What we measure is what we get
Oftentimes in business, the owners or management have an expectation as to what the team should be delivering. Also, the owners and the managers usually believe that the team should be aware of issues that pertain directly to the customer. Finally the management then get frustrated when either the production is not met or the service quality standard is not achieved.
The question that has to be asked is this – what are the owners/managers measuring? Or, if they don’t have a specific scorecard to tell everybody how the business is going, what are they reacting to?
So, for instance, in their staff meetings or individual meetings with team members, what are they talking to their staff about? If they are concerned about the quality but then all they react to is whether there has been adequate production, the staff will soon become aware that “what matters around here” is production, not quality. Behind the scenes, the management might be getting frustrated with the quality, but all they are reacting to in their team meetings is another issue.
So whether it is by way of a relevant, accurate, timely scorecard, or whether it is just by way of management actions, what we measure is what we get.
This point has been illustrated to me recently in a company that I have been working with, where we are in the process of implementing production targets. There was an expectation that the team could only produce 1000 units per day, and there had been some days when production was as low as 800 and not many days when the production was in excess of 1000. So implementing a production target of 1000 per day to start with, with a goal that within 4 weeks we would be able to increase that to 1100 per day, had a remarkable impact. Within 1 week, the team was exceeding 1100 and nearing 1200. Five weeks later, they were at 1400 per day.
Nothing else has changed, other than there is a scorecard, and there are positive consequences happening through reward and recognition from management of achievement of the team. The team has beeen able to together, without input of management, learn how to improve processes that have enabled increased production. Prior to this scorecard, management thought they were doing well when 1000 units per day were produced.
Measures (KPI’s) drive behaviours. Now we can’t measure everything but we need to carefully measure what is important because they can influence the actions of the team.
What we measure is what we get. What are you measuring? Do you have a scorecard? If you don’t have a scorecard, what are you reacting to? There is no doubt that measures can change behaviours. It doesn’t mean that we should measure everything that moves in a business. We only must be measuring what matters, either to the end customer or to the efficiency within the business. There is not doubt that what management views as important by their actions is what they will get.
So again I ask – what are you measuring in your business?
Brand engagement and financial performance
Charlene Li for Altimeter Group has recently released an interesting piece of research. Deep brand engagement correlates with financial performance. Her report is stating that the companies that are the most engaged on social media have a distinct financial advantage. The most engaged companies had a superior financial result.
To quote Charlene “Social media engagement and financial success work together to perpetuate a healthy business cycle ; a customer oriented mindset stemming from deep social interaction allows a company to identify and meet customer needs in the marketplace, generating superior profits. The financial succes of the company, in turn, allows further investment in engagement to build even better customer knowledge, thereby creating even more profits – and the cycle continues”.
Whilst Charlene is not saying that there is a proven cause and effect relationship just a correlation, it would seem that the key point is that the companies have a customer oriented mindset. With this mindset you will always be looking for ways to engage more with your customers whether online or offline. The other point is deep engagement. It is not a superficial exercise to collect the most followers but rather having a deep engagement.
Remember a customer oriented business leads to greater financial rewards to everybody involved.
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