What goes into measure selection and design? How do you know you have the right measures? Have you considered the law of unintended consequences? So often I receive calls from companies that started with a viable strategy only to have the measure drive the wrong results. How does this happen? Maybe we call this segment “When bad things happen to good strategies”?

The case is a telecommunications company call center with a strategic objective “Resolve Customer Complaints Efficiently.” The working definition focused on resolving inbound customer complaints in an efficient manner with dual outcomes of (1) satisfied customers and (2) an efficient, low-cost structure in today’s challenging environment. The team was on to something.

However, the next step is where things started to go awry. The balanced scorecard team brainstormed measures and arrived at what appeared to be a reasonable leading indicator for the strategic intent: “percent of calls resolved in 60 seconds.” “This leading indicator will drive higher customer satisfaction or lagging indicator results,” stated the Call Center Director. (As an aside, I would argue you do not want to include the measure target of 60 seconds into the measure name, but so be it.)

Management was delighted; the scorecard performance for the leading indicator was bright green every month! However, in a few months they noticed the lagging customer satisfaction was actually going down, not up.

How can this be? We are green! Upon further investigation and review of customer comments, they discovered that customer calls were consistently being dropped, at around 60 seconds. Hmmm. This was clearly an unintended consequence. Did the BSC measure drive this behavior? One can only speculate.

The balanced scorecard team revised the measure, to “percent of calls resolved on the first contact,” and sure enough customer satisfaction scores rose in subsequent months (lagging indicator).

In summary, leverage the talents of experienced employees — and occasionally practitioners — to design your measures and reinforce those good behaviors. ###