Tag Archives: jon picoult

Flawed Metrics on Employee Performance

As companies become more data-driven, so have their employee performance metrics. Yet the very metrics that are often used to gauge employee performance might actually discourage the behavior those companies want to promote.

This common workplace pitfall is grounded in two basic realities.

What gets measured gets managed. Employees tend to behave in a manner that is aligned with how they are evaluated and rewarded.

What’s easy to measure isn’t necessarily what’s right to measure. Organizations often gravitate toward easy-to-measure performance metrics, even though the behaviors they wish to cultivate are relatively complex.

Examples abound of how organizations fall victim to the “folly” of employee performance metric design:

  • Service centers that measure how quickly staff handles calls then wonder why employees don’t spend ample time to completely resolve a customer’s issue.
  • Companies that obsess over quarterly sales targets then are surprised when executives make short-sighted decisions which compromise the business’ long-term health.
  • Organizations that focus on individual performance to assess employee success are then dismayed when they observe a lack of team work and collaboration.
  • Manufacturing firms that measure workers on the volume of product they deliver then struggle with widespread quality issues on the finished goods.
  • Sales divisions that measure employees purely on top-line growth are then surprised to see how unprofitable newly -acquired accounts are.
  • Human resources departments that measure recruiters on candidate “yields” from job fairs then find many unqualified applicants in their interview pipeline.

See also: Risk Performance Metrics  

Without careful and thoughtful design, metrics that are meant to manage employee performance can actually sabotage business success. To avoid that outcome, keep these three points in mind:

1.  Think about what employee behaviors are most valuable to your customers.

What do your customers care about most? Perhaps it’s how long they have to wait in line, or be on the phone with your staff. Even more likely, it’s getting their issue resolved on the first try.

Make sure your employee performance metrics are aligned with your customers’ interests. If customers value speed of service above all else, then put that at the center of your measurement methodology.

If other considerations are just as critical to them (such as the quality of the product, or the efficacy of the staff), then gauge performance on those dimensions as well.

For example:

  • Conduct post-purchase customer surveys to assess overall satisfaction with product quality (and, indirectly, the performance of those making the product).
  • Track the number of employee-submitted product enhancement suggestions, thereby encouraging staff to translate customer feedback into constructive improvement ideas.
  • Or measure how frequently customer inquiries are resolved on the first contact, indicating the staff’s effectiveness at understanding and addressing customer needs.

2.  Use metric “checks and balances” to avoid over-rotating on any one measure.

A singular focus on a particular performance metric can be counterproductive. The behaviors that businesses try to encourage among staff can rarely be tied to just one metric. Doing so usually ends badly. Employees become obsessed with outperforming on that single metric, regardless of the consequences.

Guard against over-rotation on any single metric by creating a balanced system of measures.

For example, let’s say you want to encourage a sales-oriented culture, but want to avoid misconduct. Rather than measuring staff only on sales generated, complement that metric with ones that gauges account profitability and customer satisfaction. Then, only reward salespeople for achieving revenue targets while also meeting those other performance thresholds.

See also: New Way to Evaluate Captive Performance  

3.  Consider unintended consequences and perverse metric-driven behavior.

This is perhaps the most important element of good employee performance metric design. Look at your employee performance metrics through a critical lens.

Carefully consider all of the ways by which a metric, engineered with the best intentions, might nonetheless promote undesirable (or at least customer-unfriendly) behavior. Based on how detrimental and probable those unintended consequences are, tweak your approach accordingly.

That might mean abandoning some metrics in favor of new ones. For example, consider a call center that chooses to measure customer satisfaction instead of call handle time. (The latter metric often leads service representatives to rush callers off the phone.)

It may also mean adding “check and balance” complements to existing metrics. For example, an organization that uses 360-degree evaluations to ensure that individual achievement does not come at the expense of collaboration and collegiality.

The development of effective employee performance metrics requires a delicate touch. Success measures, and the reward systems they support, shape employee behaviors in meaningful and sometimes subtle ways.

A thoughtful approach to performance metric design can help companies use metrics to their advantage. The result is a powerful “behavioral current” that steers employees in the right direction.

And the value of that is…  immeasurable.

This article was originally published on Monster.com.

Why Your Customer Research Is Flawed

U.S. pollsters got quite a surprise in the early morning hours of Nov. 9, 2016.

That’s when it became apparent that their sophisticated voter research had completely failed to predict the outcome of the U.S. presidential election.  Longtime Republican political strategist Mike Murphy went so far as to assert that “data died” that night.

Yes, the 2016 U.S. presidential election was a highly visible casualty for data-driven research, but far from the only one.

In 1985, Coca-Cola announced the rollout of “New Coke,” an updated formulation of the venerable soft drink, designed to appeal to changing consumer tastes.

In launching the new formula, the company cited research indicating that taste was the primary driver behind the brand’s market share slide. The firm also pointed to blind taste tests that indicated that a majority of consumers favored New Coke over its predecessor (and over Pepsi).

As it turns out, the research pointed Coca-Cola in the wrong direction. Three months after rolling the revised formulation out, the company acknowledged widespread public discontent and returned the original Coke to store shelves. New Coke was killed in 2002.

See also: 5 Key Customer Experience Trends  

What went wrong? One thing that Coca-Cola failed to account for was the emotional dimension of consumer buying behavior. Even if people said they preferred New Coke in taste tests, many had an emotional attachment to the original formula that – outside of the research bubble – superseded their rational judgment on taste.

This is why an overreliance on traditional research methods (i.e., asking customers what they want or like) can lead a company astray. Surveys and questionnaires do a poor job of accounting for the emotional considerations that drive customer behavior.

As behavioral science has clearly demonstrated, it’s those emotional considerations that often exert the strongest influence on individual decision-making. (As renowned psychologist Daniel Kahneman has described it, “the emotional tail wags the rational dog.”)

Post-mortems on the 2016 election polling have also referred to the emotional “blind spot” of traditional research methods. Evans Witt, president of the National Council on Public Polls, highlighted this issue to NPR, noting that “polls do a poor job with emotion/enthusiasm/commitment”; that may have been an important behavioral influence on what was a very polarized electorate.

There’s another reason, though, why traditional question-based customer research can mislead, and it comes down to this simple truth: There’s a big difference between what customers say and what customers do.

Wal-Mart found this out the hard way in 2009 when it launched a store redesign effort dubbed Project Impact.

The company had conducted customer surveys, which indicated that shoppers didn’t like Wal-Mart’s cluttered, dimly lit stores. They wanted cleaner, more streamlined layouts.

Project Impact sought to deliver on this apparent customer preference by de-cluttering the store – removing endcaps, widening aisles and improving navigability.

Even the store’s famed “Action Alley,” the main corridor separating departments, wasn’t immune to the changes. Traditionally dotted with palettes piled high with fast-selling items, Action Alley was cleared out by Project Impact, opening up sight lines across the entire store.

It all sounded like a good idea… until same-store sales started to plummet. The reason? To streamline the store layout, Wal-Mart had to eliminate, by some estimates, 15% of its store inventory. When customers could no longer find their favorite brand at Wal-Mart, they went elsewhere to pick it up – and shifted their shopping to competing stores that offered a wider product selection.

In addition, it turns out that Action Alley – while perhaps contributing to store clutter – also triggered a lot of impulse buys among Wal-Mart shoppers. When Action Alley disappeared, so did a lot of sales.

Since its founding by Sam Walton in the 1960s, Wal-Mart’s strategy had always centered on offering low prices and a wide selection (“Stack ‘em high, watch ‘em fly,” as Sam liked to say).

Sam apparently knew his customers better than the company’s modern researchers, because it turns out people shop at Wal-Mart for – you guessed it – value and selection. Shoppers might have said they wanted a clutter-free store – but in reality, the clutter was part of the appeal for them, feeding into their hunt for great deals and impulse purchases.

What could Wal-Mart have done differently? Instead of just asking customers what they wanted, they should have observed them in action, navigating the store and making purchases. They should have spoken to shoppers one-on-one, to better understand what shaped their purchase behavior once they stepped foot into a Wal-Mart.

It’s precisely this type of context and nuance that traditional customer research methods miss – because what customers say they want is sometimes quite different from what they actually value.

Indeed, that which the customer values the most may also be the thing that’s hardest for them to articulate. Hence the mismatch between what people say and what people do.

See also: Are You Ready for the New Customer?  

Traditional customer research has merit, but its precision is often oversold. To steer your business in the right direction, don’t just look at the data, look at your customers.

Immerse yourself in their experience and observe them in their natural habitat – because that’s where you’ll find the priceless insights about how to better serve them.

This article first ran on WaterRemarks, the official blog of Watermark Consulting.

How to Keep Goals From Blowing Up

The goals you set for your organization might be sabotaging the very success that you’re trying to cultivate.

That’s the message from Professors Maurice E. Schweitzer, Lisa D. Ordonez, Adam Galinsky and Max Bazerman – all of whom should surely win an award for the most creative titling of an academic research paper (“Goals Gone Wild” in the Academy of Management Perspectives journal).

In a recent New York Times article, the professors’ research was highlighted along with intriguing examples of the unintended consequences of goal setting.

Like this gem: An NFL team, in an effort to improve the performance of an interception-prone quarterback, added a clause to his contract penalizing him for every pass thrown to the opposing team. The result? The QB threw fewer interception — but only because he stopped throwing the ball altogether, which wasn’t the desired outcome.

See also: Your Data Strategies: #Same or #Goals?  

This goal-setting phenomenon is routinely on display in business circles, when companies focus so relentlessly on a metric that their people over-rotate on it. That ultimately drives undesirable, sometimes even awkward behavior. Perhaps you’ll recognize some of these examples from your own experience, as a businessperson or as a consumer:

  • Auto dealerships where franchise recognition is so closely tied to “top box” scores on a satisfaction survey that staff practically beg customers for an “Excellent” rating.
  • Call centers that set targets for call length, leading service representatives to be more interested in getting customers off the phone than in actually helping them.
  • B2B firms that use Net Promoter Score (NPS) as their primary gauge of performance, leading company representatives to hand-deliver the NPS survey at the most auspicious occasions (like on a golf outing with a client).
  • Companies with such laser-focus on market share targets that they acquire new business at all costs, even at the expense of profitability.
  • Human resource recruiters who are held accountable for qualified candidate “yields” from their sourcing methods, leading them to pass less-than-ideal applicants through the recruiting pipeline.

To avoid making your organization’s goals its own worst enemy, keep these four tips in mind:

1. Consider unintended consequences. In the fervor to address a business issue and rally the troops around an effort, organizations leap to embrace a metric without carefully considering all of the downstream impacts. Contemplating a new measure, or a renewed focus on an existing one? Put on your contrarian hat for a moment. Think of all the bad things that could happen if your staff focused, to a fault, on the line you’ve drawn in the sand. Based on how detrimental and probable those unintended consequences are, tweak your approach accordingly.

2. Strive for balance. Guard against over rotation on any single metric by creating a balanced system of measures. For example, if you want to encourage a sales-oriented culture, but wish to avoid staff making sales at any cost, then only reward those top salespeople who also meet some performance threshold for profitability or customer satisfaction.

3. Set Goldilocks goals. Setting goals is one management task where it’s dangerous to be cavalier. Set the bar too high, and you create unrealistic performance expectations that can disengage your staff or, worse, lead them to game the system. Set the bar too low, and you miss an opportunity to get people to stretch toward a higher level of performance. If you want to set a goal, first track the metric for a time to get a sense of its variability as well as the current performance level. That’ll help you set an informed goal that’s more likely to motivate rather than frustrate.

4. Beware the tie to compensation. Pay for performance – yes, I’m all for it. But organizations can get into trouble when they move too swiftly to tie particular metrics (especially new, unproven ones) to individual compensation. First, get some experience under your belt tracking the metric and providing individual feedback based on it. Then structure the compensation linkage in a way that reinforces a balanced approach to measurement.

See also: Integrating Strategy, Risk and Performance  

When it comes to performance measurement and goal setting, simple “carrot and stick” thinking won’t suffice. Business leaders must invest some real time engineering this piece of their workplace puzzle. It’s the best way to ensure that your organization’s goals are working for you, and not against you.

Want to Enhance Your Customer Experience?

Faced with maturing markets and increased competition, many companies are seeking to differentiate themselves by enhancing their customer experience — but those efforts might be misguided.

That’s not because customer experience is a poor source of competitive differentiation (on the contrary, it appears to be a compelling driver of shareholder value). Rather, it’s because companies tend to overlook key components of the experience — elements that may appear mundane but actually exert a meaningful influence on customer perceptions.

Documents often represent one of the most frequent and prominent touchpoints that companies have with their customers.

Part of the problem is that executives are easily enamored with customer experience improvement tactics that are buzz-worthy: big data predictive analytics, artificially intelligent chatbots, transformational customer relationship management (CRM) or mobile-friendly digital engagement, just to name a few examples. Less “glamorous” initiatives — such as billing statement redesigns, correspondence rewrites or sales proposal reformatting — struggle to garner much attention. That’s an issue, because these static documents often represent one of the most frequent and prominent touchpoints that companies have with their customers.

See also: Payoff From Great Customer Experience?  

Many businesses, however, view such documents as mere administrative communications. From the customer’s perspective, though, these documents are the experience — or, at least, a significant part of it. A classic example of this dynamic comes from the “explanation of benefits (EOB)” statements sent out by health insurers. Every time an insured receives medical care, an EOB is triggered. In theory, EOBs are meant to explain what a practitioner charged, what insurance covered (and didn’t cover), how much the insured is responsible for paying and why. In practice, many EOBs are practically indecipherable (just look at this example, which was recognized by the Center for Plain Language as one of the most confusing customer statements on the planet.)

EOBs confound rather than clarify, generating more questions than they answer. They make IRS tax forms look like the most elegant communication pieces ever devised. EOBs are widely ridiculed and deservedly so.

What’s fascinating, though, is that for most consumers, the EOB is the face of their health insurer. It is, by far, the most frequent touchpoint they have with the company that covers their medical expenses. Yet few insurers treat it as such and, instead, continue to issue EOBs that cement health insurers’ position at the bottom of most customer experience industry rankings.

Businesses discount the power that the written word has in shaping customer perceptions.

This is an issue that transcends any one industry. Businesses in virtually all verticals simply discount the power the written word has in shaping customer perceptions. As a Yale and Stanford study documented, something as simple as the readability of a font in product marketing materials can drive significant changes in consumer purchase behavior. Subconsciously, people see a difficult-to-read font as a cue that the purchase decision itself is difficult, so they defer making a decision.

See also: How to Redesign Customer Experience  

Yes, you read that right: Use a clean, readable font in your marketing materials and you’ll start converting more prospects into customers. However, it goes beyond font choice. It’s about overall cognitive fluency in written communications. The way our brains are wired, we prefer things that are easy to think about rather than things that are difficult to think about. When faced with a printed document, an email or even a webpage that exacts a high cognitive load, our brains essentially get paralyzed — and just tell us to walk away and not deal with it. That’s hardly a good recipe for engaging prospects or customers.

Conversely, when written information is easy to interpret (meaning it’s clear in visual design, language and architecture), people are attracted to it. We’re more inclined to trust it (and the company sending it). We’re more likely to view the communications experience as a positive one.

Clarity also means we’re less likely to have questions about the communication, which helps lower operating expenses by reducing stress on a firm’s infrastructure. Imagine how many unnecessary phone calls companies could preempt if their correspondence, bills, and statements were so clear that they actually obviated the need for customers’ inquiries.

The development of crisp, clear and cognitively fluent communications should be a central component of any customer experience improvement strategy. Excelling in this regard enables companies to not just deliver a better brand experience but to do so at a lower cost. While these communication projects might appear mundane, monotonous, perhaps even boring, don’t be misled. They are an extremely practical and effective means of differentiating what may be one of the most common touchpoints you have with your customers.

With every letter, email or document, companies have a chance to either enhance customer loyalty or erode it. Don’t squander this opportunity to shape your organization’s brand experience, capitalize on it by focusing on the “write stuff.”

This article was originally published by Document Strategy.