In the early days of your current job, you decided which metrics to track. You expected that as your graphs improved, your customers, stakeholders, or higher-ups would see and appreciate significant increases in the value they received. At the start of each new year, you gathered your team for “the annual meeting,” where you displayed each graph and shared praise if it was trending in the right direction or encouragement if more effort was required. In most cases, your first new metrics were not “innovative metrics” because you were still getting acquainted with the organization.
No matter the outcome, what you likely never did was ask questions like:
- Do we still need this metric?
- Should we change our target?
- Do our customers see any benefit from our efforts?
- Are we spending more to focus on this goal than the value we are creating is worth?
- How can we eliminate the need to track this?
Below is a real-world example of when these questions proved their value.
Creating a New Innovative Metric
One January, I accepted a position as Head of Customer Service Americas for a British company. During my first month on the job, I realized that our rate of successful single-visit installations in one primary product line was less than 30%.
This caused many issues for the company and customers, including:
- The customers could not use our product, but it was still in their facility. The customers’ co-workers would see it and say, “It’s still not working. When will it be working?” They hated hearing that.
- Our receivables were inflated because nobody would pay until they could use the product.
- We had to return critical parts to the U.K. for repair. That required us to pay round-trip shipping costs, mess up the manufacturing production schedule to repair the returned assembly, and delay new shipments.
- Our installers hated the installation process because they knew it would be up to them to explain what went wrong, and they didn’t have good answers. This led to poor morale.
Clean Installations: An Innovative Metric
I decided to track installation issues and created a metric called “clean installations.” A clean installation meant that everything we needed for the installation was present and worked, including everything the customer had to provide. I could have used the classic First Visit Completion metric. However, I decided on my new metric because it was the only metric I could think of that did not exclude any details.
In April, the start of the U.K. fiscal year, I was invited to attend the annual kickoff meeting for the business with the low clean install rate. After introductions, I was asked to share my initial observations with the business management team. I explained my metric and the results I was seeing. The business managing director looked at me, wondering why he had hired me. He then asked the French Director, who thought about it briefly and said, “We are probably at about 20%.” Another crazy look and on to the German Director, who said, “We have not had a clean install in the last three years.” By then, I knew I would be fine. We had a long, technical discussion about the issue we were seeing, and then the manufacturing director joined us. After more conversation, a plan was agreed upon, and everyone was directed to report the same metric to the M.D. every month.
It took almost three years for product redesigns, manufacturing process changes, improved shipping status communications, and generally hard work to achieve a +93% global clean installation rate. That was the outcome we all wanted.
Missed Opportunities
However, we all continued to send in the monthly report for another two or three years. We should have moved on and repeated the process with a new issue, but we were distracted by the day-to-day problems. Because we did not attack another issue, we and our customers suffered in other areas instead of improving them. That was a mistake.
This example shows how we improved considerably by carefully choosing a performance metric. However, we missed other opportunities by waiting too long to stop monitoring the metric.
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