I think I’m going to turn it back to see what your questions about good performance management techniques are. I wanted to leave plenty of time for questions. It looks like we have about 20 minutes for questions, so go ahead.
Now a few of you have already submitted questions, so we’re going to jump right in. While our presenters are answering the questions, please take a moment to answer the feedback form that will appear on your screen. If you’ve pop up blocker technology, we ask you to disable it so you can receive the form.
Now, to our first question. One of our listeners asks what tool is used to build such a dashboard?
The tool that’s used in the slides is InetSoft's Style Intelligence. It sits on top of whatever system you have; your ERP system or whatever and it extracts data from various sources, including data that might have to be keyed in by an individual. Then it allows you to look at it in nice graphics and to be able to do the drilldowns and look at the analysis right in the meeting.
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Most companies also allow managers to look at performance on their iPhones or iPads now, so that while they are traveling they can see real time performance data in nice color coded charts. These are pretty cool tools, and they are not that expensive either, compared to what you pay for some other things.
Launching a Performance Management Program
That’s great. Now our next question is what are the best alternatives to customer surveys?
The best alternatives that I’ve seen is to hold a few focus groups with your customers to find out what bothers them and then, rank order those things from the worst to the least aggravation. So for an airline, probably the worst thing they could do other than crash would be if they cancel the last flight out of O’Hare for the night and you’ve got to spend the night in the airport because every hotel room in Chicago is sold out. That would probably be a 10 on a 1 to 10 scale. And 1, or a minor thing, might be you get on the plane, and you’ve got to check your luggage because all the bins are full or you get hung up on when you call to make a reservation.
So, most companies could track this stuff on a daily basis and already do track a lot of these things. They are operational measures; things that they mess up and you could track them. You count them and you multiply them by the severity and that’s something you can put on your dashboard on a daily basis and it doesn’t require any survey, so you don’t have to bother your customers with surveys in order to get this data.
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The companies that have used this aggravation index; some people even call it a rage index, have found that it directly correlates with loyalty. In fact, most of us find that with any vendor company we do business with, if they make us mad enough we eventually just take our business elsewhere, and we usually don’t bother writing a survey or giving them a complaint letter.
That to me is one of my best measures. Another really cool customer measure I’ve seen, when you have a small number of customers or you’re selling business to business, is a customer relationship index. So with some customers, maybe the relationship is fine and where it needs to be, but with others we need to improve it.
It sounds soft and subjective but the relationship is based on a lot of objective factors, such as how long have we been working together, how much business do we do together, things like that, as well as softer things like do we have any friends in this company? Maybe our CEO plays golf with their CEO once a month, things like that. The customer relationship measure and the customer aggravation measure to me are much better than surveys.
Obviously C level support is necessary to launch a performance management program. What advice would you offer on how to best gain that support?
What we have found is that rarely when we do a project like this do we start with the CEO of a company. Most of the time it’s with a business unit. It’s with one part of the company or even one function in the company. It might be a single plant or so forth, and usually the motivation to do this is we’re not doing well or we’re getting misleading information. To me the big benefit of this is you get one version of the truth and so people don’t have a chance to manipulate their spreadsheets and PowerPoints before the meeting. It’s all being extracted from databases and we have ways of tracking things that have good integrity.
So that to me, the big advantage of this is that managers are seeing real information about what’s going on and they are seeing it on a regular, frequent basis rather than waiting once a year to see how we do on our customer survey. They are tracking it every day so that they can zoom in and solve problems before they become bigger problems.
That’s typically how this is done is to get a champion who is a business unit leader, a vice-president or somebody that believes that they need help, the information they are getting is not accurate or it’s not timely, or they are getting good lagging measures, but they don’t have any predictive ones. Then get them to be the pilot test and then eventually, others will see that maybe this helps this unit manage better and become interested.
For instance we started with a very small unit in a large bank a couple of years ago with about 5 per cent of the company. Within a year, everybody else in the bank wanted their own scorecard because they saw how this information could help them manage better. Had we tried to sell it to them at the time, they probably wouldn’t have bought it, but seeing the benefit to someone else in the organization made them say, “I want to get one of those too.”