As with many organizations, measuring business performance begins as an art. It could be said that through sheer grit and creativity, small businesses are successfully created. It is the creative thinking and profound knowledge of a product and or industry that propels the business forward. However, what happens when the company hits a growth peak, or when inefficiency is overpowering the artistic creativity of the creator? This is the point in which metrics and science will aid in driving performance.
For every business, measuring performance comes in different flavors. Whether sales, marketing or operational improvement, baselines must be established and metrics must be created. How does one go about setting benchmarks and developing metrics to drive the right behavior leading towards increased business performance?
Let’s begin with what doesn’t work
1. Don’t assume that technology will replace the requirement for strategy. It is the responsibility of the business to define vision, mission, strategy and overall organizational objectives leading to business practices. It is the people, process, and technology that will support this strategy.
2. Don’t pull a small sampling of data from independent systems to support a belief. This is akin to searching the internet in support of a belief system; you will find answers backing just about anything. This is not good for the business and is even worse for measuring performance.
3. Don’t expect the team(s) to improve without organizational support. For example, if you want to increase sales, don’t randomly increase the sales quota without people, process, and technology to support the goals. This is a three-legged stool, and without process and technology helping the people, this approach will fail and create much heartache along the way. There is a point of diminishing return when burnout overpowers grit and hustle.
Here’s where you can start
1. Determine your business drivers – As part of a strategic plan aligned with mission and vision, it is vital to define what drives your business. If you are going to implement metrics to drive performance, these metrics need to align with business drivers.
2. Develop a list of possible initiatives tied to business drivers. For example, if a business driver is to improve customer satisfaction, then a list might look like this.
a. Expedite product delivery time
b. Decrease product defects
c. Decrease time to issue resolution
3. Now develop a list of metrics that might drive increased performance in these areas. Keep in mind both the negative and positive aspect of the metric. For example, only measuring a decrease in time to resolution alone, might become a negative influencer. Agents might cut corners to decrease time. However, customer satisfaction may suffer. Considerations like adding an email survey upon case resolution rating your service with a green, yellow or red box might help mitigate and help identify a negative trend.
4. Ensure you have systems in place that support the people, process, and technology to drive success. This will include the methods used to measure performance.
A critical element in measuring business performance is doing so across more than one data point. As used in the example above, measuring a decreased resolution time trend alongside an increased customer satisfaction trend is positive. To the contrary measuring reduced resolution time alongside a decreased customer satisfaction rating means problems.
Lastly, be sure your systems allow you to pinpoint trends quickly. Using the example of a reduced time to resolution, you need to be able to answer the why. On Monday morning, you enter the office to see a trend with time to resolution increasing. Providing you have done your diligence, you should be able to pinpoint the issue(s) quickly. Before assuming that the support teams have lost their touch, is it possible that:
- A new product was recently rolled out, and there are significant defects?
- A new product was rolled out, and the support teams have not been adequately trained to support it?
By recording the data across multiple data points, the slightest trend could quickly alert you of potential problems and allow you to provide a quick resolution. For example, product X is now representing 40% of your service cases, which is a 3% increase. This could be due to a recent sale of product X increasing items sold, could be due to a change in manufacturing, or component issues.
Know your strategy, know your goals and know your data. Be predictive through the science of metric driven performance!
Let me know how I can help.