Friday, April 14, 2017

No More Threes

I never expected a professional basketball player to be the inspiration for a lesson in client service.

In business there’s an old adage: you get what you measure. For example, if a company is measuring how many days it has gone without a safety incident, efficiency may suffer. Workers may do things more slowly or with undue care because moving quickly and having an accident would ruin the company’s safety record. So the company measures safety and it gets safety; but at the expense of efficiency.

When negotiating contracts with clients, I see this challenge arise when we are developing the service level agreement. This is the part of the contract that lays out how the parties will measure the performance of the services, such as system uptime; how fast we respond to issues; or number of transactions processed per day.

I take a great deal of care discussing service levels with clients because sometimes what the client asks to measure will not reflect how well the delivery team is doing. The client may complain that the services are inefficient, and that may be because we’re measuring safety! So I strive to focus the measurements on what matters most to the client’s desired business outcomes.

This week I smiled when I read a story about a decision NBA player Moe Harkless made in the last days of the season. Harkless plays for the Portland Trailblazers and has a contract with certain performance incentives. One of them is a payment of $500,000 if his 3-point shooting percentage is at least 35% for the season. On April 4, Harkless decided: No more threes. Why? His percentage for the season stood at 35.05%. One missed 3-pointer would take his average below 35% and cost him a half-million dollars. That’s an expensive brick!

Consider that Harkless was not being measured on number of games won. So the Trailblazers could lose a game without consequence to Harkless because that’s not how he’s measured. Once he hit 35% he’s met his service level. And the owners got what they measured, 35% 3-point accuracy, even though what they really want is wins! The 3-point clause did not make Harkless less competitive, however. He switched to driving to the basket. He was still going to take shots; just no more threes.

So before you and the client leverage some form contract or previous deal to measure delivery performance, have a conversation. What matters to the employees? What matters to leadership? What determines business success? Measure those things that will help your client feel like they are “winning” in their business. Because they’ll get what they measure.

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