Track Information That Matters

The universe converges on whatever you think about.  Once it becomes a prominent thought, you see more of what you are thinking about.

Over the past several weeks I have written about performance measurement and the perils in using indicators that are too narrow, even if easy.  True to form, the universe supplied me with this example from Forbes.  Why I Fired My Top Salesperson

It involves a call center.

Using poorly founded metrics leads people to poor decisions.  The easiest is not always the best and a single measure is never the best.

Author Roger Dooley points out that using their initial superficial metrics, Sally was the most productive, talked to the largest number of potential customers, wrote the most invoices and had a low average time on call.  Heather on the other hand was much less productive and “would likely have been the first out the door”

Using different metrics, Dooley determined that Sally was a long term problem for the business and Heather was the real producer.

Performance from anyone or anything is complex.  A tiny swing flaw eliminates a golfer from contention.  An oversimplified news article drops the price of a stock.  An employee snaps at a customer while thinking about his sick daughter.  You cannot judge performance based on a single performance artifact.

Dooley’s problem would be obvious, but being inside the business, he did not notice.  He made a common mistake. He focused on activity rather than action.

He decided early that productivity could be measure by calls per hour, sales per hour or similar metrics.  That turned out wrong.  An operator can easily fudge those metrics.  If the customer is not going to buy right now, blow them off.

Blown off customers seldom return.  The experience is unattractive.  Even the ones that buy feel unloved.

Heather on the other hand took more time, generated fewer orders per hour, but created a pleasant experience.  Fewer but better orders.  Second time buyers and referability.

Metric choices that fail generally fall into easy to see categories.

  1. They measure activity.  Action is better than activity.  Looking busy is not all that hard.  It is also not very important.
  2. They measure a single short term aspect.  Loyal customers are valuable.  Today’s quick sale not so much.
  3. They never change.  Old data, even useless old data, is hard to ignore and often people make more of it rather than think about what they are doing.  Momentum is harmful.
  4. Poor choice of a reason to collect the data.  If you don’t know how you are going to use the data, you may not need it at all.  Be sure managers are using the data they ask for in ways that attach to business objectives.

The article’s twitter topic line sums it up. “Data-driven decisions are the best kind, but only if you use the right data.”

Do not accept short cuts.  The easiest data to collect may not be useful or important.  Be sure your data means something.

Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

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