I am in the grocery store the other day, standing in the checkout line.
This is not news, nor is it very surprising. We need food from time to time, be it for survivial, or because a large stampede of in-laws are on their way over, or because my wife has run across a great new recipe we want to try.
Nothing in and of itself worthy of a blog post. For sure.
It was still early in the day, so the store was almost empty. Most people in town were probably still reading their Sunday papers or catching up on a few, much needed, extra hours of sleep.
So why, on this particular occasion, did my wait in the checkout line become a little longer than expected?
And why am I writing about it?
The only person ahead of me in the checkout line was an elderly lady. She made mention to the cashier that she did not find a particular brand of barbecue sauce (brand "X" for the sake of this post). She especially wanted this item because she had a coupon!
"Oh, it's on the right-hand side just down there on aisle 5" the cashier told her (Note: having bought barbecue sauce at this store before, I knew she was right about this).
The lady looked somewhat distraught. She wanted to go get it, but was concerned about causing the additional wait. "Do you mind?" she asked.
"Not at all" I replied. Even if I did mind, or was in a rush, Aisle 5 was right there behind us, I knew that X was right there, I was next in line, and it was an early weekend morning, in no immediate hurry for anything.
The lady customer eventually returned. I fully expected her to have a bottle of X in hand, ready to scan, but there was nothing. "It's not there" she stated.
At this point the cashier took matters into her own hands. She left the register with a pleasant comment and proceeded to make her way down aisle 5.
And 30 seconds later back she came with a big 'ole bottle of X barbecue sauce. "Here it is" she said sweetly.
In my mind I commended her, and admired her skill in handling the situation. She did not blame. She did not accuse. She made it seem like the most normal of things that people cannot locate X in aisle 5.
And our elderly customer's reaction confirmed it.
"Thank you" she said. But the thing was, it was a "thank you" without embarrassment, without shame, without a sense of foolishness for having missed it, or any other such thing. From this particular customer's perspective, it might never have came from aisle 5 at all, and the cashier did nothing to make it seem otherwise.
And then she was on her way.
At this point you might be saying "well that's a great example of customer service, with a nice bit of emotional intelligence rolled in" and be willing to go along your way.
Our cashier looked at me, a hint of 'I'm sorry about that but I'm sure you understand' in her eyes. She scanned my few items - one bag in total - and I was done and proceeded to head for the exit.
I thought it was great what she did that for the customer. I had no problem with it at all. What's 5 minutes on a lazy Sunday morning? I was happy the lady left happy and got to use her coupon (if you ever experienced my wife's wrath for forgetting to use them you'd understand that feeling!).
And then there...
...right before the exit door...
...posted on the bulletin board...
...for all to see...
...was an 8x11 sheet of paper with a selection of each of the store's cashier's statistics for the past week printed on it: seconds per each item scanned, downtime between customers, and rank within the region.
Let's think about the implications of this for a minute.
Our cashier is clearly working in an environment where management has focused in on efficiency. Scan those items fast and once you are done with one customer start on another...right away!
In fact, this is so important, and we are so serious about this, we are going to call you out to the world to let them know where you stand in the world of cashier efficiency!
What were her options for dealing with our nice customer who could not find X?
- ::Option A: invite the customer to go back down Aisle 5 to find Barbecue Sauce X
- ::Option B: mumble something along the lines of "I'm sorry you did not find anything", all the while scanning any remaining items
And then going down the option A path, there are two additional alternatives to consider:
- ::Option C: walk down to Aisle 5 and get X for the customer
- ::Option D: mumble something along the lines of "I'm sorry we were out", all the while scanning any remaining items
These paths are diagrammed in Figure A, with the relative impact on the cashier's metrics noted on the right.
While metrics may have been important to the management, they obviously did not influence our cashier in this situation. At each point on the tree, she chose the option that made the metric worse, ultimately resulting in the worst possible metric achieved!
At this point in the tale we are happy that our cashier is a rebel. She has deliberately refused to be cowed or influenced by the metrics and has flaunted those measures in the sake of something we would consider noble and good: customer service.
She may not have walked a mile, but she certainly went the extra 50 meters (25 each way) up and back on Aisle 5!
One of the problems with using metrics is that they do not represent the whole of the situation. They are incomplete.
Using metrics to manage is akin to driving a car using nothing but the insturement panel. It's all fine and good to have a target speed of 60 miles per hour (or about 100 kilometers per hour), but if you are in rush hour and the car in front of you is stepping on the brakes you'd better be watching the road rather than your instrument panel!
Figure B depicts a rough drawing of a stage, much like the one my family and I saw when attending a local community theater production of "Tom Sawyer" a few weeks back.
The problem with the stage in Figure B is that it does not provide any cues to the audience. There's just a big 'ole rectangle.
The dynamism of the stage is captured through the movement of the characters, the props, and the lighting.
Metrics work like the stage lighting shown in the 10-second video clip in Figure C. We focus on the point where the lighting occurs. If this is the point of action on the stage it is great. However,the "rest of the picture" has receded into the background and is never emphasized.
We are no longer attentive to it.
Should Figure C's lighting continue for the whole length of the show, (in addition to being very boring) we would miss out on a lot of the action that is occuring on other parts of the stage.
In order to avoid this predicament, the lighting of the show is dynamic, moving around to highlight the action taking place wherever it is, more like the 10-second video in Figure D.
Our grocery store story can be imagined in this way. The spotlight first focuses cashier efficiency. The customer has a problem, and the next spotlight highlights their search down Aisle 5. It returns to our cashier in the form of the problem not being solved, and moves again down Aisle 5 and back again, finally centering on a postive experience for the customer leaving the store.
Very little of this is captured by our metrics, because by their very nature they are static and not dynamic!
Most of us have heard the phrase "what gets measured gets done". A lot of management disciplines subscribe to this theory. Most of these probably belong in what Daniel Pink would call a Motivation 2.0 mindset.
The simple fact is that a lot of management processes still in use originated in a different time and place.
In order to meet the needs of the industrial revolution, we developed techniques that worked well on assembly lines and in other highly repetitive but focused situations. Worker A turns screw #1, Worker B bolts one piece to another, and so on.
Our cashier does not work in this type of environment.
Yes, they scan items and complete transactions. But they also are problem identifers. The last three gallons of milk have been leaking, or customers in search of a certain brand of bread report that it is out.
They are also customer service providers, answering questions, greeting people politely, and making the occasional run down Aisle 5 to retrieve X.
They are wearing many hats in a dynamic environment, where the duties and objectives can change from second to second or minute to minute.
In our story the cashier shifted from efficient scanner to customer service representative. She had to exercise independent judgement, taking into account the context of the situation. Her performance cannot be scripted and precisely measured.
For instance, had it not been an early weekend morning with one customer in line, but a busy afternoon with six customers waiting and the prospect of more showing up in line real soon, she may have decided the cost of providing the personalized customer service of getting X from Aisle 5 to be too costly, and may have referred the customer to the service desk, or flagged down someone bagging groceries to do it, or called a manager.
Specific metrics in these types of settings are not very effective, because their range of focus does not account for the multiple, highly varying factors that are involved. The work environment is not so simple as it once was, and the methods for managing it that may have worked before no longer do.
Like our theater spotlight, one of the problems with functional areas is they focus on a narrower range of issues than the business as a whole, and are thus likely to miss important "pieces of the action".
Since finance folks like equations, evaluate the organization's performance through accounting measures, are more 'left-brained' than average, reside in offices and cubicles rather than 'the floor', and other reasons, the concept of coming up with metrics that can be consumed on their computer screens in the form of dashboards sounds like a great idea.
All the better if these metrics can be directly translated to financial performance.
From this perspective a focus on efficiency is ideal. With 100 customers and 5 cashiers, if we can be 20% more efficient we can get away with 4 instead, with an increase to net income as a result. Our company's performance is improving!
Yet, outside the spotlight, trouble brews. Poor customer service ultimately translates into fewer customers. Our finance team, plugging a change in customer throughput into their revenue side equations, may very well arrive at the conclusion that while short-term gain has occurred it has come at a long-term cost.
Scan per item is a simple measure to calculate.
We have a cash register. It knows who the cashier is via log in. It counts how many items are scanned, and knows when the cashier logged in and logged out. All the data for the equation has been programmed in.
Conversely, there is no equipment to measure a customer's smile, or how many times the cashier went down Aisle 5. Implementing a system to track this, if it were possible, would likely be cumbersome or costly. Movement scanners or face recognition software connected to cameras require a capital investment. A logbook system creates additional demands on employee's time.
Unfortunately, this can create a situation where "we manage what we can measure", rather than what we really should measure.
The result is that our cashier is dinged in their performance reviews for the decline in their metrics, but is not correspondingly praised for their superior customer service performance.
As this continues to occur over time, they are going to be more likely to give up the unsung behavior, even though it is arguably more valuable.
Some might construe this post to be a case against metrics, which it is not.
So what am I advocating?
Take a Holistic View - metrics are one component of management, but they are only one component, for a number of good reasons we have just discussed. Factor them in, but remember that there is a lot of activity 'on the stage' that is not being captured but can be vitally important. Each function has its viewpoint, and we can avoid a lot of the specialization problems if we alternatively 'wear the hat' of all participants. When encountering a situation, ask yourself a series of questions rather than just the one your specialization would profess: what would finance do? marketing? production? operations? legal? sales? investors? community members?
Go to Gemba - the Japanese term Gemba loosely translated is "the place where it happens" or "where the activity is". One of the tactics used in Lean is to literally stand in one spot 'on the floor' and simply observe...for hours and hours. While this might seem boring, and perhaps sometimes it is, it is amazing to see the subtleties of the situation play out. A financial analyst engaging in this activity will see the unfolding of our cashier story, and will appreciate the significance of the cashier's customer service activity in addition to their efficiency metrics.
Trust in Your People - our cashier story ultimately is one of a triumph of basic humanity vs. an arbitrary system of rewards and punishment, and it forces us to consider alternative philosophies of management and people. In the behavior modification framework that the 'carrot and stick' system originates from, we are nothing more than pleasure seeking and pain avoiding creatures. Yet this does not explain our cashier's behavior in the least. What predominates in our story is one of human to human compassion, a desire to help, and a good deal of interactional common sense. Most will make the right call when given a chance - we don't need to reward them or beat them to accomplish it.
Metrics are often a useful management tool but do not take the place of reasoned and balanced leadership judgement. The truly adept leader does not view all problems as a 'nail' should they be holding a hammer.
- ::What situations have you encountered where people performed in direct contrast to what their metrics would have incentivized?
- ::What practices would you recommend to avoid 'organizational myopia'?
- ::In what circumstances is 'what gets measured gets managed' an inappropriate framework to apply?
Add to the discussion with your thoughts, comments, questions and feedback! Please share Treasury Café with others. Thank you!