Someone recently asked me whether I use metrics when evaluating a company. The way I see it, when an entrepreneur is busy getting his/her business off the ground, metrics is probably not the first item on his agenda. I believe the primary concerns are about production, sales, account receivables, cash flow, personnel, and so on.
Let’s say that a company has been in existence for awhile and manufacturing a widget. The machinery makes 5 units an hour. They are able to manufacture, sell, & deliver the amount made with the people they have. A new machine comes on the market that can make 20 units an hour. So this is where measurements come into play.
Some questions would be:
(a) Does the equipment require either specialized training or additional employees on the machine or does the machine use different materials? Is the widget a superior product?
(b) Can they sell the additional units at a competitive price?
(c) Do they need another delivery truck & driver?
(d) Will the space in the warehouse/office be sufficient?
(e) Can the current sales handle the additional work or will they have to hire another sales person?
(f) Will another administrative person be needed?
This is where measurements can be useful. Sometimes a new machine may be cost prohibitive unless every other affected concern is addressed. There are times when it is best for an entrepreneur to remain at his current stage successfully rather than expanding, because expansion may bring fear, uncertainty or unable to move ahead.
Where I believe measurements are very inaccurate is customer service calls. Most of us have called a company and heard that the conversation is being recorded for customer satisfaction. I am sure that many of you have had a similar experience to mine. I called a company and they sent a service repairman to mend a problem. He didn’t do the job and I called the company to tell the service department that the problem still existed. They sent another repairman out and it was partially repaired. As it turned out, they charged my credit card twice. It took several months of letters and telephone calls to credit my account for the additional charge. When I asked for a supervisor, I was told no one was available. In the meantime my telephone calls were passed from Bob to Carol to Ted to Alice and then back to Bob again. This merry-go-round was finally resolved when a letter was sent to the Attorney General’s office.
So, from a customer service point of view, each person that I spoke to and who transferred me to someone else recorded his call as completed and had the “appropriate person” handle my call. However, there was no customer satisfaction anywhere and nowhere is it recorded as such.
So, to me, this is a wasted exercise and cost unless someone calls the customer back or sends a survey written in a way to allow for the customer’s real feedback.
