Everyone has called a Telco with a problem and ended up being offered an upgrade instead of a solution to the problem. Last week I called my local Telco and ISP because I had a problem with the router they provided, they ended up not solving the problem and offering me the ‘best opportunity of the month’. This problem isn’t about bad costumer service or people not caring about their customers. It has to do with the selection of KPIs the company has. I’ve seen and worked for companies with awesome mission statements, values and internal work environments and yet they failed to provide a good experience because at the end of the year their bonuses, prizes and the sake of their job was defined by the KPI values they got.
For Established Businesses
When big businesses do a cultural change they often start with the mission statement and the strategic plan which is a good thing to do. The only problem is that most of the time that strategic plan never gets to shift the structures, processes and KPIs. In the end we have a fully motivated horse with the legs pointing backwards. And if the horse has the motivation to go forward but instead is going backwards it’s just a matter of time before it gets frustrated. So if you’re aiming to serve your client or make them happy (yes a local restaurant chain has just announce their mission is making us happy and still they won’t bring my chicken on time) your business needs to embrace that change and reflect it in the KPIs.
Let’s take my past experience working for a bank as an example, the mission statement told us that we should do anything to serve our clients and make them feel comfortable with the bank, yet the processes and the KPIs indicated that sometimes we need to cut off the credit of good clients in order to maintain a positive account balance. This account balance was the balance of the bank executive, so the KPI at the end of the year will be if you maintained you group of clients balanced by a certain proportion. So it doesn’t matter if the mission says you need to give the customer the best experience the KPI and internal policies won’t let you do it.
For Startups
The same thing happens to some startups even if the reasons are a little different. When you start a business you either are lean and aligned so you will always keep your mission statement and experience fast growth. The problem comes when you start needing more people to come in and people come from backgrounds where the KPIs were not aligned with the mission statements. At this point the startup may start adopting KPIs that are industry standards. There shouldn’t be industry standard KPIs though, unless all businesses have to the same vision and mission. The KPI need to be aligned with the mission and higher purpose of the startup (because you’re not in it just for the money, right?) and this is a process that takes a lot of thought and planning. Saying I’ll apply what we used in my last job won’t make it.
This leads to a confusion when more people are hired. As the team grows this new employees will be evaluated by those KPIs and they will not learn to live the company culture and mission because the KPIs values they need to achieve are not aligned and since they want to keep their jobs they’ll focus on the KPIs.
Alignment
So what a business needs is to focus on alignment. If you’re building a new business make sure you hire people that fit in the culture you want to create and that the processes and KPIs that are developed point to that greater goal. Alignment is not easy to achieve in a big business because a lot of work and effort needs to be done, and it will probably cost a lot of money. If it’s not done many of this businesses will have to go out of the market and new opportunities will rise. If you’re in the bunch of people that have a startup or end up taking on this opportunities make sure to make alignment your top priority while growing.
Have you experienced a time when you felt the KPIs didn’t match the greater goal of the business?. Have you had experience with the strategic & cultural change process? I would love to hear more.
