Why do we measure things?
This may seem an odd question to ask in the age of ubiquitous data collection where data on more and more activity is automatically recorded. But that’s part of the problem: with so much data, how do you work out which are the important measures to use to run your operation?
To answer that question, we need to understand what we hope to achieve by measuring something. I could think of 3 main reasons:
- To see what’s going on. In any office-based operation, particularly in a service operation, it’s very difficult to tell what’s happening just by wandering round and observing people or systems working. Measures help us to see what’s happening – assuming we are measuring something useful of course.
- Detect changes / trends / exceptions. Measures plotted over time help us to identify patterns; to detect changes, to identify emerging trends, to pick-up exceptions and then respond.
- Basis for improvement. Once you’ve measured something you have a baseline of current performance to measure any future improvement against.
Ultimately, the idea of measuring something is to help us improve our knowledge and performance.
Black Holes – What do you think is hiding in there?
There is a common problem with most management reports though. The metrics they contain fixate on measuring activity, not quality.
They suffer from what I call measurement black holes: areas of performance which really matter to the customer but which the management team can’t see.
As a result, these reports are ok for monitoring activity and work-volumes, but they are of little use in understanding where and how to improve the service to your customer.
An Example
Let’s take a call centre as an example. Many years ago, when I started working in operational improvement, I worked with a customer services call centre.
They had all the usual operating metrics for a call centre:
- Average Handle Time: how long each call lasts on average.
- Service: % of calls answered within 20 seconds.
- Abandon rate: % of calls abandoned because the customer hangs up before the call is answered.
- Paid to Productive %: the proportion of time we pay people for which they spend on the phone (whether talking to customers or ready to take calls.)
- Occupancy %: of the time people are on the phone, what proportion is spent talking to customers, rather than waiting for a call to come through.
The problem with all these metrics is that they are all focussed on whether the employees are busy or not, rather than whether the customer is getting what they want.
Arguably the only customer focussed metric in this list is the Abandon rate – which measures whether the customer got frustrated enough while waiting to hang up without speaking to someone – hardly the basis for good customer insight!
Measuring Quality from the Customer’s Perspective
So, what’s the answer? Here’s an idea, instead of measuring activity, measure quality. By quality I mean how well a particular process / stage is being performed for its customer.
In a call centre this could look like tracking the reasons customers are calling you and to separate those reasons into good demand (they’re asking you to do something) and bad demand (they’re reporting a problem, or they’ve asked you to do something before and you haven’t done it or you’ve done it and messed it up). You could measure % of bad demand over time.
Break down the bad demand by reason for calling, then start working on solving the biggest problems first. They are likely to be process, system or policy related. It will give you a mountain of things to work on and a measure to see how well your improvements are working.
If you do this, call volume will reduce, giving you greater capacity. As a result, service – the proportion of calls answered in a specified time and abandon rate – will improve. Customers will be happier as you are fixing more of their problems. You might even find your people enjoy solving customer’s problems systematically rather than dealing with the same issues over and over again.
In most call centres I’ve worked with, bad demand is somewhere between 30% and 60% of all calls. Sounds a lot doesn’t it? Have a listen to some of your calls and keep a simple tally between good and bad demand. You’ll soon get a sense for the size of the opportunity.
In Summary
In any service operation or process there are 3 important measures of performance:
- Quality
- Speed
- Work-load
If you aren’t measuring quality from your customer’s perspective, you aren’t getting any better.
In future posts, under the Measurement section of the blog, we’ll look at:
- How to assess your current metrics and find out where you have performance black-holes.
- How to define quality and speed measures from your customer’s perspective and what you can do with them once you have them.
- Using measures to detect performance changes.
- The effect of process delays and how to compensate for them.
- The dark-side of measures: the impact on behaviour and culture when they are used in the wrong way (spoiler alert: they won’t drive learning and improvement if they are used as sticks to beat people with rather than tools for illumination and understanding.)
Think about all the things your business measures.
How many of those metrics measure activity rather than quality?
Where are your performance black holes?
