“If you can’t measure it, you can’t manage it” goes the old saying. Most businesses measure and track some key performance metrics. Often two or three metrics are selected to assess the performance of business units , teams or individuals. However, the problem with monitoring performance based on a small number of metrics will potentially change their behaviour – often in an unexpected and sometimes in a non-productive way.
Metrics can cause departments, teams and staff to over-focus on what is been measured. For example one of Campbell Venture’s clients measured the performance of their service technicians on Mean Time To Repair (MTTR.) This caused a change in behaviour, many of the technicians started to log service activities before simple questions about the possible fault or problem were asked. This caused a breakdown in communication and overloaded the system with simple faults that could have been resolved quickly over the phone. It also made some of the technicians avoid complex support problems and the application of “band aid” solutions rather than true fixes increased.
Another example of where metrics can have a detrimental impact on a business is in call centres. Consider a call centre that uses just one metric: average call time. This could cause declining customer service as staff seek to minimise call times. They may even hang up on demanding customers. As a way of correcting the situation say the call centre manager changes the metric to: customer satisfaction, and they begin to ask customers to do a survey after each call. Some staff may make offers to customers that are unrealistic or cannot be delivered. It may cause staff to give customers generous discounts and credits. This could lead to reduced profit margins, increased costs and dissatisfied customers.
Measuring performance using a small number of carefully selected metrics can be highly successful. Setting objectives and metrics can clearly change staff behaviours. However, it is critical that the metrics selected measure total performance.
For further information about this article or for a confidential, no obligation discussion on how this could impact your business please contact Mike Campbell, Managing Director on +44 7771 615641 or email@example.com. Or further information regarding Campbell Ventures please refer to campbell.pwebs.co.uk and www.china-business-experts.com.