Creating drill down metrics is a way for organisations to keep it true to its objectives, however a ‘metric only’ driven organisation can often find itself at misplaced outcomes. The human mind is naturally trained to achieve objectives and hence without intent gamifies (or manipulates – with intent) the target in order to achieve it.
The outcome or result often is not intended and sometimes is discovered after severe damage has been inflicted on the brand.
An organisation that is created with values and culture, allows employees to make the right decision even if they are not meeting a KPI, but everyone in the organisation understands the spirit of the KPI and reasons for the miss. This enhances a culture of ‘acceptance of mistakes or misjudgements or errors’ in pursuit of correction, excellence, perfection, quality that builds trustworthy brands, organisation repute and business culture. The principle that no one is perfect and therefore mistakes are bound to occur, encourages a culture that strives to remove mistakes, de-risk future errors and a quest for excellence.
In many cases the “lazy” drill down and passing the metrics down results in a mismatch between job profiles and targets/KPI’s assigned, a business objective simply broken down by territory or product is not good enough. For example a KPI for a delivery team needs to focus on delivery objectives rather than business objectives. Choosing the right KPI for the right group of people is critical in aligning the ducks in a row for the organisation. An organisation is simply more complex than a mere single metric that is merely broken up and passed down.
Today’s complexity increases with the increase in data sets that are available and therefore more variables that can be measured. Today organisation health is driven more and more by customer metrics than earlier product or geography metrics. The ability to drill down to the customer level is used more widely to measure the health of the business. As an example business health is better driven by tracking growth in ‘number of retained customers’ along with ‘overall growth’ vs ‘growth in topline’ alone (which can be achieved by acquisition that is more expensive). ‘Same customer growth’ along with ‘same store growth’ is a better indicator than same store growth alone.
The data complexity when simplified to store or department level is useful for HR to track employees performance met to the corporate objectives. Example Customer Satisfaction level by store, or repeat customer by store or in e-commerce by geography can help identify store or geography level issues for training inputs or mismatch of employees to expected roles.
The success of Customer Centric organisations stems from this combination of measuring customer centric KPI’s along with creating a culture that puts the customer at the centre of all decisions.