Out with the Old, In with the New: Switching Key Performance Metrics as Business Strategy Evolves

performance metricsMost everyone can relate to a recent experience I’ve had.  After years of filling a house with memories and “stuff,” we ran out of bedrooms and space and made the decision earlier this summer to sell the current house and move to a new house.  One of the most difficult decisions of the entire process was the dreaded purge period – determining what stays and what goes, what we really needed and what should be sold off or donated.  Whether it was the kids’ toys, a book I had read a dozen times, or that old t-shirt with holes and faded colors, everything was in question.

We hear a similar challenge from current and prospective clients on a regular basis – should they make a change in the data they collect, believing that the “new” data will be more powerful, meaningful, and actionable?  Whether it is months, years, or in some cases decades of data, it is a scary thought to make even a small change for fear of losing that ability to track against a baseline.  However, data purges can be just as healthy in our business lives as it is in our personal lives.

Over time, collecting the same measures can lead to complacency:

  • What was originally measured may no longer apply to the current business model or environment – as business goals and objectives change, so too should your success metrics;
  • Users of the information may be “trained” on what to expect year after year – the changes (or lack thereof) may be predictable, leading to a “de-valuing” of the information;
  • The historical measures may no longer be providing relevant insights and/or sufficient insight to make measurable and meaningful change occur.

In any of these situations, you are doing your organization a disservice by continuing to collect the same information wave after wave.

We recently partnered with a membership organization that had been collecting member satisfaction data for nearly twenty years.  Satisfaction had steadily improved over that time (and was currently at an all-time high when we spoke with them), but they had enough evidence to suggest that while satisfaction continued to improve, member engagement was stagnant or even noticeably weaker over the same period of time.

  • Members were less involved in the organization than ever before;
  • Members were participating in meetings and courses at a lesser frequency;
  • The leadership of the organization was aging, which created a significant challenge in being able to backfill a significant amount of knowledge and expertise with newer, fresher perspectives.

It was a very difficult decision to even consider making the change from measuring satisfaction to measuring engagement. Asking both questions made the transition easier. It enabled our client to see the apples-to-apples comparison and also gave them a the more realistic measure of the member relationship – not just a “happiness index.”

The success of the LRC’s proposed engagement metric was in its ability to meet three key organizational goals:

  1. Simply defined, easily explainable, and easily repeatable. If the metric requires a complex algorithm to tell your company how strong your customer relationships are, it may meet one of the three criteria, but likely will not meet the other two.  Our engagement metric is created using a combination of responses to three questions, on which everyone on the senior leadership team agreed.
  2. Powerful and meaningful to both staff and members. If the metric results in the same level of behaviors for your strongest relationships as your weakest relationships, there is no implication to changing the relationships over time.  Our engagement metric has a strong connection to behaviors (members who are strongly engaged are more involved and greater sources of non-dues revenue than those who are weakly engaged).
  3. Universally accepted and agreed upon by employees and stakeholders. If any part of the organization has not bought in on the new metric, or prefers to continue with the old metric (for any number of reasons), the new metric is doomed from the start.  Our engagement metric has the senior leadership team working to set a target for improving member engagement, and it will be central to their new strategic plan, and everyone is pulling in the same direction.

Achieving these three goals put our client more at ease that they had made the right decision.  Just as with letting go of that old t-shirt, there will no doubt be uneasy feelings as you part from waves of data and information, but rest easy knowing that the information you are collecting from this moment will be driving your entire organization forward in new and exciting ways!

Posted in Associations, Blog, Insights, LRC Blog.

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