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7 Deadly Sins of Performance Measurement - Silos, Pettiness and Inanity
In previous issues, we’ve looked at four of ‘The 7 Deadly Sins of Performance Measurement’ described by Michael Hammer. We now come to the final three, which are all inter-connected: Silos (or Provincialism), Pettiness and Inanity.
The three sins
The sin of Silos or Provincialism is all about each silo focusing on their own targets. As a result, organisational boundaries and concerns end up dictating the performance metrics. For instance, a company might focus on sales in terms of volume and operations in terms of the cost of provision – when both should consider profit. Provincialism therefore arises when there is only a narrow or partial view of the issues.
The sin of Pettiness is closely related to this, as it involves a failure to look at the bigger picture. A prime example is a leading fashion label that moved its operations to Asia based on cost but failed to take into account the fact that longer lead times result in lower profit.
The sin of Inanity relates to metrics that change behaviour in stupid ways. For example, Accident and Emergency targets for waiting times in the NHS led to practices of ambulances queueing and waiting outside so that they could maintain fast response time measures within the Department. However, this was clearly not good for patients.
One of the outcomes of these three sins can be the kind of ridiculously ambitious sales targets that have occurred in some sectors (for instance, financial services). These have a complete disregard for the quality of the business that is being sold, and the long-term implications of setting such crazy targets.
Learning the insight lessons
So what lessons can be learnt from an insight perspective? Whenever you’re conducting a research project, you need to make sure that you get to the bottom of what the real issues are for the customer.
One example of a company that failed to do this is a kitchen manufacturer who had measures for customer satisfaction relating to the product and the workmanship (two key business divisions or silos). What this company failed to take into account was the fact that most deliveries were not 100% complete and accurate. This led to delays in completing installations and frustrations for both customer and the fitter. However, these important factors were not covered by their specific customer satisfaction metrics.
The message is: make sure that you find out what’s really important to the customer and then ensure that these factors are included in your customer measures. The Insight team is in a privileged position – it is able to stand back and take a look at the bigger picture in a way that individual departments might not easily be able to do.
