Motivating through metrics - Audio slideshow with text transcript

Hi, it's Paul Rogers here. I'm the partner in charge of our organization practice at Bain. And I wanted to give you some short thoughts on why we believe the front line is so important for success in business and why metrics are important to the front line.

For most businesses, particularly customer-facing ones, it's the front line that makes or breaks the customer experience. On the left of this chart you can see responses among loyal shoppers and non-loyal shoppers to the question "What drove your great shopping experience?" and you can see that the service received was by far the most important for both groups. On the right, you see the same question asked about a bad shopping experience and service was overwhelmingly the reason.

What's perhaps interesting about this chart also is that price doesn't feature on either.

So it's not hard to understand that the front line can be critical to success. We find that great companies invert the pyramid in the way they think about their organizations. And what We mean is that instead of thinking of the front line as just a bunch of low-paid staff who need to be directed and controlled, they turn the whole equation around and think of the front line as the most important employees in the business, and the role of the support activities not so much to monitor and control-although of course they need to do some of that-but more to help the front line be more effective.

Inverting the pyramid means helping your frontline employees go beyond good service to really delight the customer.

On this slide, an example taken from the Four Seasons, you can see on the left perfectly adequate service. The customer is asking for some information, the check-in receptionist doesn't have it, but he quickly gets it and answers the customer's question. Job done. On the right, not only is the check-in person better prepared, he actually appears to have eaten in the restaurant himself and can recommend something personally, putting him on a completely different level with the customer, and then goes beyond the initial question to make a personal recommendation. This is a customer that feels truly special.

So if that defines great service the question is "What is the role of metrics in helping achieve it?"  One of the companies that really took to this early is Enterprise Rent-A-Car. Enterprise Rent-A-Car is by any measure, the most successful car rental company in North America.

For many years, Enterprise has used an absolute focus on delighting the customer and on measuring that as a primary vehicle for the way it manages and motivates its frontline employees. The specific technique is called ESQi, the Enterprise Service Quality index. This shows the percentage of customers who rate a branch five out of five when asked if they were completely satisfied. The average branch hits perfection to 80% of the time.

But branches that are below the corporate average are rigorously tracked and subject to penalties, such as nobody in the branch being able to be promoted until they get back up to the average or above.

ESQi is quoted by Enterprise management as one of the keys to their long-term success.

Now, important as they are, frontline metrics are seldom the whole answer to helping the front line be fully effective. We rarely find a silver bullet in business and frontline metrics are not a silver bullet.

What you see on the final slide are just some of the other ways in which Enterprise Rent-A-Car reinforces the ESQi approach to build an integrated organizational system to help the frontline be effective. So this includes the people that it puts into the roles-I believe Enterprise Rent-A-Car is actually the largest single graduate recruiter in the US-the role and accountability that those individuals are given, the pay and rewards they're able to earn, and the culture that Enterprise creates around delighting the customer.

So let me summarize, we do find that an absolute focus on helping the front line delight customers is vital to success in many businesses. Metrics can play a critical role in helping achieve that, although even when you have the right metrics effectively deployed, it's also essential to align the other elements of the organizational system.

Thank you.