While there is nothing wrong with using a quantitative metric, it often fails to take into account the alignment of the work with the overall strategies in the organisation.
Cheryl had just been promoted to become her company’s call centre manager to manage a team of five. On her first day at work in her new role, she was instructed by her boss to devise a way to measure the service quality of the call centre. Her boss did not specify how and what to measure such an abstract concept. Cheryl thought to herself: “Maybe I can measure the number of complaints and compliments that my team receives from our customers. That would be one important metric.” At least that is what she thought might be an important metric to her boss. Or is it?
James has been the Chairman of the Community Emergency and Engagement Committees (C2E) in a constituency with People’s Association for a year now. In order to ensure community preparedness and resilience in emergencies, he has been measuring the number of residents in his community who are trained first-aiders and systematically sending more of them for training. He believes that the number of trained first-aiders on the ground is an important metric to measure the success of efforts in keeping his community prepared for emergencies. Or is it?
I am sure many of us face similar challenges like Chery and James at work, i.e. figuring out what metrics to use and setting targets on them. This is not a trivial task especially for new managers. A common mistake that rookie managers often make in this process is automatically defaulting to quantitative metrics. The two examples above illustrate this problem. While there is nothing wrong with using a quantitative metric, it often fails to take into account the alignment of the work with the overall strategies in the organisation. Qualitative metrics matter too.
Take Cheryl’s job as a call centre manager as an example. The main purpose of having a call centre is to serve customers with a high standard of service quality. The overarching strategy may be to eventually inculcate customer loyalty. A company with a strong customer loyalty will be able to command a better price margin on its products/ services over its competitors. It can also sail past potential
disruptions in the market with their clientele intact. Yet, the number of complaints and compliments only measure the quantitative aspect of the rationale behind setting up and running a call centre. It reveals nothing about whether the customers will stay loyal to Cheryl’s company or not and the role of her team in ensuring that.
How to Develop Good Metrics and Set Good Targets
I was inspired by what Mr John Doerr wrote in his book Measure What Matters 1 about his ‘objective key results’ (OKR) methodology. The underlying principle is to break down the work that you do into a set of business objectives and define a set of key results with each objective (i.e. metrics and targets) to measure and track the fulfilment of these objectives. When the key results are fulfilled, the objective is accomplished. Leveraging upon Mr Doerr’s methodology and incorporating what I have observed from excellent organisations as a Senior Business Excellence Assessor over the years, I would argue that the best way to improve the ability of managers in this regard involves the adaption of three steps. They are:
- Develop the deep understanding of the purpose behind your unit’s existence. The saying “Begin with the end in mind” is often forgotten in day-to-day operations. Many novice managers especially those who are being promoted from the ground often assume that only operational metrics are important to their work. They forget that it is the alignment and the fulfilment of a business strategy that gives meaning to the work they do. Failing to constantly validate and steer their works’ outputs towards the overarching strategy will always achieve sub-optimal results.
- Develop a set of quantitative and qualitative metrics and set targets geared towards this purpose of existence as defined in (1). This often requires a deep engagement with the relevant stakeholders to uncover what metrics would be most appropriate, which aspects need to be measured, and how these metrics and targets are being broken down into individual metrics and targets within your team. What is important to note here is that defining metrics and setting targets are culture acculturation tools. Whatever metrics and team targets you choose to set will profoundly impact your team’s culture. So choose wisely. I agree with Mr Doerr about delinking our performance management system from this metric definition and target-setting process. By doing this, we are explicitly telling our team that this process of doing so is focussed on helping the team fulfil the organisation’s strategy and that we are collectively responsible for continuously fine-tuning our metrics and target-setting approach until we get it right. People will continue to be resistant to changing the metrics and set targets if no delinking is done.
- Review and discuss the efficiency and effectiveness of the metrics and its targets on a regular basis with your team members and fine-tune them to make them robust to market changes and to ensure that it continues to be aligned to the overarching reason behind why the team exists. This is where I also agree with Mr Doerr that the basis of this regular discussion with your team members will help managers keep pulse of the competencies and performances of his/her team. This can be used as a performance management mechanism instead.
Let us look at how to apply these three steps on the example on James. The main rationale for setting up the C2E committee is to ensure community preparedness and resilience in emergencies. One way to measure this is how fast a community can come together and help each other in response to an explosion in a food court. Clearly, while the number of trained first-aiders does provide some measurement of the community preparedness, it is insufficient to justify the reason for the C2E committee’s existence. An example of a better set of metrics can be as follows:
To ensure the full medical preparedness of the community in situations of terrorism/accidents that involve injury. To ensure the full
medical preparedness of the community in situations of terrorism/accidents that involve injury.
Key Metrics and Targets:
More than 50 per cent of residents staying within the community are trained first-aiders.
Achieved first-aider to residents ratio of 1:10 around key installations which may be prone to such attacks/accidents.
More than 50 per cent of first-aiders living within a one kilometre (km) radius of an emergency site can be mobilised to
respond within 15 minutes in the event of an emergency.
As you can see, the strategy here has been fine-tuned towards a specific emergency scenario that has a high probability of occurring within a community. While it may not entirely cover the overarching mission to ensure the community’s resilience in emergencies, it measures the efficiency and effectiveness of one important aspect of it. By annually reviewing and updating these metrics and
plotting the trends of how the targets are being met or unmet, James would be able to systematically fine-tune the metrics and targets to achieve his operational requirements over time.
Developing the organisation’s competency in measuring and tracking the fulfilment of its business strategies is not easy but extremely important to the success of any organisation. Thankfully, Mr Doerr’s OKR methodology provided one way of doing so.
1 Doerr J, 26 April 2018. Measure what matters, Penguin Books Ltd, London, United Kingdom.
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