Alignment beyond Metrics

17 03 2009

When evaluating improvements in operational performance management, many focus on insuring that the metrics, KPIs and measures are aligned with the corporate strategy. We want to exel in customer intimacy so one of our KPIs will be CSat scores. This is a valid starting point but what happens once the ‘right’ metrics are established? KPIs are indicators, goals, targets. How then does the orgainzation align itself to those metrics and move them in the right direction?

A simple framework for consideration is the E-C-R model: Expectations, Capabilities & Rewards. Alignment needs to extend across all these components of the operating model. KPIs are expetations; this is what we state is important to the business and will measure our alignment with our strategy. In order to move those KPIs in the desired direction, the organizational capabilities need to be aligned to those goals. Everything from human capital skills, technology, plant & equipment, business processes need to be evaluated and, most likely, retooled. We can’t implement CSat as our KPI and rely on the same call handling processes that leave customers’ issues unresolved but optimize AHT. Finally, the most critical and most challenging component is the reward systems. From cash compensation to promotions, career pathing, and public recognition, the “R” will ultimately be the driver of change. If the company is in a mature market, with a KPIs of market share and customer profitability, then why is the sales comp plan still focused exclusively on new logo acquisition and bookings?

Don’t underestimate the change management required to implement an effective operational performance management system, aligning metrics to strategy.