Expect What You Inspect

I was thinking back to some of the sales and revenue meetings that I had attended. These are normally meetings where the top line is the focus of management’s attention. This is arguably step one in any business process. One of my favorite phases is to state that in order to have a good bottom line you need to start with a good top line. This sounds pretty logical, but you might be surprised by some of the directions that some of these meetings have taken.


Top line review meetings invariably go in one of two directions; if the top line is below the objective, you stay focused on sales and revenue and what steps must be taken to achieve the targets. If the top line is at or above the targets, the meeting will almost immediately begin to focus on the margins that the sales are contributing. The focus of the sales meeting then becomes margins.


You are inspecting sales, but are expecting margins.


This got me thinking further about some of the operations reviews that I have attended. The idea of these reviews is to see if the operations and service level objectives are being met. Again I recalled that these meetings invariably went in one of two directions, depending on the measurement attainment. If the operational and service objectives were not met, they stayed focused on service. If the operational and service levels were met, the meeting changed focus to profitability.


They were inspecting service levels, but expecting profitability.


The point I am making here is that you should only expect what you inspect. If you are only inspecting sales, then sales are all you should expect. Too many times we have seen the volume of sales go up in accordance with the attention it has received, only to see a change or reversal of course when the lower margins associated with those increased sales come to light. The same sort of events seems to occur when the incremental expenses associated with increased service levels come to light. Again too many times we have seen the service levels go up in accordance with management attention, only to pull back when the costs associated with those higher service levels come to light.


If you are going to inspect both the volume and margins on sales, you will need to make the sales team responsible for both sales volumes and margins. If you have a sales team that is only responsible for, and compensated on volumes, then margins will continually be an issue associated with sales. If you are going to inspect both the operational levels and profitability then the operations team needs to have responsibility for both the service capabilities and the associated profitability. If the operations team is only measured on their operational performance levels, then the costs and profitability associated with those functions will continually be an issue.


When metrics are provided to any team as a means of inspecting their performance, expect that team to focus on the actions required to attain the goals associated with the metrics. There are always tradeoffs in business. Lower margins may be required in order to increase sales. If the sales teams do not have the responsibility to evaluate those sales volumes to lower margin tradeoffs, they won’t. You can continue to have sales inspections with the sales team, but you will need to have a margin inspection with some other team.


The same goes for operations. If service levels are the only focus that the operations team is to be measured on, they will do whatever is necessary to meet those service levels. If they are not required to evaluate the tradeoffs between desired service levels and profitability, they won’t. It will be left to someone else.


Individual, team and business unit inspections need to be aligned with overall business expectations and requirements. If you only inspect one aspect of a desired performance, then that will be the only aspect that receives focus. If you only inspect the volume of sales, expect good volumes. If you do not inspect the margins associated with those sale, do not expect good margins. The same goes for operational goals and profitability.


I suppose the same could be said for just about any function within the organization. If you are going to expect multiple facets of behavior and performance, you will need to measure and inspect each of the facets and behaviors collectively. If you inspect them individually, don’t expect them all to be met.

Survey Says…..

I got another survey today. That’s not too unusual. We all seem to be getting them more frequently.  We get them from various political entities, consumer product manufacturers, software application manufactures and just about anybody that you have bought something from that requires some sort of product registration. We get them at the office from our various suppliers and vendors, other groups from within our own organization that provide us support or a service and even our own companies will periodically survey the employees for their opinions. In short, we seem to be asking each other a lot of questions.


We need to remember this the next time we have the urge to send out a survey to anybody. If we want to survey our customers, understand that they are also customers of other companies who also want to send out surveys. If we want to send out a survey, we need to have a very clear set of goals for both the survey itself and the use of the information we are to gather. Like anything else in the organization, we need to have a very clear set of objectives for a survey for it to be of any use. We also need to demonstrate to the surveyed entity that we will do something with the information we gather that will be beneficial to them.


What is it that we want to know (that we don’t already know). Why do we want to know it. What are we going to do with it after we know it.


Too many times I have been surveyed, and then never heard another word from the surveyor. I answered the questions but in return got no value for my time. My information went somewhere, but no outward manifestation of a response was provided. Eventually I have gotten to the point where I respond to fewer and fewer surveys. Maybe that is why I seem to be getting more and more of them.


Too many times surveys become isolated onetime events where a great deal of attention seems to be showered on the entity being surveyed, and then just as quickly disappears with no specific results communicated or acted upon. If the surveyed entity recognizes that characteristic, then the survey becomes just another time consuming event for them, with no recognized or expected value.


Surveys will only have value if the surveyed entity believes that there will in fact be action taken that is hopefully beneficial to them as a result of the survey.


If you are going to survey the employees of your business (again), explain to them what the results were of the last employee survey, and what actions were taken as a result of their previous input. If you are going to survey your customers, explain what actions were taken as a result of the last survey, or if it is the first time the customer is being surveyed, explain what you have found from other customers surveys and what actions you took as a result of that information. Without this closure of the feedback loop before each new survey, and the demonstration of a response to the input, all the survey becomes is an academic fact finding activity that provided the respondent no value.


Surveys need to quantifiably provide some sort of meaningful value to those people who respond to them. That may be  why we now see so many market survey requests accompanied by some sort of product discount or payment offer. If the surveying entity isn’t going to somehow remunerate me for both my time and opinions associated with their survey, I am not going to waste my time by answering it.

I think the same is true for both employee and customer surveys. If you are not, or cannot demonstrate to the surveyed entity that you place a high enough value on their opinion to act upon it by changing your business or method of interaction with them, then it will be very difficult to get them to respond in any meaningful way, if at all.


Business relationships with customers and employees are the result of ongoing dialogs and activities. It seems that too often we take this daily interaction and feedback for granted and want to rely on the survey for our management answers. It also appears that all too often our customers and employees provide us daily feedback and opinions that we do not act upon in a timely manner. We then survey them for information, but neglect to close the loop back with them to verify what we “heard” and then explain what we did as a result of this information, even if we did take measurable action.


When no feedback is provided or visible action is taken as a result of a survey, each successive survey increasingly loses its value. The willingness of the surveyed entity, be it a customer or an employee, to respond goes down and eventually all value associated with the survey is lost. You then become just another survey amongst the numerous surveys that we all seem to get, and don’t bother to respond to.