In a post a while ago, I talked about Culture-Structure-Measurement or People-Processes-Metrics as the 3 pillars of scaling organisations.
As you begin to evaluate the experiences with the various brands, the majority of brands seem to be over zealous with the ability to measure, as a result are ending up believing that measuring various activities will solve their performance aspirations. This comes from a belief of “what you measure gets done” and measuring impact will align the organization and make the focus on processes almost redundant. This is a fallacy and can be illustrated with the many experiences we study today on an ongoing basis.
2 illustrations of the point (while it may sound anecdotal – it is not as many of you readers will relate to the examples)
Case 1 :
An Insurance company where my policy was maturing : As the email communication from the Insurance company was tardy and not clear about submitting the details and documents required for processing, one had to physically go to the branch office. At the branch office I was asked to sign a declaration which went to the effect of “I had visited the branch to redeem my policy, but the staff convinced me to continue till maturity”. On refusal, the Branch Manager then came out with the truth that the staff had a target to meet for incentives on individuals they had convinced to stay invested.
Case 2 :
A bank with whom I have an account, wanted me to invest Rs 100,000 to waive off a charge, despite the account being linked to another account (having a much higher balance).
What do both the above cases illustrate:
Both organisations are chasing targets, and these targets have translated to individual employee or branch targets. Its amply clear that this has been done without creating due processes and more importantly little or no training. With an absence of process and in many cases absence of culture, employees manipulate the system to meet the target with the belief that they are helping the organization meet its goals. In actual fact what this does is that over the long term it turns the customer away from the brand.
I am sure most readers will agree with me that their car service company, durables service agent, bank staff, or utilities service staff, has asked for a rating of 9 and 10 on a scale of 0 -10 (they will even call back if you give a lower rating). Nowadays everyone is used to the Uber, Zomato, Swiggy, rating systems after every ride or delivery, yet the complaints and social media posts reflect a poor level of service and experiences that never seem to stop. Brand Custodians must seriously ask the question “Why is this happening?”
While Goodharts law saying “When a measure becomes a target, it ceases to be a measure” was more relevant to macro economics, it applies as much to corporates, who seem to be overweight in their bias to measurement and targets.
It is equally important for corporates to focus on the other 2 pillars of organization building i.e. creation of Culture and implementation of Processes. Founders and Leaders create organization culture. They send the signals to the team through their day to day practice and leadership, which reflects in how the brand communicates with its stakeholders, and it communicates the principles and values of the business.
As the organization scales up the leaders are not necessarily accessible or are not available for every decision. That’s when culture takes over and the teams know that they will be supported for their decisions even if the organisation has to accept a liability or apologise or refund a dissatisfied customer. Training ensures that the staff are competent enough and have the necessary product knowledge to address the issues as well as understand the need for process compliance. This makes the organization a professional set-up and independent of micro-management requirement by seniors. The training ensures that a majority of predictable issues are addressed, and those that cannot be predicted is resolved through culture to ensure customer delight.
The 3 pillars are in a constant cycle with each other and need reinvestment on a continuous basis. A good measure is that of customer experiences – it will provide a good sense of resilience that the brand will hold in difficult times. Customer Loyalty is built through Empathy, Engagement and Experience – which you can achieve with insight, incentives, rewards and great experiences.