Don’t Let Your Contact Center Commit Any of Hammer’s Seven Costly Performance Management Sins


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“The CEO collects as much in performance bonuses as he can before he goes to jail”

—Joke circulating among speakers at the 2006 International Contact Center Management Conference in Chicago

My husband received a follow-up customer survey phone call from a microwave repair company after we had waited three months to get our oven working again. We had 10 visits from the microwave repairman, which was nine visits too many. The survey caller asked: “Was the repairman on time? Was he polite?” My husband was never asked whether we were satisfied, which was an altogether different thing. The questions my husband was asked—and his answers—never would have given the company a clear picture of what went wrong.

She told him there was ‘nowhere on the form to put down what you are telling me.’

It’s a good example of how contact center performance measures have gone awry. These days, the abuse of those measures has led to low customer satisfaction and low employee morale, both of which lead, as day follows night, to high customer churn and high employee churn.

Business process re-engineering guru Michael Hammer wrote a devastating critique of what he calls “the seven deadly sins” of performance management (The Seven Deadly Sins of Performance Management (and How To Avoid Them), MIT Sloan Management Review, Vol. 48, Spring 2007).

I agree with Hammer completely, and here’s my take on how these sins can affect your business profits and lead to lost opportunities and wasted human creativity and passion.

  1. Vanity: Using “measures that will inevitably make the [contact center], its people and especially its [management] look good.”

    Average talk time is an easy measure to track—and to control by punishing employees who talk too long. Consider one contact center agent who always got the highest scores on customer satisfaction. Because he also always “failed to perform” in keeping under the talk-time target, he was put on written notice for poor performance. The team lead who had to issue this notice knew this was wrong. But this was what everyone was measured on, and it continued, even though contact center personnel knew it came at the cost of customer dissatisfaction.
  2. Provincialism: “letting organizational boundaries and concerns dictate performance metrics”.

    At one collections contact center, the staff knew receivables could not be collected because the invoices showing what the customer actually agreed to in the contract “could not be entered into the order entry system.” When the customer refused to pay—because the product was not what the customer had ordered, the collections department raised the issue with the information technology department. IT responded by saying that all system change requests were on hold for six months while the department was being transferred to an outsourced agency to (ironically) conserve cash.

    IT’s performance metrics were not connected to those of sales’. Nor were sales’ metrics connected to collections’ metrics of collecting cash. So everyone lost. In this case, the cost of organizational silos resulted in slow cash collections, dissatisfied customers and inappropriate performance measures for IT that, in turn, allowed its outsourcing to sabotage the business’s cash flow without anyone being the wiser.
  3. Narcissism: “measuring from one’s own point of view, rather than from the customer’s perspective.”

    Remember that issue my husband had with our microwave repair? When my husband, furious that it had taken three months, 10 visits and many phone calls to get the unit repaired, told that to the customer satisfaction survey caller, she told him there was “nowhere on the form to put down what you are telling me.” So he canceled the 10-year relationship we had had with the appliance repair company, amounting to thousands of dollars.

    Because the customer survey form was designed to make the managers look good, it asked only about the things that the company knew would be working. It didn’t ask about the one thing that would cause a customer to leave, like: “Was the repair performed to your satisfaction?”

  4. Laziness: “assuming one knows what is important to measure without giving it adequate thought or effort.”

    In my husband’s case with the microwave repair, it’s possible company managers just forgot to ask whether the repair was performed to his satisfaction or whether he would be willing to recommend the service to friends and colleagues. But it means no one double-checked that survey before it went into production.

  5. Pettiness: when you “measure only a small component of what matters.”

    Measures that focus on company dollars—when employees can only control their own activities—serve to distract employees from the actual things they should be doing to contribute to increasing the amount of dollars that the business gets.

    Many dollar measures, such as sales, shipments and cash, require teamwork among many groups. If, for example, you want to measure revenue, you have to take into account initial prospecting costs, lead generation and customer retention. When a business celebrates only the generation of dollars, failing to measure whether the business is earning and keeping customer trust, it is trading long-term goals for short-term gains.

    All salespeople have experienced the pressure of deciding whether to push a customer to make a purchase this month to make quota or to hold off and gain the customer’s trust in letting the customer determine the right time to buy.

  6. Inanity: “to implement metrics without giving any thought to the consequences of these metrics on human behavior and ultimately on enterprise performance.”

    Customer trust is being lost daily at contact centers around the world, when representatives measured on talk-time are asking customers to call back “because we are not supposed to talk with you more than three minutes?” Wouldn’t you wonder whether to continue to do business with an organization that is so badly run?

  7. Frivolity: “the sin of not being serious about measurement in the first place.”

    Contact Centers that focus on being efficient and effective but do not seriously measure customer perception and customer experience are not taking performance measurement seriously.

If your contact center managers are committing any of these sins, then they—and you—have a conflict of interest. You are defining performance measures for them that ultimately hurt your customer loyalty.

At a minimum, you are wasting money. In the worse case, you are threatening the survival of your organization.


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