Align your metrics – It is better to all chase the same, though wrong, Goose, than to all chase different Geeze –

Goose flyingThe bottom line of my Goose Chase posts is that it is very easy to loose focus on what is really important to drive your business and to find the right metrics to drive customer satisfaction and loyalty. You can find the posts here. Today’s post is about:

Aligning your metrics – It is better to all chase the same, though wrong Goose, than to all chase different Geeze –

Most of us agree that having metrics, measurements and goals is important if you want to keep track of your performance as a business in whole and as departments or customer process-owners as part of the whole. It is as important for your business to align metrics as it is to align goals. Both aim to ensure that we all move in the same direction. True alignment of goals and metrics, unfortunately, is not the case in many companies.

I would like to illustrate this with one of many examples I encountered over the past years. This situation played within one and the same Sales & Marketing department of a triple-play Telco company:

The marketing team came to ask the direct sales team to set-up a dedicated outbound calling team for their new campaign. The first wanted to have the outbound agents to really dig into the customer conversation to find out his/her needs in order to make a good assessment of what to offer from the full mix of product/service combinations there are to offer. The direct sales department did not agree to that approach. They wanted a clear cut offer with pre-cooked sales arguments and a succinct call-script to go with that. Both started a fierce discussion on the best way to sell and to get the best result of the campaign. Both defended their own position as if their lives depended upon it. And it didn’t take long or it was explained from both sides that “politics” were involved. Who has the longest breath and who is the strongest: I’m right or you’re right and no in between possible.

The root cause of the situation?

When digging into the discussion it was discovered that the marketing team was measured by the average revenue of the contracts closed and the direct sales team was measured by the number of contracts closed. The kind of selling, requested by the marketing department, would take too much time and would result in not meeting the agreed volume of sales with the number of hours available (and in the budget). Hence the desire for easy selling offers and clean-cut scripts.

The above situation is a clear example of wrong alignment of metrics within one and the same company department, resulting in valuable time lost, loss of employee satisfaction and (further) increase of separation between two parts of one organisation, one department even. It’s a destructive practice which is widely spread within companies these days, that can be easiliy prevented: align your goose chase.

Whether the marketing department is right or the direct sales department is right does not really matter for the bottom line of this story. I even dare to say:

it is more important that you align your metrics than having your metrics absolutely right:

– it is better to all chase the same, though wrong, goose, than to all chase different Geeze –

When you think of the above and think of your own working environment, what do you think? Do you have aligned metrics? Can you now imagine why that “other” department is acting so “political”? Please share your thoughts in the comments.

Reblog this post [with Zemanta]
Advertisements

2 thoughts on “Align your metrics – It is better to all chase the same, though wrong, Goose, than to all chase different Geeze –

  1. Esteban,

    Good addition to my post. Metrics being right or wrong depends on whether they are aligned with the ultimate business goal. Your right/wrong scenario’s above are all true.

    I also agree that HR should play an important role in the process of aligning extra-ordinary remuneration (bonus) with the organization’s goals. In my experience HR plays too little of a role in these kind of discussions, due to the fact that they:
    – have too little expertise on the business (or it’s not perceived that way).
    – they are focused mostly on employee rights and putting in place correct processes and procedures to ensure these rights, rather than being a true sparring partner for business management.

    This of course is not due to HR lack of interest. It just has not been one of their goals and has not been made one of their goals by top-management.

    This could maybe be explained because very little top-managers come from an HR background or have worked in HR during their careers. Yet, that’s a topic for a full post in itself.

    Maybe John Moore wants to pick up that glove?

    Like

  2. Wim,

    Interesting post. I think that your story nails the problem in the organization very well, even within the same department they are having different rewards metrics.

    Alas, one thing that I want to point out – and you did not explain it so I am not sure which way it goes – they are both wrong. Or right and just need to be better aligned.

    The goal of all activities in an organization should not be to improve their results, their metrics. Should be to align them metrics with the organization’s goals. I am going to guess, because of the metrics they chose, that the organization’s goal at the time was to increase the number of contracts, within the segment they were both dealing with. If that was the case, then the department that was tracking total number of contracts was right, the other one was wrong.

    However, if the organization’s goal was to increase the total revenue – regardless of # of contracts, then the other department would have been right – presumably – since a higher average has larger revenues attached.

    Final thought, what if the organization just wanted to grow the revenues at the cheapest way possible? Who was tracking the costs of selling so they could make that calculation? If none of them were, then the alignment between both would not have mattered.

    Very often individual departments forget to align their metrics and their goals with the organization’s. This results in individuals actions that don’t support the goal of the organization, and good results that don’t reach the expected outcome. You see this when earnings reports, for example, disappoint on a specific department that the company forecast, but other metrics were good nevertheless.

    It is all about supporting the larger good (the organization’s goals), not the individual bonuses of each manager. And that is where HR plays a critical role in a good organization. (John Moore would agree, I hope).

    Thanks for a nice post, interesting position.

    Like

Comments are closed.