Customer centricity ain’t gonna happen without the appropriate metrics, stupid!

An American academic by the name of Steven Kerr wrote a profound article in 1975 entitled ‘On the folly of Rewarding A while Hoping for B’

Central to the content of the article is the reality that reward systems exist which encourage behavior contrary to what is wanted/desired. The behaviours that are desired are frequently not rewarded at all. Steve’s article provided examples of these ‘fouled up systems’ within politics, in war, in medicine, in universities, in consulting, in sports, in government and in business.

I’ve been promoting the fact for many years that one of the only ways of creating sustainable competitive advantage is through the design and delivery of a unique and distinctive customer experience. Achieving this outcome is a consequence of enlightened leadership and organizational design based upon systemic thinking such that all business resources and capabilities are aligned, embedded and mobilized in order to achieve the business purpose. The only way to achieve this is by creating and managing ratios and metrics that drive the appropriate behaviours to achieve the ultimate objective.

In today’s world (and more importantly in tomorrow’s world) this becomes even more important if businesses are going to differentiate themselves and become more accountable for their actions. I think it was Lou Gerstner, IBM turnaround fame, who said that ‘you get what you inspect, not what you expect.’

So, until businesses establish some ‘balance’ in their ‘un-balanced’ scorecards, until businesses truly start collaborating and co-creating with a real commitment and understanding of the ‘meaning’ behind their stated vision, mission and strategic intent, until businesses start seeing and understanding the critically important links across systems, resources, processes, policies AND their strategic  objectives and until organizations establish metrics that underpin EXACTLY those behaviours that they desire, we will continue to see ‘more of the same!’ When the rate of change inside the organization is less than the rate of change outside the organization, that organization is living on borrowed time. Sadly, the consequence is that you and I, as consumers, will continue to suffer mediocre and random experiences at best. AND, that sucks!


4 Responses

  1. Very valid comments. Reminds me of a saying the culture of a company is dictated by the measures it uses.

  2. Doug, great piece of work, the challenge is to convince those who are convinced that what they have in their scorecards is in line with company objectives and that it encourages appropriate behaviours.

    Let’s spend sometime on the topic when we meet. Well done, the article is enlightening.

  3. Hi Doug I can feel your frustration on the progress of businesses toward customer centricity. I need to have a chat to you about our project (I’ve been working with Colin & Elaine as expert advisors). I’m off to a conference on the Gold Coast today so will try to contact you next week.

  4. Dough,

    I tend to desagree with metrics maniacs, especially regading the popular Balanced Scorecards. I believe that too many metrics/indicators/scorecards confuse people and create a kind of behaviour paradox in our minds ( if I improve one metric I affect negatively other, i.e. time spend to calm and recover a claiming customer with the average attention time allowed in the call center.)
    But in this case I agree with you on how badly we need to monitor, inspect and lead by example and reward customer centrics behaviours.
    Regarding systemical thinking on organization my 10 years of experience on it including Thoery of Constraint consulting shows that everybody think there are many corporate obstacles and personal agendas that block it. And reality shows that companies still survive althought working in silos.
    Lately I am working on how to move individuals towards being more responsabile (in the sense of Christopher Avery definition, who have wrote the book “teamwork is an individual skill”). I consider responsability or the lack of it is a root cause of many failures. But you cannot force it neither but processes nor metrics, at least not so easily… you have to work closely with the individuals.

    My ten cents from Argentina.

    Keep me posted!

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