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The Measurement Trap - Your ROI Obsession Might Be Bad For Your Customer

January 13, 2012

Technology has evolved to not only allow the world to create, manage and observe billions of transactions online, but to provide unlimited new business metrics to track them all. With the mantra of "ROI" being the main driver of investment and decision making in many companies, there is a danger that comes with all forms of "management by buzzword" that the holistic perspective gets lost and the ball gets dropped on other things that matter more to your success.

Technology Overkill?

Seth Godin recentlyChaplin Modern Times   cropped posted one of his typically thoughtful blog posts that ended with the line "Measurable isn't always the only thing that matters." (see full post here). It reminded me of today's topic on Business Metrics, which is something that has bothered me since I first figured out how to measure the business I was in back in the 90's. At the time, I was running the hugely successful Lands' End operations in Japan, and we had grown from an initial group of 17 customer-service reps to nearly 200 in just three years. Like a lot of successful start-ups, it is always tempting NOT to measure anything except the bottom line and your resulting bonus, but since we had the most advanced Lucent ACD and software in the market at the time, I leveraged quite a bit of the data to develop spreadsheets to tell me almost any kind of number regarding performance in the call center, and to help us produce forecasts and work schedules too. But as we often find with many failed technology products that stuff in too many features, just because you can do something doesn't mean you should!

Dialing for Disaster - The Call Center Dashboard

Over the years, I've seen many call centers, and it is not uncommon to have the supervisor on site share with us their "dashboard", where they proudly point out the data points that show downward trends in Average Call Time, Calls/Order, etc., sometimes having 20-30 different data points that are all meant to mean something. There is nothing inherently wrong with management defining and tracking all of those numbers. But by creating them, you might also be creating a threat to your business and your customer. How?

To continue on our tour of a theoretical call center, let's start with the worst of the worst. You know the ones, they have the "big board" on the wall that shows all the reps how many customers are waiting on the phone. Modern call center software also now shows the rep what their average talk time is, the total count of calls they have taken that day and might even indicate where they stand relative to the other reps on the floor on that shift. While management might think that they have done well by creating a set of metrics for all to see and live by, their results might look like this:

  1. Lower customer satisfaction - from a feeling of being rushed by the service reps to finish the call because they see so many others waiting
  2. Higher return rates/Lower re-order rates - from mistakes made by the service reps anxious to hang up to meet their targets for shorter talk times
  3. Declining morale - by the reps who go out of their way to do the right thing for the customer, but get punished in their performance reviews for having longer talk times and taking fewer calls per hour.

The problem here, is that by sharing your targets in dashboard form with your employees, you take their focus off their main responsibility -the customer - and put it on YOUR responsibility as a manager. This is the old-fashioned management logic of managers thinking their teams are there to make them look good, when they should be thinking about how to make their customers happy. Period.  Remember the second of the four principles in the "Customer-First Org Model" was "Invert the Risk Factor", where the perception of risk (and responsibility) needs to be greater as you go up the management food-chain. By placing the burden of their own metrics on their employees, managers are transferring risk back towards their customers.

Share Less, and Assign Role-Appropriate Business Metrics

What I always did in the call centers I managed was to have the phone reps focus on just ONE thing - percent of calls answered that required escalation (i.e. transferred to a customer-service rep). This was something they could directly contribute to that also meshed well with their primary task of making customers happy. The reason being is that every time a call got transferred to customer service, it meant that we were not able to fulfill their request or need with the first person they reached. If we spotted a persistent problem, it then allowed us to fix it and address it through training or a slight policy shift. And because this focus meshed with their primary goals, most of the solutions came from the reps themselves. Did we track all those other numbers too? Of course we did, but those were indicators for MY action items (i.e. more/less staff on floor), not theirs.

How would you cut down your own dashboard or parse up your business metrics to be more focused and more relevant to the right people?  Share your thoughts from other industries and we will cover a more common example in my next posting.