Data has become crucial for organizations to measure their performance and to help provide a window into the areas that need improvement.
A growing number of organizations are using data from several sources to create a combination of metrics that measure quality, productivity, and customer feedback. The idea is to more easily show their workforces how their involvement is contributing to their companies' successes and to pinpoint the laggards. Only then will employees get in synch and on the path to improvement toward reaching the company's specific goals.
While different departments are likely going to be measured by different metrics, Don Peppers, founding partner of Peppers & Rogers Group, stresses the importance that these are aligned to the long-term companywide goals. Savvy organizations are focusing on the long-term value of their customers but they need to make sure that every department is geared to improve this customer metric. Peppers notes that it's imperative that certain departments aren't solely focusing on the short-term value and not working towards ensuring customer retention. "Companies need to acknowledge and recognize the long-term value created by customers rather than just the short-term value," Peppers notes.
The trick for organizations to be successful is to make sure that all their metrics are geared toward achieving the same company wide goal and don't contradict each other. Often times contradictory scenarios stem from not aligning the company goals with the customer service objectives.
Let's look at a simple example. A telecommunications company pledges to excel in delivering great service, cognizant that in a competitive market that's the only way it can differentiate itself. The system works well until a customer encounters a problem and needs to call the contact center where average handle time is the main metric used to measure agents' performance. Instead of incentivizing agents to get to the root of the problem and resolve issues for customers so that they will continue to enjoy good service, the company is telling agents to get customers off the phone as soon as possible.
Not only can such a disconnect harm the overall experience, but employees, especially ones who don't hold customer-facing positions, are left in the dark about how their work is impacting the end customer experience and what they need to do to achieve the necessary outcome.
According to Peppers, organizations need to determine their companywide goals and then make sure that metrics for every department are geared towards achieving those goals. Mark Ledbetter, SAP's global vice president for retail strategy, believes the solution is for organizations to change their compensation strategies, especially in an omnichannel world where the lines between the different touchpoints are becoming increasingly blurred. If, for example, a customer goes to a brick-and-mortar store for a particular product that isn't in stock but can be delivered from another location, who gets compensated for that sale?
Macy's recognized that the issue of compensation could be a hurdle to a seamless omnichannel customer experience and found a solution that ensures all employees have the customer's best interest in mind. Terry J. Lundgren, the company's chairman, president, and CEO, pointed out during this year's Global Retaining Conference, Macy's is compensating both the division that generates the demand and the one that fulfills the order.
As Ledbetter notes, Macy's strategy brings about the change that allows different departments to take a customer-first approach without concern that helping another department would cut into an employee's compensation. "You cannot have employees being penalized because an order was fulfilled elsewhere," he notes.
Here's a five-step guide to help establish a single set of metrics and to see the plan succeed.
- Give thought to what you want to achieve and share it with the whole organization: One mistake that companies make is not having a clear idea of their end goal. Instead, business leaders need to start by sitting down and really defining what the end game should be. Don't be vague. Goals should be as specific as possible, allowing for success to easily be measured.
- Ensure that metrics reflect your goals: Once the goals have been established, businesses need to confirm the metrics with which every department and each employee will be measured. Especially in large organizations, business leaders need to make sure that the metrics used aren't contradicting the end goal, but rather will support its achievement. Further, the metrics used to measure each department cannot lead to work practices that counter efforts by other parts of the organization. For example, organizations that are striving to improve the customer experience should not reward agents for reduced handle time since this is likely to impact the company's overall goal.
- Make everyone accountable: The whole company must work toward the same goal and not pull in opposite directions. In order to do this, employees must have a clear idea of the company's goals and how it intends to achieve them. Every single person in the organization needs to feel responsible for contributing and achieving the end goal.
- Encourage associates to gather data: Organizations are aware that data is the key to deliver a great customer experience and will help them be more relevant to customers and provide personalized interactions. Erich Joachimsthaler, founder and CEO of Vivaldi Partners Group, recommends incentivizing employees to collect and share customer data with the rest of the organization, helping them gain better insights into customers' needs and preferences. Organizations need to show individual departments the benefits they will gain by sharing customer intelligence and delivering targeted messages, including increased future sales.
- Use gamification to increase engagement: While brands need to make sure to eliminate organizational silos and have different departments work together, some healthy competition can be beneficial. Joachimsthaler recommends introducing some elements of gamification to energize and encourage employees to work around the same goal.
Finally, business leaders need to keep in mind that a chain is only as strong as its weakest link. All departments need to be working toward the same goal, and their efforts should be reflected in the metrics used to measure employee performance.
By creating a single employee metric, business leaders essentially have created an in-depth and personalized set of metrics for employees and a guide to empower employees to take the company in the right direction.