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Are You Measuring What Matters?

Photo: Joanna Kosinka

OD: Organizational Dev

Are You Measuring What Matters?

Measurement is essential for achievement. Without measurement we really don’t know how we’re doing.

 

If you miss the start of a football match on TV, when you tune in the first thing you want to know is the score!

Measurement is the only real way to know whether you’re making progress (at anything).

However…are we measuring the right things?

 

Let’s say I want to improve my fitness level so I can run a marathon (42 kilometres).

Watching TV and eating burgers regularly won’t help me with this – and here’s why.

I measure the hours I watch TV and the number of burgers I eat in a week. And let’s say I get down to zero hours of TV a week and no burgers (none!)

Only to find my fitness level doesn’t change!

I’m measuring diligently but it’s not what’s actually getting me towards my goal – I should instead be measuring the number of times I’m running in a week and how far I can manage without stopping.

Measuring THIS will lead me directly to my goal.

Oh and by the way, yes, to do the running I would also likely need to cut down hours spent eating franchise food in front of the big screen!

So measurement is key but if you’re measuring something diligently but not achieving your goal, it’s likely you’re measuring the wrong thing.

Similarly, in business, it’s important to measure the right thing – not simply measure for the sake of measuring.

For example, an associate of mine shared this story from when he was sitting on a board that awarded contracts to call centres.

The Board had a checklist it followed in monitoring these call centres that worked for this organisation, and a mystery caller program was set up to test each centre with the callers using the checklist to see how the call centres were performing.

The general idea was to recognise the call centres that met this checklist, whereby these centres were given an Award of Excellence if they met the requirements in the checklist.

With over 23 branches throughout the country where they were serving, the call centres worked hard to be recognised. So it came as no surprise that with so many branches, some did very well, but there were a few who weren’t doing too great.

One day, my associate woke up with an epiphany – was his Board measuring the right thing? What did they really want from the call centres? So he went back to the Board, and they all agreed that what they really wanted was repeat customers – basically, customer retention.

What they needed was for their customers to choose them year after year to be the organisation that awarded contracts to call centres for their customers.

So his associate raised the next question to the Board:

“Is what we’re measuring leading us to that outcome?”

When they realised this, they called in the CEO of their organisation, and asked him, “Can you measure customer retention across all our 23 branches nationwide?”

The results shocked them. The ones who were continuously winning the Award of Excellence between themselves year after year, did not fare well in the customer retention scores. Whereas the ones who never seemed to win, were the greatest in customer retention – further study found that this branch had really tried the first time, but when they lost, they were really affected. Their branch manager, to boost morale, had put in some key weekly morale boosting activities which resulted in happier employees over time – and this was being translated to happier customers.

The moral of the story is this:

What we measure has to be tied in to what we really want – and if customer retention is what we really want, then what we’re measuring must lead us to that result in the first place. And in a case like this, it’s important to measure employee satisfaction.

Because happy employees mean happy customers. Happy customers spend more money and recommend you to their friends. Measuring staff happiness is a great start on the road to improved performance.

So make sure you measure the right thing.

 

Originally from the UK, Ian has lived and worked in Southeast Asia for nineteen years. The last eight of those have been spent coaching and mentoring over sixty executives and business owners. Ian's specialist area is helping executives in mid-market growth firms improve their strategy and revenues, retain their key team members, improve execution and build cash.

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