for writing that came from the recent flurry of posts from this week’s “eMetrics” conference, and my own reflection on whether the current approaches and tools (and some of the improvements that are emerging) were going to be effective in addressing the gaps that exist today.

I received some good feedback on that post, some from individuals like myself who struggle with these metrics and their relevance for ourselves and our clients, and others from vendors simply trying to inform me that some of the gaps I was observing were not as significant as I might have been suggesting (perhaps a fair assessment).

I talked a lot yesterday about choosing the “right metrics”, and remain convinced that “metrics” are certainly an important piece of the equation. Choosing the wrong metrics can send you in the wrong direction quickly. And nowhere is that more visible than in the stampede toward maximizing performance on what I’ll call the  “generally accepted” set of  KPI’s. You all know what those are. And from my comments yesterday, you also know the dangers I see in all of us gravitating to the same “common denominator” even though we recognize that an infinite array of unique objectives exists.

Targets – The “forgotten sibling” of metrics

As I spent a little time reflecting on all of this, it became clear to me that the main area that needs addressing may not be the actual metrics themselves, but rather  making the metrics, and especially the targets, more relevant to the area being managed. And this is a problem that faces all businesses, both within and outside of Social Media space. So, today, I am going to focus on that part of a business metric that “completes it”, the TARGET itself: How it is set, challenged, managed, and delivered upon.

You might be saying to yourself that ‘setting targets should be a relatively simple and easy process’. Well, for some, the steps may be simple, but executing the process consistently is far from it. Companies and individuals are constantly asking  the question “where and how high” they should set the bar?” To answer that question involves some good introspection and analysis. And to do that well, you often need good information and benchmarks on which to base those decisions. But most importantly, it takes knowledge and awareness of what a “target” is, the role it plays in the performance improvement cycle, and the process by which targets should be established, vetted, and updated.

A real blind spot for many…

It’s truly amazing that, amidst all of the data tracking and information that surround us, so little time is actually paid to thinking about, and establishing THE TARGET . What good is measuring something if you don’t know whether you should be shooting for 10, 50, or 5000? So it’s hard to imagine performance tracking and management adding any real value without accompanying targets.

Yet that is exactly what is taking place – not only inside of Social Media, but industry in general. When I am helping a client implement a corporate performance management system or process, a key part of that engagement is often inventorying and improving the KPI’s and business metrics that should be currently “fueling” that process. As part of that step, I am naturally going to be asking what their aspirations, goals, and targets are for their specific metrics and KPI’s.

But more often than not, when I do ask that question, I get blank stares. Sometimes, if I’m lucky, I’ll get an answer like “to get better” (which may be a “broad goal” but far from a “target”). I ascribe this not to corporate ignorance (some of these companies are pretty big and reasonably successful in their market), but rather a failure of leadership to translate and cascade their broad goals or macro level targets for the “company level KPI’s”, into more actionable targets at the operating level.

But whatever the reason, using metrics without targets is about as helpful as using GPS navigation without a programmed destination. And in the absence of targets, the best you’ll get is mindless (and often costly) tracking of statistics, and if you’re lucky, some backward-looking trends. What you won’t get is a point of reference for evaluating success, and little ability to correlate success with the deployment of new strategies or initiatives. And in the end, aren’t those the ultimate goals of our performance measurement and improvement activities?

The 3 R’s of good target setting…

As you set up your process and routine for better “target setting” (which should take place both in the planning and review cycles of your business), you’ll want to pay real close attention to what I call the “3 R’s” of target setting. Those include making your targets:

  • Real – By “real”, I mean a genuine, thought through, meaningful number, based on both data and introspection. To “improve from last year” or to “get better by x percent” is not a real target, but merely a statement of an aspiration or goal. Shoot for a specific number and be able to say why you chose it. The more genuine and real the target is, the better you will be able to articulate it in your leadership narrative , and the stronger your ongoing performance dialogue and problem solving will become as an organization.
  • Relevant- By relevant, I mean both contextually relevant, and realistic. And this is always unique to, and highly dependent on  the business, work unit, or individual being measured. In fact, in my view, this is the number one breakdown in social media metrics in that there is often no connection between a company or individual goal (THEIR unique objective) and the target they are using for their metrics tracking, be it a follow count, an engagement score, or a Klout measure. The use of each of  these measures can carry very different implications depending on the specific user objective at play, just as a business indicator would be across two different industries or segments of the company. I’d like to see a scenario in which users of SM statistics could articulate a set of aspirations (type of influencer, specific industry or niche, and maybe size of market–(and I’m still noodling with this obviously)), and the tool or technology that would help them select a unique target range to achieve that objective. (For example, a follow count target of “a”, Klout score target of “b”, engagement score target of “c”, and velocity score target of “d”). The point is to try and align the measure to the context being managed. How you get there, whether though “normalizing the data”, or simply making informed judgments, is less important than making sure the context differences are reflected.
  • Robust- Robustness means testing the target against what should be possible in terms of improvement. Often, this is the role that performance benchmarking can and should play in the process, assuming it’s done right and you’ve normalized somewhat to make the comparisons relevant. Benchmarks can tell you if you’re in the right ballpark. But it goes beyond simple benchmarks in evaluating the robustness of a target. I often find that a formal set of internal challenges to the targets makes a lot of sense. While it’s got to be a safe and constructive process to work effectively, a good challenge would ‘sniff out’ a target that passes a benchmark test, but would identify, as well, areas in which there may exist considerably more opportunity (i.e., the target is insufficiently aspirational). Or it could challenge areas in which the metric could be “gamed”.

Here’s a sports example. Suppose you’re a golfer, and you want to bring down your score, and one of the metrics you elect to track is the percentage of “greens hit in regulation” (i.e., you’ve gotten to the green within par allowing for 2 putts after the green is reached). At first you say you want to “improve” from your baseline of 60%, but that really doesn’t reflect any quality thinking about improvement potential. After refining your thinking, however, you decide that 65% would be a good target (That’s REAL). You then do some benchmarking and find that an average benchmark would suggest that a good target is 50%. But after normalizing for ‘those better than a  5 handicap’ (which in this example may be your strategic goal), a more relevant target might be 70% (That’s RELEVANT). But after challenging that, and looking at your trend, and the way you’ve been hitting lately, you may conclude that going from 60 to 70% is too shallow an aspiration (in fact you may have already achieved that, not on average, but certainly in your last 3 rounds), so you elect to go with the benchmark of the “top quartile” of those 5 handicappers on “their” GIR performance and shoot for 75% instead (That’s ROBUST).

So next time you review your metrics, don’t forget the importance of having targets, and making sure they meet the 3R’s test of quality.

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

What a good preacher can teach us about accountability…

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iPads, Insomnia, and Podcasts…

Sometimes, when I have trouble sleeping, I will find a good podcast or ‘sirius talk’ channel that looks interesting, and let the drone of the narrator “read me to sleep”.

I don’t know what it is about “talk radio” or short podcast subjects that do the trick for me (instead of music, for example), because some of the topics are really interesting and engaging and would keep most normal people “awake” rather then send them off to sleep. But not for me. 30 Minutes into one of these podcasts or talk shows, and I’m out like a light.

Who Knows. This phenomena probably has to do more with our childhoods, when we were “put to sleep” by our parents reading us  a good story book, than it does the level of topical ‘engagement’ of the content itself. But that’s a subject for another day, or perhaps my therapist.

Now, sometimes when you download a podcast, there is not too much background available on the host, but that usually doesn’t bother me because the vast majority of them on itunes are pretty much free. So, if it’s a bad one, so be it- it’s still usually enough to put me to sleep through the sheer value of their mindless droning. Last night could have been one of those nights.

Last night, however was about the content. I found a podcast dealing with the topic of “personal change”, something near and dear to me because so much of the consulting work I do involves cultural alignment, behavioral change and leadership skills. Invariably, all of those are in some way dependent on PERSONAL change, often of significant magnitude.

Rapture, repentance, and judgment day…

As the podcast opened,however, it was clear that I was in for a surprise. While the topic was “personal change” (which we all know can span a broad array of angles), this one had what one might call a “spiritual bent” to it, which clearly was not evident by the podcast icon and description.

Although it was not what I was expecting, I did listen on. After all, who can’t resist a little advice from a good “preacher man”!

As I am fading off to sleep amidst his messages of raptures, repentance and judgments, the word “ACCOUNTABILITY” popped out of my ear buds like a shot in the dark. And while it probably was his intention to pique my interest will all of his other words of prophetic wisdom, it was the word “accountability ” that hooked me.

Now, if God is reading this, I don’t mean to say that I didn’t internalize ALL of the other parts of the sermon. I LISTENED TO ALL OF IT!!!” It’s just that the subject of accountability is one that I have been working with many of my clients on currently, and so the mere mention of the topic grabbed my attention just A LITTLE more than the “end of days” stuff. But that was for one instant, until I returned to the rest of the sermon, at which point I paid perfect attention. (Ok- bases covered with God- check.)

What “The Preacher” says about accountability…

Good preachers have a few things in common. One, they are charismatic speakers. Two, they are usually great storytellers. And three, they have an uncanny ability to translate complex principles into very simple messages. So what was his simple message on the subject of accountability? Just tell someone!!

That’s right, tell someone. Such a simple act. Yet such powerful implications. Here was his four step process to accountability:

  • Make a decision to make a commitment
  • Set a goal
  • Write it down
  • And tell someone

Now before you conclude that it’s not that simple (and I am not suggesting it is), just think about this in various facets of your personal, spiritual and work life. Heck, think about something as simple as exercise and weight loss (yet another topic close to my heart- literally!). I know for me, the only time I take that seriously is when I do in fact ‘tell someone’. I don’t know exactly why that works, but it does. Probably, it has something to do with someone else “watching”. Or perhaps it is because you feel a commitment beyond just yourself. Whatever the reason, I find that it works.

It also works in other areas of my life. When I commit something verbally to my kids, it means more than just a superficial personal “intent”. Same with my spouse. And truth be told, as a “good Catholic” (subject to debate, I suppose), when I make a confession to a priest, I take the commitment of “doing better next time” more to heart, than if I just made that same commitment to myself in passing.

I think”writing it down” certainly helps too, since it is now part  of “recorded history”, and something you can go back to and look at. It becomes tangible.

Livin’ “The Gospel” in business!!!

Even if it’s just inside your own sandbox…

As I think about this in a business context, specifically with respect to performance improvement, it all makes sense, doesn’t it? I can’t tell you how many times those “personal change “rock-stars” (from Carnegie  to Covey) have preached these same principles in their books on ‘achieving success’, ‘positive thinking’, and the broad array of topics they wax so eloquently on. And no doubt, every consultant (including your’s truly) has developed some methodology for driving accountability and change that include these basic four steps in some way, shape, or form.

I know many of you are working on driving accountability into your business cultures, and have one point or another, been involved in that type of multi step, multi phase, “journey of change” that was no doubt complex. And for many of you, some level of reward was received from those efforts. Change management programs do work, and with good leadership commitment, can really mobilize and cement long term improvements to a results oriented and highly accountable culture across the business.

But there are other times, when a manager just wants to simply motivate an employee, change the attitude of a team member, or the shift culture within a small workgroup. But instead of moving ahead in their little “patch of turf”, they often get caught up in the narrative of “it’s all about leadership” and the inability to change things from within unless “the top dogs” are behind it. That’s unfortunate, because change can happen in small pieces if the managers of those parts of the business understand the simple behaviors required to catalyze that change.

So before you conclude that reaching an new or ambitious goal is not achievable with your current team and cultural environment, give the preacher man a chance, and try out his 4 steps. Make the commitment. Set a goal. Write it down. And tell someone.

Then come back in a few weeks and see if anything has changed. You might surprise yourself!

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

SM Metrics- Getting beyond followers, klout, and social butterflies!

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More Metrics Insights- Really? Haven’t we had enough?

I’ve been following all the “buzz” over the past week from #SXSW and now #eMetrics regarding the development, reporting and use of “metrics” in Social Media (SM) space. Quite interesting dialogue to say the least.

For some of you, particularly those who don’t live and breath Social Media, all of this may have turned into “white noise”, as this weekend appears to have exhausted just about every angle on the subject of SM metrics that we could possibly explore. But  fear not! As another week kicks into gear, there will no doubt emerge a new wave of posts and blogs on the very same topic.

But I must admit, that all of this “metrics talk” does strike a chord with me. After all, having spent nearly two decades in helping company leaders and managers get their arms around business metrics, and the broader discipline of performance management, you would expect my ears to jump up at the word “metrics”! (I know…sad but true). And while SM is not an area I have spent an enormous amount of time studying or participating in from “the inside”, I am finding that many of the same principles I use with my “corporate clients” and  very much “in play” for this new and ever evolving market.

Stepping outside my “sandbox” …

While my life does not revolve around advances in SM, I have become what one might call a “steady  user” of it. From my evening “blogging” hour, to ongoing “check-ins” via Twitter, Facebook and LinkedIn; I would confess to spending at least 10-15% of my ‘awake time’ interacting with online friends and colleagues.

Of course, like many of you, Social Media (which for me includes my morning time with my Pulse reader scanning news and blogs that I monitor) has replaced the time I spend reading newspapers, magazines and “industry rags” (in fact it’s become much a more efficient medium saving me lots of time and energy). And those ongoing “check ins” that I initiate, usually occur when I am either ” restricted” (cabs, airports, etc.), between tasks, or otherwise indisposed (I won’t elaborate on the latter- you get the idea).But the “blogging hour”… that is something separate for me, and while I do enjoy it and it helps me unwind, I also recognize it for what it is- a personal and professional investment in my own development.  So yes, you could say that SM should be important simply because of the 15% percent of my day that I rely on it for.

But for me, it goes a little beyond that, especially now that the conversation has turned to metrics, and the broader issue of managing SM performance and results. Ever since I got into the Performance Management discipline years ago, I’ve been a strong believer and proponent of finding ideas and insights, wherever they occur (different companies, different industries, different geographies, etc.), and applying insights to current challenges within our own environments. Some would call this “benchmarking”. Others may call it good learning practices. For me, it’s not only common business sense, but a core set of principles that I live and manage by. And for many like me, it is the basis of any good Performance Management system.

So it’s only natural for me to observe what’s going on in this space and try to open some good “cross dialogue” on how we can lift the overall cause that I know we all are pursuing: More effective measurement, better management of performance, and stronger results.

Exploring “Best Practices” In SM Performance Measurement…

A few weeks back I published a post on what businesses outside of SM space could learn from what is happening within SM. Many of you found that useful, although I must admit that it was the first time that I really began experimenting with what was available out there in terms of thinking andtools. But rather than focusing on the tools, I tried to explore some of the bigger themes that were emerging in terms of practices and approaches, and attempted to determine which aspects of that thinking in SM might be be “import-able” by other sectors as “lessons learned”.

Today, I want to ‘flip the tables’ a bit, and talk about what other industries can teach Social Media about the art of measuring, improving, and delivering on our individual goals and aspirations.

I was inspired to go this direction by a number of posts over the weekend that appeared to delve into the same question (here’s an example regarding the measurement issues with Klout) When I read that, it sounded like some good stuff, I realized that this was really  the tip of the iceberg on a really important issue. So expanding on this seemed to be the next logical step.

So what Can SM Learn From Others?

The below observations are based on merely a snapshot of what I see taking place now, and fully realize that dialogue is occurring at this very minute in certain hotel bars and restaurants on this very topic. My goal is not to suggest an exhaustive list of “fix it now’s”, but rather to open an ongoing dialogue on what we can learn and apply in our individual areas of expertise.

  • Is what we’re measuring today meaningful?

OK, let’s get some basics out of the way, at the risk of boring (or offending) some of the social media pundits and ‘real experts’ out there. For most users (consumers of Social Media)- the everyday user of Facebook, LinkedIn, and Twitter, for example- the answer to ‘whether or not SM measures are meaningful ?’ is “probably not”. Save for ego and vanity, measurement of things like the number of “digital friends” (Facebook friend counts and Twitter followers for example) mean very little to the nature of managing meaningful relationships- whether it is in maintaining existing ones, or growing new ones. Meaningful relationships go way beyond these surface level statistics.

Of course, there are those individuals and businesses who do use, and rely heavily on, more in depth statistics for tracking their progress. So I believe at least some of them would say “yes- meaningful…but with a lot left to be desired”. The stats and measures are there. Are they meaningful and value adding to the business? Subject to debate.

What we can be certain of, is that things like Follower counts, Klout scores, Retweets, and Click-through’s are measures that are becoming less and less valuable, and that there is a deep yearning for more. Whether this takes the form of refining what’s in the algorithms and “black boxes” , or a major rethinking of the metrics themselves (which would be my vote), still appears to be a subject of great debate.

  • For the sake of what?

When you walk into a large company that “manages by the numbers” (and trust me, many don’t), you see that there are literally hundreds, if not thousands of things they are tracking. Some are real meaningful, and some are as useless as an “asshole on your elbow” (I heard that one from a old (and wise) plant manager in Texas, and have been waiting months to use it- hope I didn’t offend :)

When I see that level of measurement/ quantity of metrics, a little “warning sound” goes off in my head and I start exploring the question: “For the sake of what?” are you measuring this or that? I use a variety of techniques to get them to tell me how they are going to use a certain metric (most often the question of “why?” asked repetitively works best), but often the question is rhetorical because there is no answer. I once heard someone say, “If you want to see if information is valuable, just stop sending out the report and see if anyone screams!”.

Fact is, if a measure doesn’t have a causal link to some major result area, or worse, if the person managing it cannot see that link, the metric serves no purpose other than to consume cost. Most of the tools I see in SM space for tracking metrics simply  report stats with no obvious linkage to any real outcome. Even if something like # followers was important (and we all know that most often it ranks pretty low), there is no clear path evident in the reports on how the stats actually impact an outcome that is important to the user (other than loose descriptions and definitions at best).

Yet, we all know that the tools and models for establishing those linkages exist everywhere. Just look at some of the basic tools used by stock traders. While they are not perfect by a long shot, “technicals” like Stochastics, Bollinger Bands, and simple breakout patterns, have clear paths to a high probability event or outcome, yet are available to even the most amateur  investor. Even “stogy” old Utility companies can draw connections between things like permit rates, new connection activity and downstream staffing requirements. I’m not suggesting it’s easy, just that it’s important and that the tools are there to execute and simplify.

  • Who really cares?

For me, this is the MOST IMPORTANT item on the list. Most of us have seen the Klout site, Twitalyzer, and the myriad of other tools out there to support the development of personal networks. These tools are extremely useful, and possess a wealth of information if you have the time and stamina to think about what it all means. I mean, come on… to have 25 metrics on one page with trends only one click away is something that a real metrics guy can only look at and say “WAY COOL”. Seriously, very cool! That’s the good news.

The bad news is that it’s the same news for everyone. But we all know the dangers of “one size fits all”. I’m not diminishing the value these tools provide. SM would be lost without them. And in their defense, certain sites like Twitalyzer and Klout have gone beyond the simple dashboards and have incorporated categories that many aspire to, and have begun to draw some connection between these aspirations and those broad categories.

But it’s just a start (I mean come on…Are  any Twitter users actually aspiring to be “social butterflies”? (ok, don’t answer that, because they’re probably some who do!) Perhaps a better question is whether a “social butterfly ” would ever aspire to be a “thought leader” ? My point is that it’s probably not a linear sequence of development, and while these categories get us one step closer to aligning measures with goals, they are still missing 2 things:

1) Better understanding of the goals of users (its probably more than 4 and less than 100) and

2) a guidance system that helps one use the metrics to achieve those goals.

So here’s a thought…What about a simple interface that allows you to pick a goal, and then tells you which metrics you should care about and what the target should be to accelerate within that goal class? You’d be building a model that would clearly feed on itself. I’d be surprised if the BI guru’s out there don’t already have this built into their corporate BI suites and Web Analytics tools, but it would seem to me to be a great draw for the myriad of other users with goals that extend beyond butterflies and mindless follower counts.

Find out what’s important, at as customized a level as you can (and is practical), and tell us how to get there. That’s the “holy grail” in every business, and what every CEO is and Executive is craving from its performance management process – “I’ll tell you what my strategic goal/ ambition is,…and you tell me what the metrics AND targets are  that will help me get there,… and then help me  track my progress!”

  • Can tools help? (and how?)

Absolutely and without question, the answer is yes. But just as other businesses and industries have jumped too quickly, often placing ‘technology before process’, so has SM in my view. Part of this is because of how the industry is “wired”, and how it has evolved. Born through technology, and managed and staffed with a heavy technology bent, it’s not surprising that we’ve reached a point where the data has become king, UI’s have a lot to be desired.

I’m not talking about the ease of navigation, the placement of charts, or the rendering of drill down information. I’m talking about how the user (the customer) thinks…starting with their goals, and accessing the relevant metrics to show progress and critical actions they need to take to improve. I suspect the developer who can “visualize” (to use an overused term in today’s SM environment) that kind of “line of sight” will ultimately win the hearts of its users.

The other role technology can play is enabling the algorithms and models that are required to deploy the kind of “mass customized”/ goals oriented solution I described above. Without these tools, the likelihood of being able to normalize, analyze and model these relationships would be impossible. So in my view, the tools are critical, but the effort first needs to be on the process (getting the line of sight understood) and then working the raw data in a way that renders it in a context-specific visualization. That’s in a perfect world- but it’s still a good aspiration.

Like I said, these are just the things that are ‘top of mind’ for me at the moment, and only informed by the lens through which “Bob” is looking. I’m sure some of these issues are top of mind for you too, and you may actually be unveiling (right now) that new “holy grail” subscription site  that has the answers. If so, great…I may be your perfect customer. But if the last two decades have taught me anything, it is that different perspectives and different lenses often pose new questions and spark new crystal balling that lifts the entire game.

Of course I welcome any comments and expansion on the above list. As I said earlier, this is just the beginning of my own thinking, inspired in part by some of yours. I look forward to more of yours!

PS- For anyone who is interested in Performance Management and Metrics topics outside of the world of SM, feel free to bookmark http://EPMEdge.com

Links to some of my more recent posts on these subjects are provided below

Incorporating the principle of “line of sight” into your performance measurement and management program

Managing through the “rear view mirror”- a dangerous path for any business

Data, information and metrics: Are we better off than we were 4 years ago?

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

Managing Through The “Rear View Mirror”…a dangerous practice for any business!

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You’d never drive only looking backwards…

Would you?

…Only if it’s a straight road, no traffic, and blue skies ahead; and even then, it’d be pretty dangerous and ill advised. But on any other road, doing that would almost certainly spell disaster.

It’s the same in business. And while it may sound like common sense, it’s amazing how many executives and operating managers are doing just that by the way they operate their performance management process.

Defining the metrics that guide your journey…

Over the past few decades, I’ve worked with hundreds of organizations to help drive their business improvement through the smart application of  performance measurement and management practices. This work has literally run the gamut, from showing them how to use relevant benchmarks to supporting them in their target setting, to literally ripping apart and reconstructing their scorecards and dashboards.

While there are a lot of other facets to good performance management (many of which I discuss on this blog)- from establishing “line of sight” between corporate strategies and operating activities, to better integrating stakeholders within the EPM process (IT, HR, Finance et al)- the area in which my clients have had the highest impact still lies in the basic practice of measurement: that is, selecting the right measures to track, and committing to effective reporting and tracking of those indicators. Yes it’s still true…What gets measured gets managed!

But some of us are still driving backwards…

I’ve worked for so long in the measurement arena, that it has almost become second nature to me, as it has for many companies who do it well. But every now and then, I’ll read a post or an article that reminds me of just how shallow some of the thinking still is in this arena, and the degree to which many businesses still underestimate or undervalue the importance of this basic tenet of Performance Management. So I thought I’d use a little space here to refresh us all  on how important the “measurement part” really is, and offer some perspectives that can help lift our “collective game” a bit.

Let’s start by looking at why we measure things. There are a myriad of factors that drive us to select a performance metric and start tracking it.

Unfortunately, as an industry, we seem to have gotten stuck on just measuring results and outcomes. More than likely, that is because those are the things we see most often on our company’s Balanced Scorecard. So our first instinctive reaction at the business unit level is to simply expand on those by adding a few lower level supporting indicators, or finding better ways to visualize the reporting (via dimensional slicing and dicing of those results metrics over various time periods, geographic areas, product lines, etc.).

But only focusing on results and outcomes is what I call “managing in the rear-view mirror”.

Getting your eyes back on the road…

Granted, over the past few years, there’s been a lot more discussion around “leading and lagging” indicators, and some companies have gained decent ground in this area. But even that area has gotten blurred, and few companies have really been able to define the types of causality linkages that are required to extract any value from these distinctions.

Often, when I look at business unit performance reports, I see things that are “labled” leading indicators. But rather than being truly predictive in nature, they are simply portraying the result of some other process that comes before “theirs”. I would acknowledge that some lagging indicators can, in fact, be leading indicators for some other process, and vice versa, but the more time I spend studying the interplay between measures inside of the broader corporate environment, the more it looks like “spaghetti thrown against a wall”, than it does a deliberate effort to define and draw clear connections and dependencies in performance and define the real performance dynamics at play.

Take full advantage of your peripheral vision…

A few years ago, I defined a simple framework to help clients think through this at a fairly basic level. But instead of focusing on whether an indicator was “leading or lagging”, I focused on how the measure was going to be used, and what kind of performance dialogue would be initiated by tracking that metric.

The framework involves looking at your performance more holistically by focusing on five “uses” for a particular metric. I’ll use a Customer Service example, but these areas could be applied to any business unit, or the enterprise as a whole.

  • Planning Metrics – These are the kind of metrics that help in your planning of workload and resources. There are two types of planning metrics: Those that help you see trends and variability by observing historical transaction volumes and variances; and those that are more predictive in nature (truly leading indicators) that help anticipate future trends (things like growth in particular segments, campaign “take rates”, trends in workforce demographics and attrition, etc.)
  • Alignment Metrics– Those measures that will help you gauge the level of alignment and commitment of your team to your operating plans and strategies. While you might not measure all of these with high frequency, they are essential beacons to look at periodically (at minimum, quarterly or annually), with focus on both plan variance and external benchmarks. These may include things like employee satisfaction and alignment, as well as trends in attendance and employee availability.
  • Operating Metrics– These metrics are analogous to what a pilot might use in the cockpit of an aircraft (e.g.- airspeed, altitude, etc.) Here, you are simply trying to keep these metrics within specified tolerances or control limits, so that any deviation in these can be quickly observed and corrected “on the spot.” Frequency is this area is often vital, with “real time” information being the desired level of reporting.
  • Improvement Metrics-Those metrics that you will review (with perhaps less frequency (daily, weekly, monthly) to show both changes in operating performance trends, as well as the drivers of departmental results. You will use these to review, diagnose and problem solve. And they will become the basis for your ongoing continuous improvement projects. This area is usually where result or outcome measures show up, even though these metrics can also be used in planning stages. Things like Customer Satisfaction, Complaint Volume, First Contact Resolution, and Employee Productivity would fall into this category.
  • Sustainability Metrics– While these measures may also be utilized in your planning phase, they mostly relate to those things that you are doing from a strategy perspective in shaping your long term vision for your department or organization. Driving major behavioral shifts in customer channel usage (paperless billing, mobile payments, online conversions, etc.) as well as overall customer engagement are the most common measures in this space.

There are clearly a lot of ways to look at your portfolio of measures to ensure you’ve got complete coverage. For example, some companies have success by categorizing their measures by reporting frequency, or the venue in which the metric will be discussed. But I find that understanding the stage in which the measure will be used, is equally important in ensuring you’ve got all bases covered.

While it may sound like I am contradicting the “balanced scorecard” principles to some degree by focusing on such a broad array of measures, I feel it is actually quite complementary to it. Not everything we look at is a KEY performance indicator (KPI) that would reside in your balanced scorecard. In fact, many of them won’t show up there initially. At the same time, however, I feel that some companies have gotten so “fixated” on the orthodox application of their Balanced Scorecard (in its most simplistic interpretation), that they have forgotten the many uses that metrics have in planning, managing, improving and sustaining performance.

Let’s plan a safer journey next time!

The good news is that most of you are already tracking, or are planning to track many of the metrics I mention above. At the same time, however, the manner in which these measures are tracked, reported, and utilized is most often viewed as “one size fits all”. That is, many of us will end up tracking these metrics with similar frequencies, reporting them to the same audience, discussing them in similar venues, and managing them in the same way we have always managed them.

As you move forward, I challenge you to think about your performance metrics, both holistically (do you have all bases covered?), and within their own discrete contexts for how they should be utilized and managed.

Oh, and one more thing…NO more reviewing your performance results on your iphone or ipad when you’re behind the wheel. That would likely negate any improvement gains we make in gaining back our peripheral vision (or as Stephen Wright the comedian like to call it, the  “peripheral visionary”).

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

“Lagniappe”- And its impact on customer satisfaction…

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The Principle of “Lagniappe”…

Being a native of New Orleans, I have always been accustomed to the term “lagniappe”. For those of you who don’t reside in the deep south, lagniappe is a cajun term used to describe the “little bit extra” someone gives you as their way of saying “thanks” and/or expressing their gratitude and generosity.

And today being Mardi Gras in New Orleans, I can tell you, there will be a lot of “lagniappe” to go around, from extra servings of  gumbo and king cake, to the myriad of beads, cups, dabloons and  other “freebies” that are thrown to the crowds from the parade floats.

Yes, the concept of lagniappe is still quite unique and special to those who live day to day in the New Orleans culture. It is special mainly because it is so rare to see it applied these days, largely because of the many who view this concept as “over servicing the customer” and an unnecessary gesture that could hurt profitability.

Lagniappe- As seen through the eyes of  Purple Goldfish…

A few days ago, I stumbled on a twitter post by Stan Phelps that referenced the concept of lagniappe as it related to marketing and customer service. My interest was piqued for two reasons. First, it was nice to hear the term since I rarely, if ever, hear the term used outside of Louisiana. But more importantly, it reminded me of the “balancing act” that is essential when applying the “lagniappe” mentality inside a business.

On Stan’s blog, there is a  recent post relating to his “purple goldfish project”, an effort to collect the many examples of “lagniappe” experienced by their readers. And there are some great examples starting to emerge if you take the time to read through the comments and entries. What a great idea to expose those companies who do in fact understand the value of great service and going that “extra mile”! There are so many posts lately on the “bad experiences” (see my recent rant on CS storefronts), that it’s refreshing to see the other side of the coin every now and then. So I really applaud Stan for getting that project going. Great stuff.

Lagniappe versus the Almighty Dollar..

Although I am a native of New Orleans, and lived there for nearly 35 years, living in the Northeast for the last 13  has tempered my views on the topic a bit. While I still value and cherish “lagniappe” when I experience it as a customer, I am now more keenly aware what it can sometimes do to the cost side of the equation. Any time I consult to a Customer Service or Marketing Executive, I am always working to find the optimal balance where good service and profitability meet.

If we think about this balance, it’s helpful to acknowledge the two very polar ends of the spectrum that are often at play- The Customer Service and Marketing folks, who view their primary goal as Customer Satisfaction, and who will do “what it takes” to earn it. And the Finance side of the business who view every investment in CS as a highly discretionary investment that, while perhaps necessary in the long haul, will have negative impact on short term profitability.

Of course, few of us operate on either end of that spectrum. Marketing and CS Executives are rarely that pollyanna when it comes to “satisfaction at all costs” , and Finance Executives  are rarely that blind to customer dynamics.But the underlying biases are certainly there at some level. And anytime I hear discussion of going beyond a customer expectation, my “antennas” go up almost instinctively until I can see that a balance is present.

It’s all about Exceeding Expectations…Isn’t it?

Well that depends.

For starters, let’s look at what we mean by “exceeding expectations”. There are many ways to exceed expectations. We can exceed the customers expectation through the product itself. We can exceed their expectations on how the product is sold and delivered. We can exceed expectations on what happens after a complaint. The list goes on….In fact, the “Purple Goldfish” project has good examples emerging of all fronts.

However, while “exceeding expectations” on any one of those dimensions will generally score you points in short term satisfaction, it’s doing it in ALL of the zones that will generate “sustainable” levels  satisfaction and loyalty over the long haul.

For me, all of the dimensions I reference above can be summarized into two broad categories, either of which we are capable of delivering on effectively (by meeting or exceeding expectations) or poorly (by failing to deliver). These are:

  • The  PRODUCT ITSELF (or service) that is purchased- With respect to physical products, this generally deals with quality (does it work consistently without failure?). But with softer products or services, it could be the quantity provided ( for many, lagniappe is  that extra helping or side dish you get with your meal at a restaurant), or a “feature” that you’ve grown to expect in the core product (In flight entertainment, availability  and features of your bank’s ATM, Lobby services provided.)
  • The SERVICE EXPERIENCE (in terms of delivery/ and follow up support)- Here I’m referring largely HOW the service is delivered. It’s HOW you are handled by the sales, service staff, or even the automated channels when you interact with them. This could be during the sale itself, during the account set up phase, as part of a general inquiry or bill payment, or as a follow up to a complaint. For these purposes, I view service as “how the product is delivered“- before, during, and after the sale.

Winning with “lagniappe”…

As the chart below shows, a strategy to exceed expectation on any one of those dimensions, while failing to do the same on the other is a pretty quick recipe for trouble. The below chart shows the range of customer experiences (from below to above expectations) on each of these two dimensions (Product on the horizontal, and the delivery/ “Service” experience on the vertical).

Starting in the bottom left quadrant, few of us would argue that failing on both dimensions is a clear path to customer satisfaction HELL. While its a painful way to go, it’s often quick, unless you’re in a protected monopoly or some other type of “controlled market” that will prolong the agony. Assuming the product concept is good, and  it has a decent enough business model, someone may actually step in to acquire and/or turnaround the business. But short of that, the days are numbered for companies that live in this space. Utilities and  Municipal Services providers can often fall into this category because of their largely protected monopoly environment, although there are exceptions.

On the other end of the spectrum (top right) are clearly the “winners” in this game, the ones who are generating and sustaining high levels of customer satisfaction and delight. Great product. Great service. Interestingly, in more cases than not, they also have lower cost structures for servicing since good products and good first time service resolution actually results in fewer required interactions. The investment up front in product design and development of a strong service process has paid off. Apple is a great example of a company in this arena. The core product is well designed and it works without fail. It’s easy to set up, use and it rarely breaks. The service, wherever it is provided- store, call center, self help, etc…always surpasses my expectations.

(click to view full size)

And while, it’s not the “holy grail” on the chart above, operating in the cross hairs (“core players”) can actually be a pretty safe place to play. It won’t earn you much in the way of lagniappe or high levels of customer “delight”, but there is something to be said for consistently meeting both expectations ALL THE TIME. Customers value that more than we often think. Look no further than Southwest Airlines and McDonald’s for examples in this domain.

Being one dimensional often means trouble…

As with most things, failing to have a balance usually spells trouble downstream. The same is true here.

Companies in the lower right, are those who have a great product, but fail miserably on the service side. Interestingly, many of the quasi competitive utilities like Cable and Cell Providers operate in this space. Their service rarely goes out, and most of the time is truly fantastic (above expectation). But the sign up processes, inquiry resolution, and in store interactions are often pure hell. Auto companies (operating through a dealer network that varies in its performance levels) can also fall into this category.

The trouble here is threefold. First, bad service usually creates a spiral of its own spending (how many times have you had to call a second or third time to get resolution?) Second, whatever gain you got by having a great product, is at best neutralized because of the poor service. And third, given a way to get the same product somewhere else (think bad car deal experience), you’ll take it. Barriers to switch (for example, it’s not easy to mentally “uproot your TV and cable system” after you’ve gotten used to it) can certainly delay the defection. But when those barriers go away (e.g. time for a new car lease?), it’s a whole different story.

That all notwithstanding, I think the most interesting quadrant is upper left. Here lie the companies that are trying so hard, often spending out the wazoo to essentially buy their way to a desired  satisfaction level. You know the types- the incessant stream of discounts, give aways, apologies, follow ups, etc… that occur on the heals of buying a poor product or service and failing to have even your most basic expectations met. Nothing ticks me off more than someone “begging” for a survey score (sometimes overtly), knowing full well that you aren’t satisfied.  Its easy in this area for costs to spiral out of control because you’re fighting a losing battle from the start. Until the core service is delivered, the customer doesn’t (and shouldn’t) care about anything else. This is the one quadrant where lagniappe can in fact hurt more than it helps. Hotels that give me free cookies won’t earn my satisfaction if my bed is uncomfortable or my room is subpar. A happy stewardess does nothing for me if the inflight entertainment is down on a 10 hour flight. And an apology or free drink coupon does not help much if my flight is delayed because of a mechanical problem on a plane that has been sitting there overnight!

Get to the crosshairs, THEN move from there…

If I had to give advice to a company, it would be to first get to basic levels of expectations on both dimensions. Then worry about the lagniappe.

Define what your core product is. Go beyond just the basic product to all the things that customers expect about the service or product they’re buying. What’s your equivalent to the in flight entertainment system? or the TD bank coin counting machine? or the Chase check deposit feature (by capturing image on your phone)? even you’re pricing and rate structure/ plan options?  These are the things that have brought customers to you. And they must work flawlessly just to meet expectations. Introducing new features and tools will do nothing if they either dont work, or are layered onto a poorly functioning base product

Do the same for your service offering and channels. Don’t embed a new self service channel, or new IVR if your underlying process still has major flaws. There’s nothing worse than getting stuck in a 7 layer IVR system, until you recognize that the analog process wasn’t much better. These kind of things speak volumes about the nature of your underlying process and service infrastructure. Same goes for those new kiosks, mobile bill pay, social media interaction, online knowledge base’s. Nothing is more frustrating to a customer than watching a company invest oodles in technology when it consistently demonstrates little in the way of savvy when dealing with the most basic of interactions.

Once you have your baseline set in each of these areas, and get your performance to the minimum expectation for both, you can look for more and more ways to offer those “extras” that will really make a difference, while also raising the bar for your competitors.

Who wants a second helping of crap?

Look folks, lagniappe is a often a good thing, particularly when it is added to a solid buying experience.

But when it’s not , any effort you spend to provide it will at best be neutralized, and may  even cause the opposite effect. After all, who wants a second helping of a crappy meal?

Fortunately, for those who are spending Mardi Gras in New Orleans, there’s little likelihood of a crappy meal. And if you do happen to experience one, you’ll probably be to drunk to notice!

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com