InetSoft Webinar: Number Ten – Driving Wrong Behavior for Good Measures

This is the continuation of the transcript on "Top Ten Business Intelligence Mistakes” hosted by InetSoft. The speaker is Christopher Wren, Principal Consultant at TFI Consulting.

Lastly, with number ten, I am still seeing a lot of measures that drive the wrong behavior. These are measures that look good on paper but people do the wrong thing in order to make the draft go up, the needle move, or the metric turn green. 

A perfect example of that is JetBlue.  Do we have anybody from JetBlue here? Okay. We can pick on that. They had one of the best balanced scorecards in America according to APQC. According to all the gauges on their dashboard that they have, they were doing a great job on Valentine’s Day earlier this year. 

Anybody remember what happened on Valentine’s Day, JFK?  A lot of people sat out on the tarmac for eight or nine hours on JetBlue airplanes. Do you know how they measure on-time take off in the airline industry? It’s when they leave the gate. So as a result, all those airplanes according to JetBlue’s statistics, took off on-time. They really didn’t though.

JetBlue measures customer satisfaction with a once a year survey. Do you think the survey was done on Valentine’s Day? No. Did their performance that day cause the CEO his job? Yeah. He lost his job, he got demoted over that, and the whole company’s reputation got tarnished but according to their scorecard, everything was good. So they are motivated by this measure. They measured based not on the airplane pulling away from the gate but when they sit on the tarmac. Isn’t that a stupid measure? It drives the wrong behavior from their employees. It drives shutting the door on time. 

Why don’t you think they measure wheels-up time? Wouldn’t that be a better measure?  Why don’t you measure that? The FAA requires the shut the door measure and also wheels-up time but the airlines said to the FAA, that’s a measure of your performance, not of us, because you guys tell us when we can take off and there’s truth to that.

Still, were there other airlines that took off in less time on the tarmac that day at JFK then JetBlue? You bet, and they all had the same weather, had the same number of runways, same airplanes, they had the same air traffic rules, and some of those airlines did okay while JetBlue sat there for nine hours.

So what is a good metric? Don’t ask yourself the question can I control it. If that’s the case, you’re not going to measure anything. Ask yourself can I influence this measure, can an airline influence when the wheels leave the ground? Yes. I don’t know who you guys flew out but I took Southwest. A lot of times I take United but Southwest seems to be on time a lot more. They are both flying out to LAX, they both have the same everything. It could have been because they put them on a lower priority. They aggravated the air traffic controllers. That could be measured too.

When I first started my consulting practice 17 years ago, my second client was a company with a red and white sign and a fast food business that sells fried chicken. We’ll keep their identity a secret in case there's anybody here from there and they have this measure that they focus on and all their restaurants are called chicken efficiency.  Some of you may have worked there when you were a kid and might remember that.

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I was studying the restaurants and trying to document their best practices so that we could teach that to everybody. Everybody I talked to told me, “Man, that’s what it’s all about, chicken efficiency.”

I was working with this guy in Tennessee, who’s running their restaurant in Knoxville, and he said everyday I have to calculate my chicken efficiency numbers on the score sheets. Now I got to go in the back room and I got to post my performance on this chart for my chicken efficiency score. I looked at his chart and he had near 100% chicken efficiency every day. I’m thinking this guy must be pretty good but I still don’t know what the heck this measure is.

So I asked, “Mister, what is this measure?” He says, “Well, it’s a measure of how much chicken you throw away. It’s a scrap measure. The accountants tell me if we throw a chicken, it impacts our profitability, so we won’t get a 100% chicken efficiency, which means every piece of chicken you cook, you sell it.” I said well how do you get 100% everyday? He told me not to put his name in the report, and I said I wouldn’t. He told me to just say an unnamed source from the south told you this.

This is my secret. I stop cooking chicken at about 6:30. I said what time do you close the restaurant? He said 10:00.  Then I asked him what he does if someone comes in at 7:00. He said I cook the order. I only cooked chicken to order after 6:30, that way you never stick any of it under the heat lot, it never gets dried up, you never have to throw it away, and you had a 100% chicken efficiency.

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So that makes a lot of sense. Did they teach you that in a training program? He said, “Oh, no. My buddy Leon taught me that.” He got promoted and has three restaurants but hasn’t cooked any chicken. He said that’s how we do it. And I asked what it does to his customers? That’s another story, they get mad.  He said most of them don’t want to wait. I said, how long does it take? 20 minutes. Okay. If you have seven hungry little eighth grade girls who had just come back from a soccer game, that’s a long time to wait, isn’t it?

He said most of those people just get right back in their minivans and they head off down the road and I never see them again.  Then I said, wouldn’t that concern you, Roy? And he said, “Well, at first, the day when I first got into management, I wanted to talk to my supervisor but my supervisor told me, Roy, there’s people being born everyday going to eat chicken, the population is growing, so don’t worry about it.  Plus, we don’t take credit cards.  So how are they going to know?” But they measure that chicken efficiency everyday, so you pay attention to that.  He said, “Yes, sir.” 

So I hear this chicken efficiency story every time at other restaurants I visit. I make up my report for senior management, it’s a big corporation, and they’re horrified. The people out there running the company can’t believe that the people in the restaurants are purposely making customers mad by not cooking chicken in order to make this stupid short term financial metric look good and they said we don’t know where they ever got the idea. This is so important because we certainly didn’t tell them.  In fact, in all of our orientation and all of our training, all we stress in our company is customer satisfaction. 

How often you think they measure that? They do it once a year by using a survey. Every year, the survey company comes in the third week of March, so on the second week of March, the windex comes out and the people start practicing their smiles and everybody polishes all the chrome and  eventually everything is looking real good. So when the mystery shoppers come in the third week of March to do the customer satisfaction thing, everyone is looking real good. By the fourth week of March, they’ll all go, “Whew, we don’t have to clean the bathrooms for a year now since we got our customer sat score, okay.  When it comes to chicken efficiency though, they measure that every day. 

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So beware of dumb measures that look good on paper but drive the wrong performance from your people because your people are smart.  They are going to figure out how to make the draft look better without necessarily doing what you wanted to do.