Should every business have a Chief Performance Officer?

Most businesses have one to manage their IT or website, or maybe individual business units, but not one that is responsible for the performance of a business as a whole. Should you have one?

There's an overriding theme I'm seeing in businesses today, and it boils down to one word, alignment.

The CEO is setting the vision, the teams go out and begin working towards that vision, striving to build their own high performance team, but in the end the total results of a business don't seem to match up to expectation, why?

When you dig deeper, the common theme around sub-optimal results is that the various business units aren't aligned to provide success for each other and there's no over-arching individual or group to govern how it should be mended.

For example, let's look at 3 major business units that are prevalent within most companies: Sales, Customer Service & Marketing

Each business is equally essential to the overall success of a business. The marketers are usually focused on bringing in new prospects and driving expansions via messaging, the sales teams are there to interact with the prospects and customers in order to increase revenue and the customer service teams are there to drive customer success and loyalty.

What seems all too common however is that these departments are set key performance indicators (KPI's) which sometimes don't lend themselves towards the success of other departments.

Some marketers have KPI's solely around quantity rather than quality (e.g. increase the leads into the sales funnel by an additional 300%). As you can imagine, what happens at this point is that the sales teams are flooded with leads that are more likely to be time-wasters rather than genuine, interested opportunities. Conversely, marketers could be told that they're only focused on high-end leads, which result in the sales teams not getting enough prospects hitting their funnel, and the blame game begins.

Looking at sales and customer Service, it's not unusual in any business for some sales reps to over-promise on expectations, only for the Customer Service/Success teams to be left with a ticking time-bomb on their hands. The Sales people are targeted around closing as many deals as they can, as quickly as they can, for as high a value as possible. Who can blame them then if the what is delivered doesn't quite match up to what was initially promised in a jazzy slide-deck presentation?

Finally, the KPI's of customer service are usually focused around how many 'tickets' they can close as quickly as possible, regardless of whether the customer feels like their issue has been successfully resolved or not. What this leads to is the customer having to log service request after service request until the resolution is finally found. It's no surprise then that the customer may complain to the sales rep or via social media at how bad their experience has been, and begin proceedings to take their business elsewhere.

So where does the buck stop? Who is responsible for ensuring that the KPI's are set in such a way that it leads towards the vision the CEO has mandated?

In 2009, Barack Obama appointed Jeffrey Zients to the role of Chief Performance Officer for the Office of Management and Budget. There wasn't much known about this position before this time, but since then it has grown in popularity among businesses.

Most noticeably, this position is highly focused around financial performance, as a partner for the Chief Financial Officer. My view on this is that if you're looking at a Chief Performance Officer, they should be given a much wider berth than financials. All signs point towards the revenue, of course, but the intangible side of doing business is what really makes a group sink or swim for the long-term. At the end of the day, sustainability is a true measure of success.

My questions to you are:

1) Do you feel the key performance indicators of each business unit within your organisation are set based on the success of the individual group, or for the business as a whole?

2) Is there a personal or group assigned with the role of ensuring these KPI's are set and measured and adjusted correctly?

3) How much more efficient would your business be if all KPI's were properly aligned to drive success for each other?

There's no magic solution for this problem, just hard work, collaboration and coming to an understanding of what works best for the business as a whole.

I hope you enjoyed this article and it gave you something to think about with your business.

Please feel free to share it with your colleagues and leave any comments you may have.

Regards,

Nish