Monthly Archives: December 2015

Metrics In The Eye Of The Beholder

Messschieber

A previous post on this blog discussed several reasons for not using case life as a goal for first line support engineers. I was reminded of that post, and the reasons for writing it, while hearing someone state that organizations should “only measure outcomes, not activities”. It’s easy to agree with this statement, after all, outcomes are the only thing that matters in business, right?

Let’s take a moment and try to understand how these outcomes are realized. The obvious question to start with is “what’s the organization’s deliverable to the company?” Over the years, through my own and others’ experiences, I have seen a variety of answers to this question as it concerns enterprise support organizations. Goals ranged from operational objectives through customer satisfaction all the way to maintenance renewal rates and revenues. Surely the organizational deliverable is an important metric to track and report on, but is it the only thing that matters? And more importantly, does it apply to every member of the organization?

Similar to case life mentioned earlier, or to the goals listed above, outcomes are trailing indicators. They, almost by definition, represent an aggregation of a variety of activities and inputs. Making any improvement to the operation requires us to understand the individual components our deliverables are composed of and build a system of metrics that allows us to understand the way we perform on each, identify weaknesses and measure improvements. We should also measure inputs, from the number of cases to the growth in the number of customers and track the way those inputs influence our performance, all the way to delivery on our goal. In essence, we should design a metrics structure that breaks down the goals of the organization into departmental goals supporting it, and into the activities that these goals are composed of

We should also keep in mind that metrics can serve different roles depending on the audience. One group’s outcome is another’s input. Activities represent a major investment for the organization and ensuring their efficiency and effectiveness is a primary concern for anybody running a process driven operation. Any measurement system we design will have to take into account the organizational deliverables for the short and longer term future, the investments it has to make into producing those deliverables, the inputs it requires in order to do that, and the way these measurements apply to every function within the organization. On that in our next post

NPS Again, This Time With Feeling?

Recently I came across two interesting posts discussing NPS®. Each of them seems to miss one, or more, important points about creating a sustainable customer survey program that actually produces tangible results

First, and very interestingly, is Fred Reichheld, creator of NPS, on linkedin telling us to Stop Thinking Like a CEO (and Think Like a Customer Instead). If we think about the title for a minute we’ll realize that unlike the customer, a CEO has responsibility for identifying weaknesses in the customer experience and taking action to fix them. In his post, Mr. Reichheld tells the stories of two CEOs who transformed their companies’ customer experiences. But, did those CEOs do what Mr. Reichheld is asking us to do? No, they did not. They never stopped thinking like a CEO, but they did bring the customer perspective into the organization, and, most importantly, acted on it to deliver a better customer experience

In his post Mr. Reichheld claims that:

“The best approach is to ask customers on a scale of zero to 10 how likely they would be to recommend your products or services. This is what […] companies do every day to be loyalty leaders. By closing the loop with their customers and taking action on the reasons why customers love doing business with them or not […]”

But while the scale is detailed, the need to “take action” remains nebulous – how do we know what actions to take, and how do we verify their impact?

Another post that caught my eye last week was on the Bluenose blog, titled Driving Net Promoter Adoption: 3 Must Do’s. In his post Don MacLennan, Bluenose CEO, states that leadership commitment, organizational alignment and customer follow through are essential to increasing a company’s NPS results, and he recommends engaging with customers as a survey follow-up in order to establish the cause of their dissatisfaction and eliminate it

Some readers may ask whether there’s anything wrong about engaging with customers to find out what’s causing dissatisfaction. The answer is that there’s nothing wrong about that, but when we think about a process driven business we can’t rely on anecdotal evidence as the sole input to our improvement efforts, and that for several reasons:

  1. The plural of anecdote is not data – so no matter how many customers the company interviews they will be only a small portion of the customer base and their opinions remain anecdotal rather than a complete picture
  2. Discrepancy between stated and actual behavior drivers is a well known phenomena and is documented in numerous academic papers
  3. The challenge in converting anecdotal evidence into a sustained organizational effort to improve products and services

With that said, what would be the best way to follow up on NPS, or any other, survey and generate sustained improvement

The answer should be no surprise to the blog’s followers. Survey responses, in correlation with your operational data, provide the organization with very clear insights on actual (as opposed to stated) customer behaviors and their drivers. With these insights it is possible for the organization to develop sustained improvement efforts based on the most critical elements of the customer experience, and gauge their impact on customer satisfaction, as well as customer behavior. It’s doable, and usually easier than we tend to think, but does require commitment and a change in the way we think

Net Promoter, NPS, and the NPS-related emoticons are registered service marks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld