Metrics Can Lead to Operational Dysfunction

When you spend a lot of time on the road talking to customers and prospects, you start collecting stories, and the stories I’ve gathered usually come from the mouths of contact center planners and workforce managers.  And these stories are often about how things in call centers can get messed up.

Organizations and operations can become dysfunctional for a lot of reasons. I’m always fascinated when the dysfunction is brought about because of the metrics we use and how executives are compensated.

Here’s one story that I’ve heard several times.

A common business practice is to manage an operation to a service goal—usually service level (X percent of calls answered in Y seconds) or average speed of answer.  And while using these performance metrics is completely rational, the behaviors it can produce can be straight lunacy when the EVP of Operations receives his bonus based on hitting this metric monthly.

Many businesses have consistent inter-month call volume variability that’s tied to extreme call volumes occurring on the first and fifteenth of the month, as their customers are paid or when bills are due.  Because of these peaks within a month, hitting the service goal on the very first day of the month is very difficult. It isn’t unusual for companies to post terrible service levels for the first day or two in the month.

What is unusual is the organization’s response.  Because the EVP’s bonus is tied to the average service level achieved for the month, the organization will try very hard to “catch up” to their service level goals.  In other words, the organization will overstaff subsequent days, in order to bring their average closer to the goal by the end of the month.

What does this achieve?  Well, overstaffing is unnoticed by customers—the phone simply is picked up right away.  Agents are idle more than they would typically be, since they are overstaffed.  Overtime costs are significantly higher. And customers who had to wait longer to have their calls answered on the first days of the month are unaffected—they are already done with the system.  But the big achievement is that the operation posts great average service levels for the month, and the execs achieve their bonus.

This is an incredibly rational response to a poorly designed performance goal.

What should the operation do?

Knowing that over servicing is as bad as under servicing, it makes sense to use an average absolute error to determine the service standard.  Allowing the exec to average out the operations “mistakes” while piling on costs isn’t the right thing to do.

I’d love to hear from you if these sorts of shenanigans occur in your customer engagement centers. I’m always game for new stories!

Make sure to join us Thursday, May 14 at 2 p.m. EDT for a webinar hosted by CRMXChange. The webinar, “Workforce Management Contact Center Metrics,” will cover more stories about how an organization’s choice of metrics can lead to some really costly business practices.  Register now!

Hope to see you there!


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