Strong performance management is essential for customer experience improvement. All too often, best intentions can get derailed over time. Here are 4 basic principles that apply to any initiative, program, dashboard, or stretch goal:
- Connected - make sure you're focusing on things with strong connections to overall objectives.
- Actionable - select strongly connected success measures that allow you to control outcomes.
- Predictive - emphasize actionable, connected metrics with strong cause-and-effect to objectives.
- Sustained - setup the right environment for predictive measures to keep producing strong results.
How to Connect to the Big Picture
One of the biggest metrics mistakes is random selection. The best metrics start with the big picture:
- Overall Objective: Identify the overall objective of your company or initiative. State it quantitatively. It should answer the question: "We'll know this is successful when we see _____ happen."
- Cascading Focus: Like a waterfall, the overall goal is cascaded to each level of the program or organization, to identify successive contributions to the big-picture goal.
- Metrics: Metric definition moves in the opposite direction of the cascading goals. How will you measure progress of the action plan at the lowest level of the organization or initiative? How will this roll upward through the successive layers of the organization or initiative?
- Validate: Scrutinize your answers for logic and refine as needed.
How to Make Measures Actionable
Metrics at the lowest layer of an initiative or organization have the highest actionability. A focus on the most actionable metrics is essential for 'moving the needle' of big-picture metrics.
- Opportunity or Problem: When you identify a problem or opportunity that needs to be addressed, this is the symptom that you will explore for root cause analysis. Start with the observable problem or opportunity, not with possible solutions.
- Objective & Goal: For the symptom identified, specify the non-quantitative goal as well as the quantitative objective before exploring root causes and metrics.
- Root Cause: Identify the root cause(s) of the overall symptom by using the 5 Why's technique or the Fishbone Diagram.
- Validate: Validate the root cause(s) to make sure it's the malfunctioning issue that ties clearly to the symptom.
- Shared Vision: Use your root cause analysis diagram to help create a shared vision, empowerment, and momentum.
How to Make Measures Predictive
Not all actionable metrics are predictive of the big-picture goal. Focusing on predictive actionable metrics leads to desired results for big-picture metrics.
- Inputs & Control Points: Among the root causes identified earlier, some may be inputs to a key process, and others may be critical junctures within the process itself.
- Resources & Culture: The ability of a process to meet its objectives is often determined by resources, skills, stakeholder buy-in and cultural factors. These are levers you might employ to improve the process inputs and process control points.
- Tallies: To track action plan progress, use tallies, check sheets, control charts, run charts, pie charts, or any other monitoring method.
Satisfaction Metrics Example:
Businesses seek great market results such as favorable customer perceptions that result in revenue and market share growth. To track whether customer perceptions are favorable, surveys are often used. Survey ratings are important windows to business success; they are also lagging indicators because they measure what the customers have experienced. To get ahead of the curve with leading indicators of customer behaviors, it's necessary to identify predictive measures that tie into the survey ratings, which of course tie into customer perceptions and our resulting revenue and market share growth.
These predictive measures need to be things that are actionable at the manager and worker levels, with a strong tie to the customer survey ratings. To identify elements with a strong tie, statistical analysis of survey ratings are a popular solution, such as regression analysis, correlation analysis, or trade-off (i.e. conjoint) analysis.
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For example, on-time delivery performance may have a strong correlation with customers' ratings of overall satisfaction and likelihood to recommend your brand. Teams should then create action plans for improving on-time delivery, and monitor metrics that track the success of their action plans. To be sure that customers forgive you of past disappointments and re-set their expectations, "close the loop" with them by communicating your improved track record.
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By linking lagging and leading indicators you'll be able to see the whole picture and systematically manage your success proactively. This is the heart of empowerment for any initiative.
How to Sustain Results
Now that you've built momentum in connected, actionable, predictive metrics, make sure you get lasting results.
- Tashiro Chart: For sustained momentum in leading indicators' progress, the Tashiro Chart is a one-page action plan combined with a trend chart of the action plan's leading indicator.
- Flag Chart: For a birds eye view of what's going well, the Flag Chart gives management a quick indication of trends, highlights, and concerns.
- Balanced Scorecard: Like a pilot's dashboard of dials reflecting the spectrum of an airplane's key metrics, a Balanced Scorecard concisely depicts the spectrum of key metrics for an entire organization or initiative. Ideally, it includes layers of inputs, control points, and levers.
- Goldmines Verus Landmines: Appropriate use of dashboards is imperative. It's quite common for metrics to be mis-used, mis-trusted and mis-managed. What gets measured gets done, so improper use of metrics can lead to unintended behaviors that may negate the expected value of having metrics in the first place.
Impossible to Measure?
Many efforts are inherently non-quantitative. It's difficult to see any way of measuring such efforts. Yet there's always an associated leading indicator that can be tracked with yes/no, low/medium/high, or other metric that can be monitored over time to observe trends and assess predictive strength. Creativity tools are great for viewing these challenges constructively. For hard-to-quantify topics, ask yourself: what's the big picture objective, what's actionable (a root cause), what's predictive (cause-and-effect correlation), and how can it become sustainable over time?
To increase likelihood of achieving great results for any goal, identify connected and actionable focus areas, and emphasize predictive metrics with well-planned tools for sustained momentum and success.
Note: templates, step-by-step instructions, and additional examples of the tips specified above are available in the new handbook by Lynn Hunsaker, Metrics You Can Manage For Success [3].