The second session was by Satmetrix's James Young, Managing Consulting - Europe. James discussed goal setting and best practices for actioning business improvement by setting appropriate goals. I think this is a very important topic, and one that I've heard much discussion and debate, especially when wanting to tie compensation to these targets.
James believes that having a step-by-step process approach for setting up appropriate goals is critical. He reiterated that the process should be based on the foundation that had been raised by previous Satmetrix presenters, which contains the 4 main pillars: Executive Foundation, Organizational Alignment, System Infrastructure, and Process Integration.
The specific process James reviewed was:
- Set Strategic Direction
- Capture Customer Experiences
- Target Value Drivers and Action
- Leverage Functional Processes
- Balance Targets and Align Strategy
James also noted the importance of directly linking goals to drivers of loyalty using statistical techniques. He showed a cascading approach, and used a pyramid diagram to convey the details. At the top of the pyramid was Net Promoter Score (NPS), then it moved to functional level goals, and then event or transactional goals at the bottom. The point I took away from this is that one metric is not enough to truly achieve your objectives. James points out that in order to make improvements across the business you must set goals that are relevant in the various operations in the business. This includes setting goals all the way down to the front line employees. Setting goals on solely on overall aggregated NPS is just not enough.
James also talked about how important it is to continue to reevaluate your goals over time. Targets will move. While you may take great care to set initial goals, often times business conditions and priorities change and as a result your goals should reflect these changes. This will more easily allow you to track performance against these goals as they relate to corresponding financial performance. James suggested that setting a periodic review process is an effective way to achieve this.
Goal setting is a complex undertaking, but James's structure seems to address the key issues to consider. I really enjoyed this session.