Back in 1992, Robert Kaplan & David Norton introduced the concept of a balanced scorecard in the Harvard Business Review and their follow up book The balanced scorecard: Translating strategy into action. One of their points was that “hard” financial data was a lagging indicator, while the “soft” human performance data was a leading indicator. Specifically, identifying issues on the human side allowed companies to take action before sales started to drop off as a result of the problem.

I’m going propose a different kind of balanced scorecard.

If we generally agree that that happy employees = happy customers = improved business results (I have heard this referred to as the 3-legged stool of great customer service), then would it not make sense to measure based on those 3 categories.

Rather than hard and soft data, why not employee, customer and business data. If each of these 3 measures (made up of a couple key indicators) are healthy, then business is good.

When any one of these measures starts to show weakness, you can be sure there is a problem with the others.

However, often employee data is owned by HR, while customer and sales data is owned by sales or marketing and operational data is owned by operations.

I would suggest that these measures should be the responsibility of one department. I don’t mean compilation, I mean measuring, analysing and reporting. I think only when the full view is owned by one department do we get a clear picture.

I realize that this may require re-thinking how data is gathered and shared, but given that the employee is usually the closest to operations and to the customer, tracking their data by a department that has limited experience to either doesn’t make sense.

In the past I have worked with organizations that have a single team (Information & Insights) that manages all of this. This team must also have the authority to work with all aspects of the organization to identify changes needed to improve the employee/customer relationship.

Let me know what you think.

Cheers!

In the same vein as my earlier post Are You Measuring What Counts, the blog Customer Relations referred me to an article this morning where EasierTravel reported that Avis has launched its “3 Minute Promise” service, for Avis Preferred members in France and the UK.

“The 3 Minute service begins when the customer enters the Avis premises and time can be measured by the renter with a stop watch provided at the start of each rental process. If the time elapsed is over the three minutes, the customer will receive an apology, and a few days later, a retail voucher worth €30/£20 in the post.”

Daniel McCarthy, Commercial Director, Avis UK explains: “It is our aim to enhance our customer service through best practice initiatives such as this, particularly focusing on offering a fast, efficient service.” Daniel continues, “This is part of Avis’ ongoing commitment to consistent benefits and standards across our network.” (read full article)

I thought I would offer a slightly different take on these kinds of initiatives.

The Avis view (and one I believe shared by Customer Relations) is that this is putting the customers’ needs at the forefront. So far we agree.

I guess where I think we need to expand the discussion is based on the concept — What gets measured gets done.

My concern is that if time becomes the measurement, then others things, like quality customer service, may suffer. You need to make sure that your “time-based” measures have a corresponding measure of quality of customer service experience.

I often say to clients with call-centres, “The easiest way to get a higher number of calls each hour is just hang up faster.” The customer may not be happy, but if all you want is higher throughput then hanging up will deliver it.

Now obviously, I am not serious, but it demonstrates the point.

So make sure you don’t get lulled into thinking that numeric measures alone will lead to quality customer service. Make sure the quality aspect is also built into your tracking.

Something to think about.

Cheers!

I was reading Seth Grodin’s blog this morning and he talked about the importance of measuring the quality of traffic that is coming to your site or blog versus the quantity. His point being that it is better to have a smaller number of qualified prospects/customers versus a lot of people who will never purchase. He summarized with the comment “Just because something is easy to measure doesn’t mean it’s important.”

It reminded me of the same principle that should be employed when trying to measure 1) customer satisfaction, and/or 2) employee engagement.

Too often we get caught up in designing dashboards and metrics that may measure lots of things, but if they are not actionable or possibly aren’t measuring the stuff that gives you insight into the health of the organization, then they aren’t very useful measures.

So ask yourself, are your measures giving you advance notice of changes in your business, or are they lagging indicators of issues that may have been around for awhile?

I have been doing some reading on this topic lately, so I will share some of my observations over the next little while.

Cheers!