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Are You Measuring and Rewarding The Right Stuff?
Workplace metrics impact workplace behaviors and
performance. Strategic buy-in and strategy
execution hinges on the ability to measure success accurately and
transparently. Designing the right strategy success metrics can mean the
difference between a leadership team collectively steering toward its strategic
targets and veering off course.
Designed properly, metrics provide clear direction,
motivation, and accountability. Designed poorly, they can lead to
unwanted behaviors, misaligned actions, and unhealthy cultures.
Consider the infamous example of Wells Fargo.
Wells Fargo: Strategy Success Metrics Gone Bad
To best implement their customer growth strategy, executives
identified metrics linked to cross-sales to customers to measure
performance. Makes sense right? Satisfied customers should buy more
products and services.
Unfortunately, the obsession with the success metric (and the
associated rewards for achieving it), caused the sales force to lose sight
of the strategic intent to build long-term and mutually beneficial customer
relationships.
Wells
Fargo opened 3.5 million deposit and credit card accounts
without their customers’ consent to meet aggressive targets. And, in turn,
severely damaged the long-term relationships that the bank strategically
sought in the first place.
They were fined hundreds of millions of dollars, damaged
customer relationships, and sullied their brand. In hindsight, it is
easy to see that “cross-selling” by itself was not the best or only of way
to measure and align with building long-term and mutually beneficial
customer relationships.
There is a better way to align metrics with strategies.
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