Sure, I’ll jump right on that!!!

Inspiring Action- An Art or a Science? 

I’ll jump right on that!! Five simple words that can either convey the attitude of a person eager and motivated to get something done, or a sarcastic way of declining a request based on it being either an uninspiring or unrewarding experience (or perhaps both).

Much of what we know about performance management comes from the behavioral sciences and the work of legendary psychologist B. F. Skinner. In case you missed that day in your Psych 101 class, basic behaviorism is built on the simple concept of providing a tangible reward–a piece of food in the case of experimental animals–in response to the correct achievement of some basic task (or, conversely, the withholding of a reward–or administration of a penalty of some sort–for failure to complete the task).

Pigeons, Teenagers, and Everything In Between

When we talk about the field of performance management–be it measurement, goals and targets, tracking and reporting, performance communications, back-end rewards, or the myriad of other “moving parts”  within the performance management process–we are really talking about elements that are at the core of managing human behavior.

While most of  us regard performance management techniques as a way to motivate our organizations and employees to achieve “peak performance” levels, the same techniques can be used in an infinite number of other areas, across both the work and personal spectrum. Remember, while Skinner’s subjects were originally pigeons, his techniques have been applied effectively in everything from corporate performance to the most basic of personal transactions with our children… and everything in-between.

…and Yes, Customers Too!

Recently, I’ve been giving a good deal of thought to how we can use these same principles in our relationships with customers. There are many things we do to encourage customers to behave in certain ways. Whether it’s  buying more of a product, maintaining allegiance to our brand, or other more subtle changes we seek in customer behavior (shifting to less costly billing and payment channels, moving consumption to more optimal places in our delivery system, increasing utilization of our automated inquiry channels (website, IVR, etc.), participating in recycling campaigns, etc.), the age old “behavior modification” techniques used by the early behaviorists, still present in most of our performance management organizations, are just as, if not more, important to our relationships and interactions with customers. It’s all about creating a line of sight between a desired outcome and the behaviors required to drive it, keeping that line of sight visible, and ensuring that all requisite parts of the process are in place to motivate and reinforce staying on that path and consistently hitting the desired target.

A few days ago, a close friend of mine who enjoys spending an occasional weekend in Las Vegas (something I know very little about, or at least wouldn’t  admit to if I did!), received, during one of these periodic jaunts, a loyalty card from a casino offering him certain amenities whenever he visited their property–usually free (or at least that’s the spin they put on it) dinners, valet parking, etc. Personally, I find it hard to see these loyalty programs as being of any great value, since I’m sure the rewards pale in comparison to how much casinos “fleece” their patrons. But regardless of how I view that industry and their programs, my friend seems to enjoy them. And, well, who am I to judge?

After visiting the casino a few times in 2011, he received a letter letting him know that he had reached a new loyalty level (again, one has to wonder about achieving a new loyalty level at a casino whose primary mission it is to take your money. But let’s not digress again). After quickly congratulating him on achieving this “new loyalty tier”, the program manager went on to describe how close my friend was to reaching the next level beyond his newly attained one.

I may not have all of my numbers exactly right, but it went something like this: “Congratulations on achieving our Silver level by earning 15,000 points! You’re now only a few steps away from hitting the Gold level. By earning an additional 900,000 points, you’ll enjoy all the benefits of Silver PLUS all the many new benefits reserved exclusively for our Gold members!” etc, etc, etc…

Sometimes there is not enough oxygen on the planet to describe how many things are wrong with a particular business practice. This was one of those times. But the letter alone did most of the damage. Whatever the expenditures required to get to the “silver level” (and I really didn’t want to know the details), simple math told him that he’d need to spend many, many, many multiples of that to even approximate the next level. After a good laugh, his response was: “Sure, I’ll get right on that!”

Motivating Loyalty-

The good, the bad and the ugly…

Loyalty programs all include features of this sort: tiers of benefits that reward buying behavior, incentives for climbing to the next tier, quantifiable measures and tracking schemes that let you know how you are doing on your progress, and all the communication required to motivate you up and over the “next hurdle.” It doesn’t matter whether the program is for frequent fliers, hotel visitors, or even banking savers (an alternative I would encourage my friend to consider). There is no doubt that such programs work.

What differentiates the good ones is not simply the presence of elements like measures, goals, and rewards but, rather, the range of “moving parts” within the PM process I alluded to earlier. For example, let’s look inside my friend’s experience. It wasn’t the lack of a measurable outcome or awareness of what he had to do to get to the next tier that created the breakdown, but rather the enormous gap between the tiers (where the target was set), its level of achievability, and the manner in which progress was communicated.

Sometimes the issue is as simple as managing distinctions between tiers and levels. For a person like me who travels extensively, upgrades, for example, are certainly important. But as airlines continue to consolidate, customers who might have grown used to being consistently upgraded now find that while they were once big fish in a small pond, they have now become average-sized fish in a much larger lake. Anyone caught in the consolidation of the United and Continental loyalty programs knows this first-hand. In fact, there are now more “elite” than “non-elite” fliers (usually by a factor of two) competing for that “special boarding” privilege (essential for getting dibs on very scarce and valuable carry-on luggage space). So for me, the boarding privileges have become more valuable than the upgrade itself. Simply differentiating between platinum, gold, and silver elite fliers in the boarding process would improve the experience of those with the highest travel frequency. Further distinctions (within the higher tier) would also help to create more perceived equity within the ever growing mass of frequent travelers when it comes to upgrades.

More often than not, the differences lie in more subtle application of the “moving parts” within the process. There is a principle most of us may remember from that Psych 101 course that deals with the specifics of reinforcement “schedules” (variable/fixed intervals, for example). While it’s nice to get “upgraded” every single time we exhibit the expected behavior, true behaviorists would tell you that is a clear path to complacency (besides which, the experimenter–or in our case, the program manager–ends up spending a great deal more than necessary in rewards in order to achieve a desired result). Whether they are right or wrong in this assertion is not the issue; market research can answer that. The real issue is that nuances such as this remain very much in play and should not be simply ignored or overlooked in a program’s design. Most of us can recall a time as a customer when receiving an unexpected extra (what we in the south call lagniappe ) did, in fact, generate good will and motivate improved buy behavior. Stan Phelps, a fellow blogger and someone I view as a “kindred spirit” in the space of marketing and CEM,  talks about this quite extensively on his blog “Marketing Lagniappe”. And while  he does not purport to be a true (native) Southerner like myself, he certainly gets the concept as well as those who hail from south of the Mason Dixon line.

Incorporating Performance Management into your CEM strategies…

Like any good chef, there are many ingredients that need to be mixed in the correct sequence, at the right temperature, and  presented in the right way to create that high-quality, positive experience. Same goes for designing our customer experiences:

• Are the incentives you’re offering ones customers even care about? How much time and energy are you wasting on deploying innovative tools that have more impact for you that they do for customers?
• Are your incentives easy for customers to redeem? .Small “point of sale” rebates are often have far more “relevant impact” than larger ones that require more customer effort to redeem (after adjusting for lower redemption levels)
• Do you rely on hidden tricks to manage program costs (e.g., points that expire, rewards that require supplemental cash payments, etc.) that can actually produce more negative that positive impact on customer experience?
• Are the measures you’re using easy and simple for customers to understand and use in tracking their progress to that next reward or level?
• Have you considered the effect of different reinforcement schedules? (Fixed versus variable intervals? Different types and quantity of rewards?
• Have you given enough thought to where program “targets” (rewards and tiers) are set?
• Are the targets achievable in reasonable amounts of time?
• Is your messaging and communication sufficiently compelling?

Clearly these techniques apply any time we are trying to convince someone to “jump right on it.” But in the world of customer experience, where competitive forces are always at play and differentiation is becoming more and more critical, it may just be the most important consideration in your product and program design.

-b

Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience with primary emphasis on Customer Operations in the global energy and utilities sector. Bob has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

2011- Year of the Squirrel

What 2011 taught us about strategic distractions, and their impact on business value…

A few months back, I remember having a good chuckle while watching a Jon Stewart parody on the Republican candidate field.  The monologue poked fun at the media’s tendency, during its seemingly relentless coverage of the leading candidate on that day, to completely shift direction the moment a new contender entered the picture.In this case, Bachman was the leader du jour, the media was the dog in the Pixar movie “Up”, and the part of the squirrel was played by none other than Rick Perry, who these days appears to be succeeding only at distracting himself.

“Squirrel moments” happen all around us, and with greater frequency than we’d care to admit. As flawed human beings, it’s easy for us to get sidetracked from what we should be doing, by some urgent new distraction that seems terribly critical in the moment. Yet most of us eventually manage to refocus, once we become aware (through our own cognitive skills or because a friend or colleague points it out to us) of how badly the squirrel moment has driven us off-course. Typically it is the speed with which we are able to re-calibrate ourselves that ultimately determines the degree of damage, if any, that is caused by the distraction.

Some “squirrel moments” have far reaching impacts…

But for organizations, the challenge of refocusing after a significant distraction is far greater. Unlike individual distractions, those in organizations often require refocusing entire workgroups, business units, and processes that may have strayed far from the core focus and strategies of the business. It’s a bit like comparing a fighter jet to a large commercial airliner. While both are capable of course correction, larger aircraft don’t react “on a dime” and require a lot more time and space to maneuver.  The magnitude of the corporate distraction, the breadth of areas it touches, and the duration of the distraction, are just a few of the variables that determine the organization’s ability to react and readjust quickly.

2011 offered numerous examples of companies adversely affected by a loss of focus.

• The enormous value that Netflix had created, based on a simple and straightforward product offer embraced by scores of customers, was severely jeopardized by the company’s ill-advised decision to migrate to a more complex, two-tiered pricing model driven largely by a short-term desire to justify an overinflated stock price. The outcome was both predictable and horrific, as customers departed in droves, destroying an enormous amount of company value in very short order.
• Bank of America, arguably one of the better banks in terms of customer satisfaction and experience, watched much of that brand value evaporate following announcement of a pricing move (its now infamous $5 charge for debit card use) that evoked a similar customer outrage. While perhaps necessitated by financial realities (debatable), its positioning, execution, and ultimate response were painful to watch play out.
• Research in Motion, maker of the Blackberry, whose loyal business following was predicated on its operational and reliability advantages, suffered a huge blow to its value on the heels of a long and poorly managed  network outage—a network on which it had based much of its service differentiation.
• Berkshire Hathaway, a company whose entire business is based on the prudent, sober, and wise investing of its founder, ended up the subject of one of 2011’s stories of financial impropriety–an insider trading scandal the likes of which we’ve come to expect from the industry, just not from these guys.
• HP announced another redirection of its product portfolio, and yet another shift in its leadership team–a true “squirrel moment” with a healthy dose of “been there, done that.”

S*** Happens! You just have to manage it…

Sure, one might argue, “bad things happen to good companies”, and in these and a myriad of other examples from 2011 there is certainly some truth to that. Sometimes, these blunders cannot always be attributed to bad strategies or failure to stick with a good one. Sometimes, it’s the tactical decisions that are “far removed” from the C-suite and its strategic decision making. Sometimes these decisions, as we saw above, are undertaken because of a financial necessity that in the short term might trump a marketing strategy.

But, by the same token, those seemingly small disconnects may, in fact, be symptomatic of the problem itself. While management may not be able to control ALL of the drivers that lead to negative consequences, effective development and MANAGEMENT of strategy can not only limit the damage caused by veering off course, but can play a very important role in course correction after the fact. For many companies the words “MANAGEMENT” and “STRATEGY” connote different, and often conflicting, disciplines. But for those successful at avoiding and responding to distractions, these are highly related and often inseparable competencies.

 Great strategy management is about the WHAT and the HOW…

So, how can you ensure that corporate distractions are kept to a minimum, and effectively refocus and re-center the business when they invariably do occur?

1. Define and clarify your business strategy — This sounds like motherhood and apple pie. It always does. But it remains the preeminent cause of breakdowns during times of distraction, because the strategy is either too complex to begin with, or it lacks sufficient clarity to engender the necessary alignment and commitment to continue keeping the firm focused in times of distraction. Your strategy is more than simply a restatement of a vision or broad ambition. It is a specific answer to a specific question: What do we need to do to ensure success within your existing business environment? One of Apple’s most effective demonstrations of strategic clarity was Steve Jobs’ insistence on collapsing their previously expansive product portfolio into four clear product families that would redefine its future. Clear, compelling, with an easily-understood line of sight to renewing the value of the business.
2. Do more than just communicate it — Management 101 preaches “communicate your strategy.” But communication alone is insufficient to create the alignment necessary to avoid distractions. One of the most rewarding aspects of this job is watching clients challenge ideas and recommendations (even from yours truly) based on an automatic and often deeply-felt narrative of how the suggested change(s) might conflict with their core strategy. For them, it’s more than just “talking points.” It’s a compelling narrative they have embodied through words and examples. Sure, these too can be misinterpreted occasionally, but just like a pilot who is expected to react with some degree of muscle memory, we must develop and nurture that level of alignment as a first line of defense against corporate distraction. Vision, values, and strategies. They all need to be seamlessly integrated within a crisp, clear, and compelling narrative.
3. Build and use the right navigation systems — When NASA launches a probe to Mars, it must travel undistracted for about nine months in order to hit a fast-moving and very small target (the red planet). Even the slightest and briefest of external forces can cause the probe to miss the planet by millions of miles. Having the right navigation systems and a network of alerts and course-correction mechanisms is crucial to a mission like this, and it is just as critical to a business like yours. In business, such technologies and processes comprise your integrated performance management system, and they should include the KPI’s of the business, the network of leading and lagging business metrics we must monitor, and a clear understanding of the relationships between them.
4. Scenario and contingency planning — Made popular by companies like Shell years ago, the discipline to do this, and do it well, has fallen out of vogue. Not sure why, other than what I heard from a client a few years back…that it “forced us to admit that we might have the wrong strategy”, or that it “would distract us from adhering to that strategy”. That’s as much hogwash today as it was when I first heard it, and failure to implement a rigorous scenario planning process is, as ever, tantamount to sticking your head in the sand. If subjecting your strategic plans to that level of scrutiny adversely affects your ability to execute the strategy as designed, while being agile enough to react and learn from mistakes, then you either have the wrong strategy, the wrong leadership, or both.
5. The ability and agility to recover from distractions — Unlike the dogs in “UP”, we don’t have masters to yank our collars or order us back into focus. (unless we work in a purely autocratic environment). What we do have is the ability to learn and react. It helps if we have a contingency plan with automatic responses. But we must also have the ability to recognize when something is not working, and the agility to put that learning in motion quickly and effectively.

 History doesn’t have to repeat itself…

2011 wasn’t the first time we’ve seen these types of blunders. And it most certainly won’t be the last.

We all remember the Tylenol scare of many years ago. Drug companies like J&J, who exist largely at the mercy of safety protocols and regulations, can easily be crushed by such events. But J&J’s ability to identify and react to the crisis with agility prevented what could have been an historic business failure. Their “distraction,” which arguably could have been anticipated, was kept fairly well contained.

Others weren’t so fortunate. The Exxon-Valdez and BP-Macondo debacles are two great examples of this. Safety, which should be a core strategic underpinning for any company, but particularly those in this industry, in large measure fell victim to distraction. But, in both cases, it was the lack of a coherent, actionable response strategy that kept business value flowing out of the pipeline/tanker as fast as the oil.

If we have the right blueprint for managing strategy, we can limit the number of distractions, identify and react appropriately when they do occur, and respond with agility and effectiveness to keep adverse consequences to a minimum.

-b/b

Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience with primary emphasis on Customer Operations in the global energy and utilities sector. Bob has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

Brian Kenneth Swain is a Principal with onVector Consulting Group.  Brian has over 25 years of experience in Marketing, Product Management, and Customer Operations. He has managed organizations in highly competitive product environments,  and has consulted for numerous companies across the globe. Brian is an alumnus of McKinsey & Company, Bell Laboratories, and Reliant Energy, and is a graduate of Columbia University and the Wharton Business School. He can be contacted at brian.swain@onvectorconsulting.com. 

Service In the Eye of the Storm…

Stuff Happens…

We’ve all been there.  The cancelled flight. The lengthy power outage. The inconvenient disruption in internet communications. Higher than normal dropped cell calls. You’d think that whoever is calling the shots on the weather patterns lately would know the magnitude of  chaos they are creating in our lives. It’s enough to drive you nuts!

God grant me the serenity to accept the things I cannot change…

Hurricane Irene, though relatively tame to a gulf coast native like myself, once again forced me to reflect on how storms like this can disrupt life’s little conveniences. On the one hand, it’s quite amazing how stressed and freaked out we (including yours truly) get with what are, in the end, minor inconveniences–many of which would be regarded as luxuries elsewhere on the planet.

Let’s face it, we’re all human, and while we get as frustrated as the next person when inconvenienced, we all are capable of realizing and accepting that certain events simply fall into the category of “S**T HAPPENS”. While nobody likes to wait on hold for two hours to talk to an airline, most of us “bite our tongue” when talking to the agent because we know they are probably as stressed, if not more so, than we are because of what they’ve had to endure during the time we were on hold.

…and the wisdom to identify idiocy!

On the other hand, it is equally amazing, given the advances in service capabilities and technology, that we are unable to avoid, or at least help customers to tolerate, the downstream impact of these events. Consider the following examples from last weekend’s flight mess caused by multiple airport closures in the Northeast.

• Text message informing a passenger of a canceled flight fifteen minutes after the last alternate departure
• Text message instructing the passenger to CALL the airline for additional information, exponentially amplifying an already uncontrollable workload/call volume
• Call-in number with an automatic message that says essentially, “we have too many incoming calls, call back later.” Really? A six-billion-dollar Fortune 100 company in 2011 with a message like THIS?
• Call queues (for airlines who, under normal circumstances, pride themselves on differentiating between “tiers” of frequent fliers”) that suddenly lose all such distinctions in the midst of a crisis–with hold times from two to three hours throughout the weekend
• A website containing little if any useful information on the situation at hand, self-help suggestions for what I could do in the meantime, or anything else that might have alleviated the stress
• Complete absence of any visible “behind the scenes” or back office process to re-book flights automatically (my reservation was essentially cancelled leaving me to re-book myself with no apparent prioritization for my loyalty status
• A workforce that, despite all their effort and hard work, (and I do mean hard work because they had 200 reps working what I estimate to be at least 300,000-500,000 displaced passengers), did what???

Crises are the real MOTs…

There has been a lot of talk in recent years about “Moments of Truth” (“MOTs”) when it comes to service interactions. We often think about MOTs from a transaction standpoint, e.g.,when a customer calls to connect service, ask a billing question, get updated about a service interruption, or simply to complain about an inconvenience. For me, though, the real MOT is what happens in a true moment of chaos or crisis–when the customer’s daily life is truly interrupted, i.e., when they actually expect things to suck. It’s at that moment, when natural optimists become pessimists, that one of three things happens:

• Customers’ bad expectations are realized, either creating or reinforcing a perception that when unforeseen events occur, things will inevitably become hopeless, i.e., a feeling of general resignation.
• Lowered expectations become their worst fears…and you become recognized as the company that falls apart rather than shining in the face of adversity.
• They are completely “WOWED” by the significant, yet counter-intuitive, responses they see from you at a moment when they have every expectation in the book for not doing so.

For most of us, it’s typically the first experience, and we move on with our lives, disappointed but not surprised. We remain only marginally engaged, and perhaps, when the next opportunity presents itself to switch to another supplier, that new supplier may have the proverbial “edge”. But for companies who really understand these dynamics and strive for true loyalty, they know the power of the third outcome above, and the value that small, but memorable, responses can have in these real MOTs.

What if…

…I had received a text message telling me that an adverse weather situation was unfolding and that by responding “helpme” to their text, they would search for available options and contact me to see if I wanted to initiate any of these two or three alternative plans? What if the message I heard when I called (instead of  “We’re busy. Call back later.”) had directed me to a website that contained actual useful information (even if nothing more than “We’re at the mercy of the weather and the airport, and we won’t know anything until tomorrow at 2 p.m.”)? What if instead of my reservation being cancelled, they had proactively re-booked me on another flight? And what if (perhaps for only their million-mile customers) they had actually offered me some REAL solutions, like, for example, flying on a different airline or going through an unconventional (perhaps even inconvenient and uneconomic) routing.

Insanity=

Doing the same thing over and over again, and expecting a different result…

We all understand crises and uncontrollable events. We all know that we cannot blame an airline or a power company for things like earthquakes, weather, some mechanical failures, and the like. And we know, as well, how inappropriate it is to blame the people who are doing their best in a bad situation. But I would argue that in a time and era where margins are thin and everyone is looking for new ways to differentiate themselves…and particularly in a time when customers have been conditioned to expect the WORST from us…that is the perfect time to step up and offer creative and inspiring solutions.

Some of these may be BIG things–the kind of heroics you hear about in commercials, performances that border on the uneconomic and, perhaps, unrealistic–solutions that would drive a company to the poorhouse if they were truly institutionalized (Can anyone forget the FEDEX driver who couldn’t get the drop box open, so he lifted the entire multi-hundred-pound box into the back of his truck?). But I would contend that it’s the little things that mean the most–the things that show you’ve had the FORESIGHT to understand how a customer is truly affected in a crisis. ANTICIPATE your customers’ most likely state of mind in these situations, and develop small solutions that can, in fact, be INSTITUTIONALIZED.

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

A CPO’s Declaration of Independence

At its core, the word “independence” means being free of outside control or influence.

We celebrate independence from many things: from the oppressive control of people and governments, to simply becoming independent from our once protective or “controlling” environments.  Every 4th of July, we in the United States celebrate our national independence from prior years of British control, and its declaration of that freedom in a charter that would  define the very freedoms and liberties we in the US enjoy today. Most often, when we celebrate “independence,” whether it is as a nation or as individuals, we are celebrating a moment in time, or a phase when that independence is either declared, demonstrated or both.

But there is another type of independence we should also celebrate, i.e., the act of distancing oneself from the (isolated, blind, and often inappropriate) influence of another person or organization’s actions. It is more of a “state” that an organization exists within, and one that defines the boundaries of its existence, than it is a single event or moment in time. Such is the case with most corporate oversight and regulatory functions that have emerged in recent years.

As an aspiring young auditor over 20 years ago, I remember this type of independence being drilled into my head more than any other directive in my early career. It’s  a principle that has shaped both external auditing as a discipline since its inception over a century ago, and one that has defined internal auditing now for decades. It is also a principle that today defines most common forms of regulatory and oversight functions, particularly when issues like safety and security are involved. But these functions, while sometimes viewed as oppressive in their own right, were initially set up to prevent inherent conflicts of interest that arise in the absence of “common sense” checks and balances.

While many would call these functions a “necessary evil,” their independence and objectivity gives us comfort that someone else is watching–someone who does not necessarily have an “axe to grind” or a “dog in the race.” And if positioned correctly, this independence can also be a powerful enabler for the business by providing outside and unfiltered information and perspectives that are not easily observed by day-to-day operating management. Learning how to create that balance is critical to any function performing in that type of advisory or oversight capacity.

Today, the role of the Corporate Performance Manager, or Chief Performance Officer (CPO) as some companies have positioned it, is one in which the concept of independence and objectivity is becoming increasingly critical. Just as auditors have had to weather the perception of being the “bad guy,” so it is as well for the CPO. In fact, many companies that have deferred making the decision to have a Corporate PM function, have done so to avoid creating another oppressive layer of control, and avoid the animosity that might get created between operating and corporate management. But it is these organizations who sacrifice a very significant benefit that a Corporate PM function can deliver. I would submit that it is not the presence of independent advisory or oversight functions that create these problems, but rather the way they are set up, chartered and managed that does so.

So how does this sense of “balance” get created?

Here are some common traits of successful Corporate Performance Management functions that have been able to use the principles of independence and objectivity in a way that enables more collaborative success, while providing the healthy oversight and control that is desired by the firm’s Board, Officers and Shareholders:

• Organizational Independence and Visibility- Just as most Audit functions have a corporate responsibility to the CEO and Board of Directors, so it is the case with most successful corporate PM organizations. By the very nature of their reporting relationship to the CEO (or equivalent), they eliminate the very conflict of interest with specific business functions that can compromise more integrated and synergistic solutions from occurring.
• Strategically Balanced– Their charter is driven by the Firm’s Balanced Scorecard, rather than limited subsets of operating metrics that may yield more limited operational successes at the expense of the more balanced set of business outcomes desired by shareholders
• Non-Threatening- While their ultimate customer is the CEO, they view operating executives as a key enabler of, and partners in, their collective success. They do this by addressing issues and performance gaps in a way that makes the operating unit become successful in the eyes of the Firm’s C-Suite and Board, rather than their own visible value add.
• Removing Barriers- One way they become viewed as genuine partners with operating management is that they use their corporate visibility and influence to break down barriers (like corporate politics, access to information, and cultural roadblocks) and unlock value that has often eluded operating management.
• Inclusive and collaborative– Good PM functions are inclusive, not only with respect to their approach, but also in their delivery tactics. They often staff their departments with people from the operating units themselves (using short term and rotational assignments), increasing their operating credibility and ultimately developing real PM champions across the business.
• Facilitative– These functions are far more facilitative in their approach, rarely performing direct roles in developing conclusions and implementation. While results are often the same as those they might have developed themselves, playing a background role and “leading” the operating staff to the right answers ultimately strengthens operating ownership for the conclusions and changes that ultimately emerge.
• Share the Joy– Good PM organizations are often generous in giving credit for operating changes directly to operating executives. While they are successful at tracking corporate value delivered by the PM process, the credit for the implemented changes is often given directly to those who implement it.

The "bad cop" perception that is often ascribed to corporate oversight functions will never get eliminated completely, and will continue to be a factor as Corporate PM groups proliferate across the industry.  By its very nature, there will always be times where their responsibility to the CEO and Board will result in the development of recommendations or the presentation of information that benefits the collective whole, rather than the specific interests of a particular business unit. But more often than not, the type of synergistic value we are looking for can make heroes out of operating executives while still benefiting the collective Enterprise.

So on this Independence Day, let’s remember that we can still preserve the independence and objectivity our profession requires, while being a strong force that liberates and frees our operating executives to reach their goals and ultimate potential.

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

When Benchmarking Gets “In the Way” of Good Performance Management…

Nearly three decades after benchmarking came on the scene, companies still claim it to be an integral part of their internal performance improvement processes. But few would argue that its value to the business is now well below where it once was. And sometimes, it actually gets in the way of identifying improvements and driving change.

There is not a client I work with who doesn’t have their shelves lined with volumes of benchmarking studies and reports. Nearly every industry group produces some kind of comparative metrics report for its members. And every industry has those companies that we might consider to be “benchmarking addicts” — those who participate in nearly every study they can in the spirit of demonstrating their performance improvement “commitment” and “prowess” around driving change. Ironically though, it is rarely these companies that define the top tier of their respective industries in terms of real performance.

Here are some inherent flaws with benchmarking today:

• Benchmarking is largely “point-in-time” driven and retrospective in nature. While this can be useful in “stress testing” targets and defining high-level gaps (“low-hanging fruit” or “quick wins”), it largely ignores the trends or shifts in metrics that are far more critical to identifying and driving course corrections.
• Comparative studies almost always focus on lagging versus leading indicators. This often leads to a culture of “managing through the rear-view mirror”. It also fixates the organization on measuring things for the sake of comparisons, when some of those metrics may have have  become irrelevant or even obsolete.
• Benchmarking focuses on “common metrics” versus those that may be critical to you, but perhaps not everyone. It’s okay to have a few metrics you routinely measure for the sake of comparison, but when these metrics begin to define your scorecard, it’s time to recognize when the “tail is actually wagging the dog”.
• Comparisons are done for many reasons, not all of which are performance driven. More often than not, benchmarks are used to identify strengths for the sake of communicating to shareholders, regulators, or sometimes even internal Executives. They’re sometimes even a vehicle for rationalizing and justifying poor performance, often confusing the organization and sending all the wrong messages.
• Benchmarking often leads to “group think”. We look for commonalities and like to follow the “herd”. Let’s face it — It lowers our risk to say, “if company x is doing such and such, then we should be doing it too.” But it’s sometimes the anomalies in the data that can show us where real innovation is happening. And in the benchmarking world, anomalies are often dismissed as outliers and suggestive of data problems rather than solutions.

These are just a few of the many ways that benchmarking “gets in the way” of real change, and there are many more where these came from.

As with anything we do long enough, it’s easy to get into a corporate habit of doing something and forget WHY we are doing it in the first place. So if you want benchmarking to be a value-adding component of your performance management process, here are a few things you can do:

1. Realize that benchmarking is about you, and not about others. It’s fine to use comparisons to help you better understand yourself and your performance weaknesses and perhaps “stress test” your targets, but when you start using benchmarks to rationalize and justify existing performance and actions, it’s time to refocus your thinking on you and your company’s improvement goals and the learning benchmarking can provide.
2. Determine where benchmarking fits into your overall performance management process, and use it that way. In cases where benchmarking is done for some other reason, like communicating to stakeholders or regulators, call it what it is and keep it at arms length from the game of real performance improvement.
3. Focus your benchmarking on the measures that matter to YOU rather than a consultant’s peer group or client base. More often than not, it may be better to do a small internal project to gather that competitive intelligence, than it would to consume resources to force-fit yourself into a large peer group.
4. Orient your benchmarking around learning and innovation, rather than simply “following the herd.” This will sometimes cause you to look at different metrics, and look at them differently. Anomalies will become a source of new innovation rather than simply a data problem to discount.

Benchmarking can be a great tool for defining, catalyzing and inspiring change in your organization. Take a hard look at how your organization uses these comparisons today and be honest with yourself about where this supports or hinders your performance management process. Make benchmarking part of your performance management process rather than an end in and of itself.

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

Jump!!!- How to “ignite change” within your organization…

Using the “nightmare scenario” to catalyze change…

Since I started my career 22 years ago, I’ve always been intrigued by the use of the proverbial “burning platform” as a motivational tactic for catalyzing and effecting change within organizations. Originally, the “burning platform” was simply a metaphor used for a looming crisis that required a change in organizational thinking and behavior. More and more, however, these “burning platforms” are becoming more literal, making the consequence of “status quo” even more real and threatening to those who are on it.

There is no shortage of cases in which the threat of REALLY BIG negative consequences turned out to be an effective means of initiating major change within organizations, cultures, and individuals who were otherwise operating myopically, blind to many of the realities around them. We saw it in the 1960’s as MLK used present inequities among races, and what the future would look like if left unattended, to inspire what would become a successful civil rights movement that would change US and global principles, policies,  legislation, and ultimately cultural behaviors themselves. Auto companies used the threat of overseas domination as a way to improve productivity and quality, and continue to use it as a way to sustain performance.

“Burning Platform” examples: Past and present…

We are also seeing it quite literally now, as nuclear companies have used past examples of Three Mile Island, Chernobyl, and now the as-yet-unresolved crisis at Fukushima, as a way to renew the industry’s focus on safety. And of course, all major oil companies are using the consequences of the BP spill of 2010 as a catalyst for driving major improvements in operational safety. The latter is a particularly good example, as on the day of the explosion itself, the company was celebrating a long string of days without a recordable safety event!

Late last year, Nokia’s new CEO Stephan Elop  used the same tactic to catalyze the need for some dramatic new thinking within his organization. To amplify the importance of responding quickly to what appears to be a competitive nightmare scenario, he sent a memo to the organization comparing its circumstances to that of a “burning platform” surrounded by the “icy waters” of the North Sea. In this case, survival meant risking both a fall and survival of icy waters in order to avoid the certain death of being consumed by fire. Talk about a wake up call!!!

Even humanity in general uses the “burning platform” as a way to inspire vigilance and action around things like spirituality and lifestyle. Most are aware of Harold Camping’s prophesies around the projected May 21st “Rapture” of Christians worldwide and the October 21st end of the world as we know it (Sorry if that puts a damper on anyone’s springtime plans :), but hey, I’m just the messenger!). Regardless of your religious background, or whether you “buy into” this or the myriad of other “end of days” proclamations, prophesies like this one certainly get our attention, and remind us of the importance of staying in close touch with our maker–lest we risk the ultimate in “burning platforms.”

Nevertheless, most of the successful uses of the “burning platform” tactic of motivation, particularly those in business, are based in fear–fear of losing customers, fear of losing market share, fear of financial collapse, and the myriad of other risks  associated with not responding fast enough, or with enough magnitude to avert otherwise disastrous consequences. And while most leaders, like myself, would prefer to use more positive oriented motivation and reinforcement to accomplish our vision, the “burning platform” (threat of crisis) often has a more pronounced catalyzing effect, and as a leader, it is highly likely that you will be forced into using it at some point in your career, assuming you haven’t already.

Guidelines for developing your “burning platform”…

If you are going to use the “burning platform” tactic effectively, I believe there are a number of factors that should influence and guide your approach:

• Make sure the platform you choose is real, credible, and significant. — Focus on specific threats or risks to your business that cannot be dealt with or averted using existing processes, practices, or people (e.g., a specific safety risk that if unmanaged would sink the company, or a productivity gap that is 40% worse than your top competitor, is better than a repeated message that sales are down, costs are up, and profits are hurting).
• Make sure you offer a “roadmap” or “pathway” for success that is achievable (assuming one exists)— Everyone has heard the adage “accept the things you cannot change…change the things you can …and have the wisdom to know the difference.” There are two implications of this in creating your burning platform. First, there is nothing worse than a dismal scenario that has no way of being averted, as that is a sure path to apathy and hopelessness. Assuming there is one (if there is not, you may want to think about jumping ship), make sure that you help your staff see it.  None of us are capable of changing the “end of days” scenario described above (should it prove out), but we can change our behaviors, approach to relationships, and other facets of our life.
• The “burning platform” doesn’t always have to be apocalyptic in nature. — You can be just as successful defining a future scenario that might open possibilities for you or your organization to “break out” or leapfrog competitors. Our visit to the moon was a good example of where we used external forces and opportunities to inspire a very positive outcome.
• A “compelling narrative” is essential. Almost every good example of a “burning platform” tactic being successful begins with the ability of a leader to clearly and compellingly state the case for change. At its basic level, this is the ability to be a good storyteller, in a way that vividly paints the picture of the crisis at hand, shows the vision for success, and clearly identifies what must change, all while respecting the history and past successes of the organization.
• Track and report progress/establish consequences — If you do a good job of identifying a real and credible threat to the business, and articulating a pathway to averting or navigating the risk, then you should be able to establish some good metrics for reporting success. Think of these as milestones or way-points on your journey. Report these frequently so that they enable critical course corrections. You’ll want to make sure you hold yourself and those on your team accountable. Again, if you’ve done a good job of defining the threats, risks, and path for success, then improvement in the business should allow for ample rewarding of those who contributed the most.
• Don’t overuse the tactic. — There is nothing worse than a leader who constantly “cries wolf”. All of us have had bosses who live in a constant narrative of “the sky is falling.” They repeatedly send the same message over and over again, and when subordinates stop listening, they ascribe it to their staff “simply “not getting it”, when in fact what has happened is that they have become so “numb” to the message that it has the reverse effect, i.e., of creating complacency.

A “burning platform” can be a very effective strategy for managing change within an organization, regardless of the business type. But doing it incorrectly can create hopelessness and a feeling of apathy across the team and put the organization in worse shape than when it started.

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

Customer Engagement and Efficiency- Are these conflicting priorities?

The Challenges of Funding a  CEM Strategy…

A few weeks back, I was talking to a client about their latest strategies to enhance what is now known commonly as “the customer experience.” And like most companies that are working tirelessly on driving their customers toward higher levels of satisfaction, delight, and our latest aspiration, “engagement,” this company was going through all the common challenges of funding their new Customer Experience Management (CEM) strategy.

But also, like many others, funding their CEM strategy is meeting some pretty big resistance from their CFO and others who are trying to make corporate “ends meet,” especially in this economic climate. More and more, these two perspectives are clashing, not because the organization fails to value investment in Customer Service (CS), but more so because the impacts associated with that those investments are often less direct and less tangible, at least compared with the realm of immediate cost and productivity savings that produce faster (albeit not always sustainable) payback to the bottom line.

The Cost/ Service Trade-off: Myth or Reality?

For over two decades of working in the Customer Operations arena, I’ve heard clients invariably revert to the “perceived” trade-off between customer service levels and cost savings or efficiency efforts. That is, the notion that there is an inverse relationship between our ability to improve service levels and our ability to capture CS related productivity and cost savings. And for a long time, the data supported this notion. But as technologies improved, and companies began to increase investments in CS-related technology, tools and process changes, select companies started to prove  that notion false by demonstrating the existence of both high service levels and low cost at the same time–companies clearly worthy of the term “myth busters”.

Yet despite all those great examples from the 90’s, we are now seeing many return to the proverbial “trade-off” as a reason for deferring further investments in their CS infrastructure. Make no mistake, there are clearly companies that are pushing the envelope of customer delight, and perhaps even engagement, but more often than not, investments in CEM, and even critical investments in basic infrastructure, are once again hitting the funding wall.

Some of this is clearly driven by the current economic climate. As a CEO from one of my energy clients said recently, “We haven’t given up on CS. But these investments are discretionary, and right now we are struggling to ‘keep the lights on'”. And, while on the surface, this may provoke emotions of heresy from those in highly competitive markets, it’s hard to argue with financial realities. At one time or another, most CS executives, regardless of industry, have encountered this same argument from their C-Suite executives.

Unfortunately, for some, the lack of investment in that infrastructure has created a bit of a back-slide in performance, creating the question of whether we are back to the days of the proverbial trade-off.

Reversing The Course…

As with most things in life, the cup can be either half empty or half full based simply on the lens through which we are looking.

Sure, we all want to delight our customers and make them happy. But from a financial perspective, there is always an ROI at play, and it’s not always easy to establish a causal linkage between that “added delight factor” and the bottom line. Hence the conflict.

But this assumes we are trying to impress, delight, or otherwise “engage” the customer for the sole purpose of selling more of our product or service. And that is clearly part of it. But again, at the risk of offending our hardcore sales and product advocates (of which I am one), I would assert that there are many other reasons for having an engaged customer that go far beyond the next product sale or any direct influence on buying behavior at all.

Beyond the Obvious…

From my perspective, “Engagement” is about changing the overall predisposition of a customer from one of negative predisposition or neutrality, to one of positive engagement that is leveragable in some context. That context could be higher sales, repeat business, or Word of Mouth (WOM) referrals, but it could also serve a variety of other purposes.

One of those purposes is cost savings. What?

That’s right, cost savings.

Over the past several years, we’ve completed a variety of assignments that were geared to identifying efficiencies where the mandate was “zero degradation to Customer Satisfaction”. Not an insignificant challenge. Especially when you consider that most companies have explored every way under the sun to drive more productivity out of their workforce, and have automated just about everything they can automate. And in some cases, these efforts have in fact degraded service level.

But many of those changes were inflicted on customers in a “push fashion”. Sure we’ve made tons of good changes in everything from local office closures, to call center automation improvements, to web interaction, but many of those changes were “pushed on the market” regardless of the level of satisfaction or disposition it happened to be in at the time. Yet we still wonder why the acceptance rates on what may appear to be wonderful customer options are at levels well below their potential. Experts claim that something as basic as “paperless billing” should be hitting 50-70% saturation in the next 3 years, but most of us are only at a fraction of those levels. But to me that is not surprising, given that we have not yet engaged the customer who we are asking to accept these changes. At least not in the spirit of how it is defined above.

Engagement for the Sake of Cost Reduction ?

Just for a second, put on your CFO hat and consider the following argument.

Cost is a product of both efficiency and transaction volume. We can decrease cost per transaction by 5,10, or even 20% in the form of cost-per-call, cost-per-bill, cost-per-payment, and the litany of other transaction types we offer. But the large majority of cost still remains.

Now think about the other side of the equation. Transaction volume. Different story entirely. When we eliminate a transaction, be it a printed bill, a mailed payment, or a call to the call center, we eliminate 100% of the cost. Looking at it this way, there is no question where our focus should be. And looking at the potential that our recent advances in technology could have on enabling these reductions in transaction volume, it’s rather amazing that such a large part of our focus is still on operating and productivity gains.

On this basis, and given the potential that exists in the workload dimension alone, it is conceivable that savings of 30, 50%, or more are possible, and go well beyond what we would ever consider from mere productivity gains.

It all starts with Impacting Predisposition and Behavior…

Given the impact of workload on bottom line, why wouldn’t that become our primary focus?

Perhaps it should be. Or at least one of our primary goals. But haphazardly looking for where we can drive customers to self-service channels without a clear strategy will get us right back to square one. The “win win win” (CCO, CFO, and Customer) if you will, is only achievable if the levels of potential I describe above are fully realized, and accomplished in a manner that leaves the customer satisfied and engaged.

Engagement is about changing customers’ predisposition from negative or neutral to positive and engaged. Once that is accomplished, there exist numerous ways to leverage that engagement, including getting the customer to willingly shift the nature and frequency of their interactions with us, thus decreasing transaction volume. But that is only the tip of the iceberg, as the companies mastering this dynamic are finding out.

But it all starts with the lens we look through.

So next time you are faced with hitting that infamous “funding wall”, or get challenged on the basis of your new CEM strategy, think beyond the obvious.

-b

For more on driving Customer Excellence through combined efficiency and service level focus, see the folloowing posts on EPMEdge.com . Related articles include:

• Lagniappe, Purple Gold Fish, King Cakes and Customer Delight!
• The Mythology of (the customer) Apology
• When Did “Common Sense” Go Extinct from the workplace?
• To “Meet or Exceed” Customer Expectations? The answer may surprise you…
• A Recent Rant – Rare but necessary
• Putting the Customer back into Customer Service
• The Primary Fuel of Customer DISSATISFACTION
• CSAT-The Bigger Picture
• First Things First- Process BEFORE Technology

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

What a good preacher can teach us about accountability…

iPads, Insomnia, and Podcasts…

Sometimes, when I have trouble sleeping, I will find a good podcast or ‘sirius talk’ channel that looks interesting, and let the drone of the narrator “read me to sleep”.

I don’t know what it is about “talk radio” or short podcast subjects that do the trick for me (instead of music, for example), because some of the topics are really interesting and engaging and would keep most normal people “awake” rather then send them off to sleep. But not for me. 30 Minutes into one of these podcasts or talk shows, and I’m out like a light.

Who Knows. This phenomena probably has to do more with our childhoods, when we were “put to sleep” by our parents reading us  a good story book, than it does the level of topical ‘engagement’ of the content itself. But that’s a subject for another day, or perhaps my therapist.

Now, sometimes when you download a podcast, there is not too much background available on the host, but that usually doesn’t bother me because the vast majority of them on itunes are pretty much free. So, if it’s a bad one, so be it- it’s still usually enough to put me to sleep through the sheer value of their mindless droning. Last night could have been one of those nights.

Last night, however was about the content. I found a podcast dealing with the topic of “personal change”, something near and dear to me because so much of the consulting work I do involves cultural alignment, behavioral change and leadership skills. Invariably, all of those are in some way dependent on PERSONAL change, often of significant magnitude.

Rapture, repentance, and judgment day…

As the podcast opened,however, it was clear that I was in for a surprise. While the topic was “personal change” (which we all know can span a broad array of angles), this one had what one might call a “spiritual bent” to it, which clearly was not evident by the podcast icon and description.

Although it was not what I was expecting, I did listen on. After all, who can’t resist a little advice from a good “preacher man”!

As I am fading off to sleep amidst his messages of raptures, repentance and judgments, the word “ACCOUNTABILITY” popped out of my ear buds like a shot in the dark. And while it probably was his intention to pique my interest will all of his other words of prophetic wisdom, it was the word “accountability ” that hooked me.

Now, if God is reading this, I don’t mean to say that I didn’t internalize ALL of the other parts of the sermon. I LISTENED TO ALL OF IT!!!” It’s just that the subject of accountability is one that I have been working with many of my clients on currently, and so the mere mention of the topic grabbed my attention just A LITTLE more than the “end of days” stuff. But that was for one instant, until I returned to the rest of the sermon, at which point I paid perfect attention. (Ok- bases covered with God- check.)

What “The Preacher” says about accountability…

Good preachers have a few things in common. One, they are charismatic speakers. Two, they are usually great storytellers. And three, they have an uncanny ability to translate complex principles into very simple messages. So what was his simple message on the subject of accountability? Just tell someone!!

That’s right, tell someone. Such a simple act. Yet such powerful implications. Here was his four step process to accountability:

• Make a decision to make a commitment
• Set a goal
• Write it down
• And tell someone

Now before you conclude that it’s not that simple (and I am not suggesting it is), just think about this in various facets of your personal, spiritual and work life. Heck, think about something as simple as exercise and weight loss (yet another topic close to my heart- literally!). I know for me, the only time I take that seriously is when I do in fact ‘tell someone’. I don’t know exactly why that works, but it does. Probably, it has something to do with someone else “watching”. Or perhaps it is because you feel a commitment beyond just yourself. Whatever the reason, I find that it works.

It also works in other areas of my life. When I commit something verbally to my kids, it means more than just a superficial personal “intent”. Same with my spouse. And truth be told, as a “good Catholic” (subject to debate, I suppose), when I make a confession to a priest, I take the commitment of “doing better next time” more to heart, than if I just made that same commitment to myself in passing.

I think”writing it down” certainly helps too, since it is now part  of “recorded history”, and something you can go back to and look at. It becomes tangible.

Livin’ “The Gospel” in business!!!

Even if it’s just inside your own sandbox…

As I think about this in a business context, specifically with respect to performance improvement, it all makes sense, doesn’t it? I can’t tell you how many times those “personal change “rock-stars” (from Carnegie  to Covey) have preached these same principles in their books on ‘achieving success’, ‘positive thinking’, and the broad array of topics they wax so eloquently on. And no doubt, every consultant (including your’s truly) has developed some methodology for driving accountability and change that include these basic four steps in some way, shape, or form.

I know many of you are working on driving accountability into your business cultures, and have one point or another, been involved in that type of multi step, multi phase, “journey of change” that was no doubt complex. And for many of you, some level of reward was received from those efforts. Change management programs do work, and with good leadership commitment, can really mobilize and cement long term improvements to a results oriented and highly accountable culture across the business.

But there are other times, when a manager just wants to simply motivate an employee, change the attitude of a team member, or the shift culture within a small workgroup. But instead of moving ahead in their little “patch of turf”, they often get caught up in the narrative of “it’s all about leadership” and the inability to change things from within unless “the top dogs” are behind it. That’s unfortunate, because change can happen in small pieces if the managers of those parts of the business understand the simple behaviors required to catalyze that change.

So before you conclude that reaching an new or ambitious goal is not achievable with your current team and cultural environment, give the preacher man a chance, and try out his 4 steps. Make the commitment. Set a goal. Write it down. And tell someone.

Then come back in a few weeks and see if anything has changed. You might surprise yourself!

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

SM Metrics- Getting beyond followers, klout, and social butterflies!

More Metrics Insights- Really? Haven’t we had enough?

I’ve been following all the “buzz” over the past week from #SXSW and now #eMetrics regarding the development, reporting and use of “metrics” in Social Media (SM) space. Quite interesting dialogue to say the least.

For some of you, particularly those who don’t live and breath Social Media, all of this may have turned into “white noise”, as this weekend appears to have exhausted just about every angle on the subject of SM metrics that we could possibly explore. But  fear not! As another week kicks into gear, there will no doubt emerge a new wave of posts and blogs on the very same topic.

But I must admit, that all of this “metrics talk” does strike a chord with me. After all, having spent nearly two decades in helping company leaders and managers get their arms around business metrics, and the broader discipline of performance management, you would expect my ears to jump up at the word “metrics”! (I know…sad but true). And while SM is not an area I have spent an enormous amount of time studying or participating in from “the inside”, I am finding that many of the same principles I use with my “corporate clients” and  very much “in play” for this new and ever evolving market.

Stepping outside my “sandbox” …

While my life does not revolve around advances in SM, I have become what one might call a “steady  user” of it. From my evening “blogging” hour, to ongoing “check-ins” via Twitter, Facebook and LinkedIn; I would confess to spending at least 10-15% of my ‘awake time’ interacting with online friends and colleagues.

Of course, like many of you, Social Media (which for me includes my morning time with my Pulse reader scanning news and blogs that I monitor) has replaced the time I spend reading newspapers, magazines and “industry rags” (in fact it’s become much a more efficient medium saving me lots of time and energy). And those ongoing “check ins” that I initiate, usually occur when I am either ” restricted” (cabs, airports, etc.), between tasks, or otherwise indisposed (I won’t elaborate on the latter- you get the idea).But the “blogging hour”… that is something separate for me, and while I do enjoy it and it helps me unwind, I also recognize it for what it is- a personal and professional investment in my own development.  So yes, you could say that SM should be important simply because of the 15% percent of my day that I rely on it for.

But for me, it goes a little beyond that, especially now that the conversation has turned to metrics, and the broader issue of managing SM performance and results. Ever since I got into the Performance Management discipline years ago, I’ve been a strong believer and proponent of finding ideas and insights, wherever they occur (different companies, different industries, different geographies, etc.), and applying insights to current challenges within our own environments. Some would call this “benchmarking”. Others may call it good learning practices. For me, it’s not only common business sense, but a core set of principles that I live and manage by. And for many like me, it is the basis of any good Performance Management system.

So it’s only natural for me to observe what’s going on in this space and try to open some good “cross dialogue” on how we can lift the overall cause that I know we all are pursuing: More effective measurement, better management of performance, and stronger results.

Exploring “Best Practices” In SM Performance Measurement…

A few weeks back I published a post on what businesses outside of SM space could learn from what is happening within SM. Many of you found that useful, although I must admit that it was the first time that I really began experimenting with what was available out there in terms of thinking andtools. But rather than focusing on the tools, I tried to explore some of the bigger themes that were emerging in terms of practices and approaches, and attempted to determine which aspects of that thinking in SM might be be “import-able” by other sectors as “lessons learned”.

Today, I want to ‘flip the tables’ a bit, and talk about what other industries can teach Social Media about the art of measuring, improving, and delivering on our individual goals and aspirations.

I was inspired to go this direction by a number of posts over the weekend that appeared to delve into the same question (here’s an example regarding the measurement issues with Klout) When I read that, it sounded like some good stuff, I realized that this was really  the tip of the iceberg on a really important issue. So expanding on this seemed to be the next logical step.

So what Can SM Learn From Others?

The below observations are based on merely a snapshot of what I see taking place now, and fully realize that dialogue is occurring at this very minute in certain hotel bars and restaurants on this very topic. My goal is not to suggest an exhaustive list of “fix it now’s”, but rather to open an ongoing dialogue on what we can learn and apply in our individual areas of expertise.

• Is what we’re measuring today meaningful?

OK, let’s get some basics out of the way, at the risk of boring (or offending) some of the social media pundits and ‘real experts’ out there. For most users (consumers of Social Media)- the everyday user of Facebook, LinkedIn, and Twitter, for example- the answer to ‘whether or not SM measures are meaningful ?’ is “probably not”. Save for ego and vanity, measurement of things like the number of “digital friends” (Facebook friend counts and Twitter followers for example) mean very little to the nature of managing meaningful relationships- whether it is in maintaining existing ones, or growing new ones. Meaningful relationships go way beyond these surface level statistics.

Of course, there are those individuals and businesses who do use, and rely heavily on, more in depth statistics for tracking their progress. So I believe at least some of them would say “yes- meaningful…but with a lot left to be desired”. The stats and measures are there. Are they meaningful and value adding to the business? Subject to debate.

What we can be certain of, is that things like Follower counts, Klout scores, Retweets, and Click-through’s are measures that are becoming less and less valuable, and that there is a deep yearning for more. Whether this takes the form of refining what’s in the algorithms and “black boxes” , or a major rethinking of the metrics themselves (which would be my vote), still appears to be a subject of great debate.

• For the sake of what?

When you walk into a large company that “manages by the numbers” (and trust me, many don’t), you see that there are literally hundreds, if not thousands of things they are tracking. Some are real meaningful, and some are as useless as an “asshole on your elbow” (I heard that one from a old (and wise) plant manager in Texas, and have been waiting months to use it- hope I didn’t offend 🙂

When I see that level of measurement/ quantity of metrics, a little “warning sound” goes off in my head and I start exploring the question: “For the sake of what?” are you measuring this or that? I use a variety of techniques to get them to tell me how they are going to use a certain metric (most often the question of “why?” asked repetitively works best), but often the question is rhetorical because there is no answer. I once heard someone say, “If you want to see if information is valuable, just stop sending out the report and see if anyone screams!”.

Fact is, if a measure doesn’t have a causal link to some major result area, or worse, if the person managing it cannot see that link, the metric serves no purpose other than to consume cost. Most of the tools I see in SM space for tracking metrics simply  report stats with no obvious linkage to any real outcome. Even if something like # followers was important (and we all know that most often it ranks pretty low), there is no clear path evident in the reports on how the stats actually impact an outcome that is important to the user (other than loose descriptions and definitions at best).

Yet, we all know that the tools and models for establishing those linkages exist everywhere. Just look at some of the basic tools used by stock traders. While they are not perfect by a long shot, “technicals” like Stochastics, Bollinger Bands, and simple breakout patterns, have clear paths to a high probability event or outcome, yet are available to even the most amateur  investor. Even “stogy” old Utility companies can draw connections between things like permit rates, new connection activity and downstream staffing requirements. I’m not suggesting it’s easy, just that it’s important and that the tools are there to execute and simplify.

• Who really cares?

For me, this is the MOST IMPORTANT item on the list. Most of us have seen the Klout site, Twitalyzer, and the myriad of other tools out there to support the development of personal networks. These tools are extremely useful, and possess a wealth of information if you have the time and stamina to think about what it all means. I mean, come on… to have 25 metrics on one page with trends only one click away is something that a real metrics guy can only look at and say “WAY COOL”. Seriously, very cool! That’s the good news.

The bad news is that it’s the same news for everyone. But we all know the dangers of “one size fits all”. I’m not diminishing the value these tools provide. SM would be lost without them. And in their defense, certain sites like Twitalyzer and Klout have gone beyond the simple dashboards and have incorporated categories that many aspire to, and have begun to draw some connection between these aspirations and those broad categories.

But it’s just a start (I mean come on…Are  any Twitter users actually aspiring to be “social butterflies”? (ok, don’t answer that, because they’re probably some who do!) Perhaps a better question is whether a “social butterfly ” would ever aspire to be a “thought leader” ? My point is that it’s probably not a linear sequence of development, and while these categories get us one step closer to aligning measures with goals, they are still missing 2 things:

1) Better understanding of the goals of users (its probably more than 4 and less than 100) and

2) a guidance system that helps one use the metrics to achieve those goals.

So here’s a thought…What about a simple interface that allows you to pick a goal, and then tells you which metrics you should care about and what the target should be to accelerate within that goal class? You’d be building a model that would clearly feed on itself. I’d be surprised if the BI guru’s out there don’t already have this built into their corporate BI suites and Web Analytics tools, but it would seem to me to be a great draw for the myriad of other users with goals that extend beyond butterflies and mindless follower counts.

Find out what’s important, at as customized a level as you can (and is practical), and tell us how to get there. That’s the “holy grail” in every business, and what every CEO is and Executive is craving from its performance management process – “I’ll tell you what my strategic goal/ ambition is,…and you tell me what the metrics AND targets are  that will help me get there,… and then help me  track my progress!”

• Can tools help? (and how?)

Absolutely and without question, the answer is yes. But just as other businesses and industries have jumped too quickly, often placing ‘technology before process’, so has SM in my view. Part of this is because of how the industry is “wired”, and how it has evolved. Born through technology, and managed and staffed with a heavy technology bent, it’s not surprising that we’ve reached a point where the data has become king, UI’s have a lot to be desired.

I’m not talking about the ease of navigation, the placement of charts, or the rendering of drill down information. I’m talking about how the user (the customer) thinks…starting with their goals, and accessing the relevant metrics to show progress and critical actions they need to take to improve. I suspect the developer who can “visualize” (to use an overused term in today’s SM environment) that kind of “line of sight” will ultimately win the hearts of its users.

The other role technology can play is enabling the algorithms and models that are required to deploy the kind of “mass customized”/ goals oriented solution I described above. Without these tools, the likelihood of being able to normalize, analyze and model these relationships would be impossible. So in my view, the tools are critical, but the effort first needs to be on the process (getting the line of sight understood) and then working the raw data in a way that renders it in a context-specific visualization. That’s in a perfect world- but it’s still a good aspiration.

Like I said, these are just the things that are ‘top of mind’ for me at the moment, and only informed by the lens through which “Bob” is looking. I’m sure some of these issues are top of mind for you too, and you may actually be unveiling (right now) that new “holy grail” subscription site  that has the answers. If so, great…I may be your perfect customer. But if the last two decades have taught me anything, it is that different perspectives and different lenses often pose new questions and spark new crystal balling that lifts the entire game.

Of course I welcome any comments and expansion on the above list. As I said earlier, this is just the beginning of my own thinking, inspired in part by some of yours. I look forward to more of yours!

PS- For anyone who is interested in Performance Management and Metrics topics outside of the world of SM, feel free to bookmark http://EPMEdge.com

Links to some of my more recent posts on these subjects are provided below

Incorporating the principle of “line of sight” into your performance measurement and management program

Managing through the “rear view mirror”- a dangerous path for any business

Data, information and metrics: Are we better off than we were 4 years ago?

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

Data, Metrics, and Information- Are we better off than we were 4 years ago?

Data, data…all around us…

Most of the projects I work on day in and day out involve data to varying degrees. I use data quite extensively in all of the assessments I do on organizational and operational performance. I use it heavily whenever I benchmark a company’s processes versus a comparable peer group. Data is at the very core of any target setting process. And, of course, data is (or at least should be) the beginning, and a continuous part of any gap analysis and any subsequent improvements that follows.

Today, the hunger that organizations have for good data has reached such unprecedented levels, that whole industries have developed in and around the domain of  what we now call “Business Intelligence” or BI. Having consulted to organizations over the last three decades, I’ve seen this hunger level increase steadily throughout the entire period. But no more so than in the past few years.

However, despite all the gyrations that we’ve gone through over the years, one of the first things I hear from C-Suite Executives is that they still feel  “Data rich and information poor”. So I’ll start this post off in the words of late President Ronald Regan by asking, “Are we better off or worse off than we were 4 years ago (in terms of translating data into useful and actionable information)?”

So are we better off than we were 4 years ago?

As any good politician, I would have to hedge a bit, and say yes, and no. And appropriately so I think.

We are most certainly better in our ability to “access” the data. If you’ve lived through the same decades as I have , you will remember the painstaking efforts we all made to extract data out of those proverbial “source systems” (when “SAS routines” had nothing to do with the SaaS of today). Everything from the data inside of our source systems, to the tools we use to access the data, to the ways in which we report and visualize the results has moved forward at lightening speed. And so, from that standpoint, we are, in fact, better off.

But on the other side of the coin, our tools have, in most cases, outpaced the abilities of our organizations and their leadership to truly leverage them. At a basic level, and in part because of the technology itself, we often have more data than we know what to do with (the proverbial “data overload”). Some would say that this is just a byproduct of  how wide the “data pipe” has become. And at some level, that’s hard to argue.

But I think the answer goes well beyond that.

“Data rich, information poor”…still?

In large measure, yes. The bigger issue in my view is the degree to which the organization’s skills and cultural abilities enable (or better said, disable) them to effectively utilize data in the right ways. Most companies have put such a large premium on data quality and the ability to extract it through their huge investments in IT infrastructure and financial reporting, that it has in some ways forced leadership to “take it’s eye off the ball” with respect to the way in which that data is operationalized.

So from the perspective of using the data to effect smarter operational decisions, I’d say the successes are few and far between.

Of course, you can google any of the “big 3” IT vendors and find a myriad of testimonials about how much better their decision making processes have gotten. But look at who’s doing the speaking in the majority of cases. It is largely from the Financial and IT communities, where  the changes have been most visible. But it’s in many of these same companies where operating executives and managers still clamor for better data and deeper insights.

So while at certain levels, and in certain vertical slices of the business, the organization is becoming more satisfied with its reporting capabilities, translating that information into rich insights and good fodder for problem solving still poses a great challenge. And unfortunately, better systems, more data, and more tools will not begin to bridge that gap until we get to the heart of some deeper cultural dynamics.

Needed: A new culture of “problem solvers”

Early in my career, I was asked to follow and accept what appeared to me at the time to be a strange “mantra”: “If it ain’t broke, ASK WHY?” That sounded a little crazy to me having grown up around the similar sounding but distinctly different phrase: “If it aint’t broke, DONT fix it”.

That shift in thinking took a little getting used to, and began to work some “muscles” I hadn’t worked before. For things that were actually working well, began asking ourselves “why?”. At first, we began to see areas where best practices and lessons learned could be “exported to other areas. But over time, we quickly learned that what appeared to be well functioning processes, wasn’t so well functioning after all. We saw processes, issues, and trends that pointed to potential downstream failures. In essence, we were viewing processes that were actually broken, but appeared to be A-ok because of inefficient (albeit effective) workarounds.

“Asking why?” is a hard thing to do for processes that appears to be working well. It goes against our conventional thinking and instincts, and forces us to ask questions…LOTS of questions. And to answer those questions requires data…GOOD data. Doing this in what appeared initially to be a healthy process was at first difficult. You had to dig deeper to find the flaws and breakdowns. But by learning how to explore and diagnose an apparently strong processes, doing that in an environment of process

 

failure became second nature. In the end, we not only learned how to explore and diagnose both: The apparent “good processes”, and those that were inherently broken. And for the first time in that organization, a culture of problem solving began to take root.

Prior to that point, the organization looked at problems in a very different way. Performance areas were highlighted, and instinctively management proceeded to solve them. Symptoms were mitigated, while root causes were ignored. Instead of process breakdowns being resolved, they were merely transferred to other areas where those processes became less efficient. And what appeared to be the functioning parts of the business, were largely overlooked, even though many of them were headed for a” failure cliff”.

Indication, Analysis, and Insight

Few organizations invest in a “culture of problem solving” like the one I describe above. Even the one I reference above, deployed these techniques in a selected area where leadership was committed to creating that type of environment. But throughout industry, the investment in generating these skills, abilities and behaviors across the enterprise, pales in comparison to what is invested annually in our IT environment. And without bringing that into balance, the real value of our data universe will go largely unharvested.

There are a myriad of ways a company can address this. And some have. We can point to the icons of the quality movement for one, where cultures were shaped holistically across whole enterprises. More recently, we’ve seen both quality and efficiency (more critical to eliminating waste and driving ROI) get addressed universally within companies through their investments in the Six Sigma, and more recent Lean movements.

But if I had to define a place to start (like the business unit example I described above), I would focus on three parts of the problem solving equation, that are essential to building the bridge toward a more effective Enterprise Performance Management process.

• Indication– We need to extend our scorecards and dashboards to begin covering more operational areas of our business. While most of us have “results oriented” scorecards that convey a good sense of how the “company” or “business unit” is doing, most have not gone past that to the degree we need to. And if we have, we’ve done it in the easier, more tangible areas (sales, production, etc). Even there however, we focus largely on result or lagging indicators versus predictive or leading metrics. And in cases where we have decent data on the latter, it is rarely ever connected and correlated with the result oriented data and metrics. How many companies have truly integrated their asset registers and failure databases with outage and plant level availability? How many have integrated call patterns and behavioral demographics with downstream sales and churn data? All of this is needed to get a real handle on where problems exist, or where they may likely arise in the future.
• Analysis– When many companies hear the word “analysis”, they go straight to thinking about how they can better “work the data” they have. They begin by taking their scorecard down a few layers. The word “drill down” becomes synonymous with “analysis”. However, while they each are critical activities, they play very separate roles in the process. The act of “drilling down” (slicing data between plants, operating regions, time periods, etc.) will give you some good indication where problems exist. But  it is not  “real analysis” that will get you very far down the path of defining root causes and ultimately bettersolutions. And often, it’s  why we get stuck at this level. Continuous spinning of the “cube” gets you no closer to the solution unless you get there by accident. And that is certainly the long way home. Good analysis starts with good questions. It takes you into the generation of a hypothesis which you may test, change and retest several times. It more often than not takes you into collecting data that may not (and perhaps should not) reside in your scorecard and dashboard. It requires sampling events and testing your hypotheses. And it often involves modeling of causal factors and drivers. But it all starts with good questions. When we refer to “spending more time in the problem”, this is what we’re talking about. Not merely spinning the scorecard around its multiple dimensions to see what solutions “emerge”.
• Insight– I’d like to say when you do the above two things right, insights emerge. And sometimes they do. But more often than not, insights of the type and magnitude we are looking for are usually not attainable without the third leg of this problem solving stool. Insight requires its own set of skills which revolve around creativity, innovation, and “out of the box” thinking. And while some of us think of these skills as innate, they are very much learnable. But rather than “textbook learning” (although there are some great resources on the art of innovation that can be applied here), these abilities are best learned by being facilitated through the process, watching and learning how this thought process occurs, and then working those skills yourself on real life problems.

Dont forget “line of sight”

A few days ago I wrote a post on the concept of “line of sight” integration of your performance management content and infrastructure. It’s important here to reinforce the importance of tracking all of this back to that underlying construct.

The process of operationalizing information, is but one of many in the “line of sight” chain from your company’s vision, to the operational solutions that manifest here. And this process of operationalizing change is only a beginning of the journey you will make to translating these gains into ROI for the business (what I’ve referred to before as “value capture” or “value release”).

So as you navigate your path through the above activities, its useful to keep it in context and remember that the desired end state is to enable your business to see that clear “line of sight” from the very top of the organization right down to the work-face.

* * * * * * * * * * * * * * * * * *

There’s not enough space in a post like this to elaborate as much as we could on each of these. And creating real cultural change clearly involves more than a few quick bullet points. But as has been my tradition in this blog, my intent is to introduce you to principles and techniques that can get you started on this journey, or increase the ability for you to navigate the road your on.

b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com