Macabre metrics: Quarrels between departments

It was a one ordinary day at my startup. Around 10 am, my sales team would come to me to complain: “The operations dept is so annoying! This client – whom we have chased for months – wants us to deliver on Thursday. But the operations dept insisted they would deliver according to SLA, which was Friday.”

At 10.15 am, the Head of Operations would come to me and complained: “Your sales team thinks the whole company revolved around them! I have set rules and SLA to make the operations process regulated. Why can’t they follow the schedule?”

That kind of quarrel happens almost every week, with little improvement after each case. Now that I’m observing from outside the company, I can see more clearly what’s going on. I think the main problem lies in the KPI/metrics.

What gets measured gets managed. And the more frequently you got feedback about something, the more likely you are going to work on it. 

Now, if the target for sales dept was the $$$ value of sales, they would do whatever it takes to sell, including offering ridiculous discount or giving empty promises to the clients. And if the target for operations dept was merely cost efficiency, they would not care if the clients’ hairs turned grey waiting for the delivery.

In the ideal world, of course, the metrics should ensure sustainable growth and long-term value creation as opposed to short-term wins. There are two widely-used sets of metrics: HEART & Pirate metrics.

HEART is the acronym of Happiness, Engagement, Adoption, Retention, and Task Success. While Pirate, well, what sound does a pirate make? “AARRR!” and it stands for Acquisition, Activation, Retention, Referral, Revenue.

If, for example, customer happiness was the KPI for all departments, everyone would thrive to deliver the most delightful customer experience. The quarrel between departments were minimised because they were all fighting for the same target. And as we’ve agreed that there’s no such thing as multitasking, focusing on one KPI in one period of time is the wiser choice, rather than try to accomplish everything and achieve nothing. That one single KPI has to be emphasised again and again to the whole team, and also has to be tied with reward and recognition.

However, obviously, don’t take this advice to the extreme side and spend the last millions of dollars in your bank account to make your customers happy – and then die tomorrow.

 


(Disclaimer: I’m not claiming to be the expert here. This is just my reflection. Any thoughts are welcome!)

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