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7 Deadly Sins of Performance Measurement - Vanity
In 2007, industry expert Michael Hammer wrote an article entitled ‘The 7 Deadly Sins of Performance Measurement (and How to Avoid Them)’. He explained that he had discovered that very few companies were really satisfied that they were using the best methods for measuring the effectiveness of their operational systems (e.g. marketing, manufacturing, procurement, customer service etc.)
This has obvious implications for Insight teams – both in terms of the effectiveness of their own methods of measuring factors such as customer satisfaction, and in terms of exploring how they measure their own performance.
Hammer subsequently identified seven key mistakes that organisations can easily make when defining or using metrics. In this first article of a short series, we take a look at the first ‘deadly sin’ – vanity.
Vanity, vanity, all is vanity…
Vanity can lead us into the very human error of using misleading results that will paint us in the best possible light. It’s very natural for us not to want to set ourselves up to fail. This can lead to a tendency to set personal and team objectives that are very achievable. We seem to have become a nation of form fillers and box tickers and we always want to look good. However, if your measurements aren’t stretching you and don’t lead to any change, what’s the point of them?
Let’s look at a typical example of the measurement of customer satisfaction. It’s very easy to fall into the trap of reporting the ‘not dissatisfied’ results rather than the ‘very satisfied’ scores. For instance, if you use a five-point scale that ranges from ‘not at all satisfied’ to ‘very satisfied’, you might be tempted to aggregate the top three boxes and report that score as a measure of customer satisfaction.
However, in most cases, using this as a target wouldn’t stretch you very much and could encourage mediocre customer service. It would be better to focus on the highest rating of ‘very satisfied’ and to try to surprise and delight as many people as possible, in order to raise standards. Unfortunately, you might find some resistance to this if customer-facing staff bonuses are dependent on such scores (e.g. some bank networks have customer satisfaction scores at branch level that are key to staff bonuses.)
Just look at yourself…
In terms of your own Insight team’s targets and performance measurements, you might be tempted to focus on measures that you feel fairly confident about achieving (such as completing projects on time and on budget). But again, this won’t ensure that you will actually make a difference to the business. You might like to consider something rather more stretching.
The most ambitious approach that we’ve come across involved an Insight Manager who decided to track all of the recommendations that the team gave to their internal clients. They then set a target to try to ensure that at least 80% of these were followed through. However, even this kind of target can be abused, as it could make team members more tentative. They might then only make recommendations of the ‘no brainer’ type, rather than making potentially more radical recommendations based on insight.
So, next time you’re looking at different measurement methods, take a moment to consider how you can use them in a way that means you can avoid falling into the ever-open trap of vanity.
