The Art of Balanced Business Analysis

balancing rocks

The Business Fallacy of You Only Get What You Measure

The sentiment is nonetheless pretty straightforward; you need to make anything and everything measurable in order to understand and improve it. It’s a notion that has swept through the world of businesses in recent years and now everything from top-level sales targets, right down to the performance of an individual worker on a production line, has a number attached to it.

A simple and succinct phrase, it has entered the collective consciousness of many organizations, leading them to focus heavily on measurement at all levels of the company – and to be truthful, collecting appropriate data that can be analyzed to produce insight or drive improvement is clearly a useful thing. After all, if we don’t have data, we are driving blind and any attempt to improve the status quo is a best guess.

But measurement is not a panacea. Pitfalls await those who don’t get the delicate balance of statistical analysis and understanding the caprice of human nature. The reality is that when measuring activities undertaken by people, the measurements you choose may alter behavior – and not always in the way that you might expect or hope.

Practical Applications

Let’s imagine a call-center setting targets two key measurements:

  • Average wait time
  • Average call length

Two reasonable looking statistics which identify how long people are queuing and how long it is taking to resolve their queries. In a bid to improve customer satisfaction, reducing these average statistics seems like a sensible goal.

This target is cascaded down, and the call-center operators are incentivized to achieve it. By incentivizing speed, the staff will be motivated to complete the work as quickly as possible, as well as look for incremental improvements that will make things slicker. The logic being, if a customer can get through quickly, they will be happy? Well, perhaps not…

Herein lies the problem: By incentivizing “blunt” targets, the organization is sending a message to its staff about its priorities. If the organization incentivizes short calls, then it’s likely that the average call length will indeed reduce. The call-center operators will, quite understandably, be focusing on doing the fastest acceptable thing – as the organization has signaled to them that this is what is required. Yet this might not always be the best thing for the customer.

In fact, this kind of target may even result in customers being passed around from department to department – after all, every time the customer is transferred, the three-minute target is reset. Workers who object to this type of behavior may be subverted or put under pressure to comply so that their colleagues can achieve their targets. The net result will be a high proportion of calls hitting the imposed target... Along with a very high proportion of unhappy customers!

Of course, targets like the one mentioned above rarely exist in isolation. The call-center in question might try to balance the length-of-call target against a target that measures quality.

Perhaps each staff member will be expected to achieve a 95% quality threshold. In reality though, quality is extremely hard to measure objectively and these kinds of checks often focus on very minor things that customers are unlikely to care about. For instance, one organization would consider a letter a ‘quality fail’ unless the address was typed entirely in capitals. Few, if any, customers care about the capitalization of the address on a letter!

The Art of Balance

Measurement is crucial, particularly when benchmarking the efficiency of a process or advancing an improvement program of any type. However, when setting targets or measurement points, the art is recognizing the customer’s demands. Understanding the outcome of an internal or external customer desires will help us define appropriate objectives.

Often the best way to establish what a customer values is to ask them directly, or if this isn’t possible, hold a focus group or conduct a survey. While this appears obvious, oftentimes the customer is simply not considered or consulted. Naturally, there may be a disparity between what the customer wants and what the business is prepared to provide, and this also needs to be balanced.

Finally, it is important to consider the entire end-to-end process. Investigating the situation holistically will help optimizing one task with hidden implications later down the line. So, while narrow targets are important, investigating the situation from a broader business perspective will ensure that these goals are both practical and aligned with real customer and stakeholder needs. Without adequate consideration, targets and measurements will have unexpected consequences!