Are We There Yet?

Paula Williams

The Opportunity

How will you know when you’re successful? How do you know if your company is performing optimally? The old saying "If you do what you’ve always done you’ll get what you’ve always gotten." Is not true in business these days. Even if you’ve always performed consistently well, you’re likely to be outpaced if you’re not constantly measuring results and raising the bar. But what do you measure?

If you count on your stock price or market share to tell you how your company is doing, you’re basing your assessment on external factors beyond your company’s control.

The Solution

You can stay up nights worrying about the stock market all you want, but you’d be better off getting some sleep and then focusing your energy WITHIN your circle of influence starting tomorrow morning.

Benchmarking- Where are we Starting from?

You may have a vague idea that your company is improving it’s customer service, or a sinking feeling that sales might be cooling off. These "gut feels" are excellent indicators for where you want to start benchmarking, but you need to get some solid evidence before devoting your resources to improvement.

You can’t balance a checkbook by feel (believe me, I’ve tried) or run a business by gut alone. The larger and more complicated the business, the bigger the need for benchmarking. Everyone sees the business from his or her own perspective and needs to be able to communicate clear, consistent health-and-status messages to the people and departments depending on them.

Benchmarks, of necessity, have numbers associated with them. Select the areas that are the most key to your company’s bottom line, but that you have some direct control over. Market share or stock price, have a big impact on the bottom line and are definitely numbers, but they don’t qualify as actionable benchmarking standards because those figures depend on a number of external factors. "Actionable" benchmarking standards may include the following:

• Percent of customers rating service as "excellent" (based on a survey)
• Number of add-on or suggestion sales of a particular item
• Number of repeat sales to existing customers
• Time from order to product delivery
• Number (or percentage) of your employees that have had product-based training (and achieved satisfactory scores on a test.)
• Number of customer complaints or requests resolved within 24 hours
• Number of minutes customers spend on "hold."
• Number of failed hits or broken links on a web site
• Number of new sales contacts per day (week, month)
• Ratio of new contacts:completed sales
• Number of miles on company vehicles compared to the number of sales/service calls completed.

Metrics- Do we measure by Miles or Inches?

There are off-the-shelf tools for nearly every kind of benchmarking which you can customize for your own use, or you can always make your own- especially for those things that are different for your industry or customer base. Automating the measurement process does two things for you:

Measuring has to be easy. You can easily spend more time measuring than the measurements are worth unless you have a simple, process-based tracking mechanism in place that ALWAYS works.

An automated system has a built-in objectivity that helps promote fairness and efficiency. People may feel uncomfortable if they have the perception that they are being "judged" by their boss, but seldom object to having a process measured by a tool.

Examples of tools

Customer surveys (delivered at the time of sale, or a few days after) can be done by phone, by mail, or by website or e-mail.) Information you get from your customers based on your own questions is extremely valuable, and although not every customer will take the time to fill it out, most appreciate the fact that you care about their opinion. Having a contact after the sale can also fill a number of other purposes- ensuring all outstanding issues or questions have been addressed, for example.
You may need to use time and date entries on forms in your business processes to statistically track items though your internal processes.

There are automated phone systems that will keep track of time spend on hold, and issue reports.

Training employees is vitally important but expensive. If you do not test your employees, you lose half of that value if you do not test their knowledge. FedEx tests their employees on product knowledge twice yearly. Employees who do not pass are required to attend additional training and retest. An employee failing three tests is encouraged to move to a non-customer service position. This can have added value by giving you an opportunity to recognize high scores or excellent "academic" performance. A simple multiple-choice quiz can be given at the end of a training session, or integrated into computer based training (CBT).

Many software applications can be used to track website activity and broken links.
You might revise the increments that would be useful to measure once you have a body of data to analyze and determine how useful the comparisons are.

Goals- Where Do We Want to Be and When?

Prioritize your measurements. What are the areas that are most in need of improvement- not necessarily in numbers, but that would bring the biggest results to the bottom line with the least expenditure to implement change? Boil that concept down into a single sentence that includes a number and a date.

Examples of goals from the "actionable" metrics listed above:

• Achieve a 90% "exceptional" rating on customer surveys within 6 months. (From a benchmark of 50%)
• Increase sales of a suggestion or add-on item by 50% within 30 days. (From 10%)
• 99% of all customer service employees will achieve passing scores in product knowledge by January 31. (From no product knowledge training, assuming it’s October.)
• Order to delivery time on Product X will not exceed 3 business days. (From a benchmark of 8 business days.)
• Number (or percentage) of your employees that have had product-based training (and achieved satisfactory scores on a test.)
• No caller will hold longer than 2 minutes. (From a benchmark of 7 minutes)

Goals should be a stretch, but achievable. You may make a goal incremental- by breaking it up into manageable chunks- give half credit for getting halfway there, for example. Make sure that the resources to achieve the goal are available- for example- you may need to spring for product training, additional phone lines, or express delivery service of materials. Collaborate with your people on what is necessary to get that goal. As one project manager puts it: "Don’t tell me it can’t be done. Tell me what you NEED to get it done."

SLAs- Everyone Pulling Their Weight

You can set up internal service level agreements between teams or departments to ensure that everyone is pulling their weight to deliver on the goal.

For example, the sales staff can’t be expected to meet their numbers if product is held up in manufacturing and they can’t guarantee a delivery time (or worse- have missed delivery time!) A (preferably written ) agreement that product will be available within 3 working days would ensure a reliable number for the sales folks, and would create a measurable, (and rewardable) standard for manufacturing.

After going through the process of negotiating and writing SLAs, the rank and file in many companies have a new awareness of how their jobs contribute to the overall picture. The experience of synergy and being part of a larger whole adds to the motivation and creativity they bring to their jobs every day.

Incentives- What’s In It For Me?

Being able to quantify a team or department’s contribution to the final product gives a basis for the company to evaluate compensation. Bonuses based on contribution- to meeting the numbers that management sets has obvious value by rewarding the producers.

Always make a lot of noise about incentives. Award bonuses in public (at high-attendance meetings, for example.) Announce them in newsletters or post them on posters. This does a couple of things- incentees get more than just money, they get the recognition of their peers. Also, it focuses attention in a very material way on the metrics and people start watching their numbers when they see "what’s in it for them."

Capturing Lessons Learned- Best Practices

The only thing that’s certain is that you’re not going to do everything perfectly the first time around. After your time period has passed for your goal, get the people involved together and review, preferably in an open-forum type session- what was done well, and what could be done differently in hindsight.

Take this information into consideration, then set the bar higher for your next goal, or turn the focus to a new one.

By benchmarking, setting goals, measuring progress, providing incentives, and capturing lessons learned to go forward, you have begun an upward spiral of continuous improvement. By constantly improving and changing your business processes and involving your entire organization, you stay flexible to market changes and ahead of the competition.

Send us Feedback about this article