Choosing corporate measures is not a simple process. It involves a lot of dynamics that play off of the subconscious mind of the leaders of the organization. As you go through the process of choosing or retooling your scorecard, you’ll probably notice that some of the change resistant behaviors are motivated by healthy desire to create a safe, engaging environment for employees, but we always need to provide a check-point for individuals to self assess where the hard decision to shake things up becomes more important than the desire to maintain stability.
Here are a series of dilemmas you will encounter when you seek to up the ante on measures used:
1) When measures are tied to everything from variable comp to executive performance plans, AND the organization want to start tying metrics more closely to the actual strategy (not just a series of safe and generic business metrics) a dilemma occurs. How do you motivate employees to engage the new, more challenging measures from ones they know they can safely deliver on today (that no longer represent a performance gap)? Itâ€™s clearly the right thing to do, but is not without significant risk.
2) This links to a very similar dilemma. Organizations who link variable comp to corporate metrics, often subconsciously react to the threat that more challenging measures create to employee variable comp. This can shift the focus from forward focused, leading measures to a desire to maintain lagging measures â€“ justifying past behavior rather than creating predictive information about the future. Measures should be linked to the objectives on your strategy map, which speak to what an organization is creating.
3) People want to do a good job, but we ultimately want to look for information that supports our existing view of the world. Some emerging measures, like net promoter score (NPS) are far more telling than many generic customer satisfaction scoring systems, because itâ€™s so simple. Itâ€™s so to the point, that thereâ€™s nowhere to hide from the truth about what itâ€™s telling you. Companies with an 80% customer satisfaction score often have a 10% NPS rating. This can be like a big slap in the face, because no one associates 10% with a warm and fuzzy feeling. The opportunity here is to find out what the data is telling us, and to be willing to discover where your companyâ€™s performance isnâ€™t as solid as you thought it was. The dilemma is the tendency to want to continue to believe what we thought was true, vs. the opportunity to actually fix problems in your business by discovering what is actually true. The ultimate question to be asking your customers is first â€œWhat is the likelihood youâ€™d refer us to a friend of colleagueâ€ and secondly, â€œWhat would it take to shift your score from what it is to a 9 or 10/10?â€ Once you know what that gap is, you’re armed with everything you need to start making better decisions.
The hard questions begin when your organization has to decide whether itâ€™s going to go through the motions, or step up to the plate. Discussing these dilemmas up front will allow you to manage avoidance behavior by letting participants confront their own motivations and not just react.
The key to all of this is leadership. Compelling leadership goes a long way to suppressing fear-based behaviours.