In this blog from our Lean Methodology Series,
we explore performance objectives and excellence.
We are quite often asked for input by our customers in defining and shaping performance objectives for managers.
One of the most common mistakes I see is the notion that a higher level of performance is always better. However, not all metrics work this way, and it can show a lack of understanding of the data you are trying to improve.
For example, in a call center environment, a target might include meeting a Service Level or Grade of Service of 80% of customer calls answered in 20 seconds. The performance objective might then be set in the following way:
Sounds reasonable, right? So, what’s the problem here exactly…?
The problem is that bigger isn’t always better. In this case, the higher the Grade of Service, the more staff you need. You get a diminishing return on investment when spending a lot of money on resources to get a few more percentage points of service level.
If this performance appraisal included something about being efficient or keeping under budget – then the Grade of Service objective will be directly at odds with this.
It’s rare that an organization would need to target a level of service so aggressively. I can think of a few examples, such as an emergency services response line.
So, what’s the alternative? If you really want to drive high performance for service (speed) metrics like Grade of Service, try targeting an effective range. Something like this:
And if you really want to set a challenge – tighten up the reporting timescale. So instead of setting these targets for a Quarter or a Month, try weekly or daily. Eliminating variation in performance is far more difficult and a better indicator of performance excellence.
You could also target the 20% of customers that miss the 20-second call answer threshold with things like maximum waiting time or a second threshold. Or take a higher level of service in a longer time frame, such as 95% in 120 seconds. Again, the trick here is consistency, not a higher number.
Bigger isn’t always better.
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