As I watch the Summer Olympics, I am in awe of the athletes’ physical and mental strength. The difference between medaling and going home empty handed often comes down to hundredths of a second or tenths of a point. It struck me that these competitors are always being measured against a benchmark that is either an ideal score or challenging their own personal best.
Setting Goals for Improvement vs. the Competition
Olympic competition is an appropriate analogy for the metrics that our clients use to measure the customer experience. Oftentimes, we are asked to help clients set appropriate corporate goals for improvements in Net Promoter Score (NPS), satisfaction, loyalty, etc. Invariably, that conversation includes a discussion around what is the best in class (gold medal performance), the industry norm and what would be meaningful improvement for their company.
If no swimmer ever completed the 100M freestyle in less than 46 seconds, and the winning time in the Olympic finals is 47.1 seconds, then that could be considered the industry “best in class,” with the norm probably being closer to 48 seconds. Similarly, if no company in a particular industry ever scored higher than a 75 on the American Customer Satisfaction Index (ACSI) standardized customer sat metric, then that sets a standard that will be difficult to exceed since industry competitors typically operate with similar business models. Expecting to exceed “best in class” is probably unrealistic unless there is a disruptive business model in the works.
For a swimmer or a company that is already operating near the “best in class” threshold, further improvements will be measured by hundredths of a second rather than whole seconds. But for a swimmer or company falling well short of “best in class” or even the industry norm, then setting more aggressive improvement goals is realistic because there is more upside potential for change.
Focusing on Specific Areas for Maximum Gain
For the swimmer who falls well short of world-class times, she is looking first to significantly improve on her personal best rather than expect to make the leap to world class immediately. She has multiple areas she can work on–starting off the block, stroke work, overall strength and stamina, etc. Similarly, a company that lags competitive satisfaction benchmarks has many aspects that can be addressed including product quality, pricing competitiveness, customer service, etc. The question in both cases becomes: What to focus on first to gain the most improvement in the least amount of time, or, in the case of a company, for the least cost or allocation of additional resources. Whereas the swimmer has coaches to provide guidance, a company uses tools like critical path modeling and maximum gain (Max Gain) analysis.
Let’s assume critical path modeling has shown there are six areas that impact likelihood to recommend (also known as NPS). Typically, we might see a mix of impact and performance scores across these areas with several having relatively similar impact and varying levels of satisfaction. The Max Gain technique can distill this mix of impact and performance scores to expose which component provides the biggest opportunity to improve the outcome. Max Gain clarifies priorities and resolves conundrums such as: Is the higher priority for a company a high-impact area with average performance or an average-impact area being performed poorly?
Going for the Gold or Going for a Personal Best?
A company looking to set its corporate goals must understand whether it is already performing at “best in class” thresholds, suggesting further improvements will be going for the gold but may have a diminishing rate of financial return. On the other hand, a company that has several areas where large improvements are possible should be looking to set more aggressive goals to achieve a new personal best.