Breaking bad Service Metrics: How do we measure what matters in Service?

I bet we all have had doubts about what we measure in Service. Are we taking the right measures? Are we doing too little / too much? Are we even measuring the right things??

We all face uncertainty in our businesses (new technologies, post-COVID ripple effect, you name it). One tendency I observed in organisations is to “fight” uncertainty (yeah, right) by measuring everything they possibly can, in the attempt to regain control. When this is the case, metrics become complex and numerous, they never get reviewed, or even worse, they are reviewed as a post-mortem exercise.?

And the desire for more control often goes well with a culture of “green metrics”. You all know where this leads. You get assigned super ambitious targets, that might even feel unfair. Larger organisations might hire dedicated teams to make metrics look right, and so the metrics theatre begins.

How do you avoid feeling “trapped” by metrics and KPIs, but instead use metrics to give yourself and your team more autonomy and grow service capabilities?

Here are 3 ideas (and 3 must haves) on how to approach the problem.

1. Set a clear direction
2. Measure what matters
3. Act on data

Set a clear direction

Like in every game, you need someone / something to keep the score: call them lagging metrics, call them KPIs, you need something to help you understand if you are going in the right direction.

Lagging measures that worked for me: Customer Satisfaction, Net Promoter Score, Service Revenue, Service costs. These are relatively easy to track, they are easy to share with senior management (and yes, it’s easy for them to understand what you talk about).?

Must have: You must ensure that your targets / goals point in the same direction as the rest of the company (misaligned metrics are a problem, and quite a frequent one as well - they lead to silos and influence behaviours away from collaboration and ultimately impact on company success).

Measure what matters

Now we get to the tricky part. How to set metrics that people actually welcome and use in their everyday work lives?

My suggestion is - less is more: select metrics that represent what your team does, that are connected to your daily operations. How many really depends from business to business, but as a rule of thumb, when you look at 3-4 metrics and people immediately understand what they have to do when they look at them, you are in good shape.?

When you have such metrics, people feel they can control their world. They feel empowered to take responsibility and fix their own problems (more on culture in the next paragraph).

Another way to assess your selection: good operational metrics correlate well with the lagging metrics. My team once identified a stronger correlation between speed of reaching an expert and customer satisfaction (for a subset of customers) than other metrics had. Identifying these correlations can be so important as you can have the pulse of customer satisfaction even when the customer doesn’t invest the 5’ required for the satisfaction survey.

There are companies out there that build prediction algorithms using your operational data. This is very useful as the response rate for customer satisfaction surveys ranges between 5-30% - how are the other 95-70% customers feeling about us??

Must have: You must ensure that your processes are harmonised, especially those that are standard across most markets and products (maybe harmonisation is worth a sidebar discussion of its own). When everything is vanilla, you have a virtuous circle: you capture the same data in every installation, when you find a smart way to save money you can replicate that everywhere… Paraphrasing what a wise friend of mine used to say: “We install the same machines all over the world.. Why should we have deviations in our processes??”

Act on data

When you have set the direction, and you have 3-4 leading metrics to follow through, it’s time to empower your team to take responsibility. Good people set their own goals, they fix their own problems. They work autonomously.. Your job here is to communicate the direction clearly and ensure that your people receive the right feedback, celebration and support.

I’m partial to OKRs, in that I believe they are a good tool to ensure autonomy and increase the team's sense of mastery (see link to Daniel Pink and John Doerr videos below). But let's be honest, like every other tool, they have their pitfalls, too.

Must have: You must have the right culture when reviewing metrics. It’s not about punishing when a metric is red, but it’s about “do you understand why & what are you going to do about that”.?

So in conclusion:

Metrics are a tool that can help organisations understand if they are going in the right direction and they can help teams focus on the right stuff.

How do you ensure you have the right measures in place?

1. Set a clear direction: have the right lagging metrics in place, and ensure alignment with the rest of the company. But be aware, lagging metrics don’t foster actions, they just give you the score of the past games.
2. Measure what matters: ensure that your team can focus on 3-4 things that they can control and that correlate well with the outcome that you are aiming for.?
3. Act on data: Review metrics and let your team set their own goals and start initiatives to fix their issues. Give them support, challenge and useful feedback, but also celebrate their wins.

When all of this is in place you can be sure that you and your organisation are heading in the right direction and focusing on what truly matters.

What else is important, when considering Service measures?

Further reading / watching:

Drive: The surprising truth about what motivates us

MITSloan- John Doerr on OKRs and measuring what matters