The right measures of success

Bawa Grover | Updated on March 10, 2018 Published on November 19, 2015

High output: How the product/service of an organisation affects customers/users should be the standard by which it is rated   -  THE HINDU

Benchmarking organisations public and private on customer satisfaction can help India mature

As India matures and aspires to join the league of developed mature nations, the question that begets reflection is what are some key measures of success?

And how will we “measure”, if we are getting there and moving in the right direction?

Like any country, India is essentially an aggregation (and sometimes integration) of organisations across private, public and government segments, which serve customers, users and citizens operating in various sectors for commercial, social or other purposes.

Change the metrics

Should we “measure success” by “size of infrastructure/ inputs” or “output” metrics?

As illustration of the question, should we measure “input” metrics such as size of infrastructure, length of roads, number of bank branches, number of ATMs, number of telecom subscribers, number of schools, hospitals and hospital beds, or should we instead re-focus on measuring “output” metrics such as quality of products and services delivered to customers, users, citizens?

In other words let us focus on “outcome or output” metrics such as customer satisfaction delivered by organisations, such as by a bank, insurance company, telecom service provider, educational institution (quality of education imparted), hospital (i.e. healthcare quality), ease of roads traversed.

There is no point counting the length of railway lines, number of schools, and having classrooms empty or delivering poor quality education, and there’s no point having hospitals which are poorly managed, staffed and with poor delivery standards, or public toilets which are built, but not serviced/maintained/functional.

While “input” - infrastructure metrics are important (as without the “inputs”, output may not be feasible), I am of the view that 68 years after Independence, it’s more important in India today to re-focus on objective “output measures” such as speed, timeliness, responsiveness, quality, services in different sectors.

And we should leave the “how to deliver/improve these services” to the management of the respective organisations’ to figure out including, when necessary, strengthening the inputs and delivery processes. This is, of course, a radical shift from what we have been used to as a nation and society, but it’s about time we move emphasis on outcomes, so customer, user, citizen satisfaction improves and India matures.

The management and operating teams of organisations are responsible for optimising the operations and their functioning, including deploying, improving and operationalising “inputs”. With the shift in emphasis we can improve accountability, results and end-customer satisfaction, which is the essential “output metric” we should be measuring.

Once we start measuring the right outcomes, it may be logical to also benchmark quality of customer satisfaction delivered by organisations with their peer group, within and across sectors and then go beyond to generate diagnostics on what levers to deploy and change to improve customer satisfaction (including if necessary strengthening the “inputs” and/or other aspects of the management of the organisation).

How to measure outcome

But is it feasible to measure “outcomes or outputs” of organisations?

Yes, it is being done in most developed (mature economies) as well as in some ambitious emerging economies.

In economies such as the US, the UK, Sweden, Singapore, they actively use output measures such as customer satisfaction to measure, benchmark and drive improvements in organisations – for example, the American Customer Satisfaction Index (ACSI) and the UK Customer Satisfaction Index (UKCSI), which are both independent research and consulting organisations.

Similar parallels exist in many other countries, but in India, the World Bank “Ease of doing business” ranking and benchmarking of economies is the closest outcome measurement parallel we have (although it is a hybrid model of both “input” and “output” measures). India is unfortunately not ranked too highly (#142 in 2015) at a global level, but the good news is that because it is being measured it has attracted attention in India and there seems to be a concerted plan that GOI is working on to improve on the rankings.

What is good about the above examples of “output” measures is that they are being done independently and are widely regarded and respected as being objective, as research has validated representativeness of these measures.

In this context, it will be pertinent to add that customer satisfaction or outcome-based measurement and benchmarking is more complex than counting “inputs” and is therefore easier said than done, unless sophisticated frameworks of feedback data capture, research, analytics, technology and the entire measurement framework is developed and honed. But like I said, it can be done, is implementable – and needs to be done for most sectors in India – at least in all the B2C segments. Measuring consumer, user satisfaction or capturing overall consumer satisfaction objectively isn’t a simple yes/no answer or a response calibrated on a scale. Rather, it has many complex layers of customer perception and satisfaction integrated, including parameters such as customer expectations, perceived quality (of product and service purchased/received), perceived value (i.e. quality relative to price and price relative to value received), customer feedback and complaint handling quality.

The same approach can be used to measure customer satisfaction (citizen satisfaction) with governments as well. How fascinating and useful will it be if the government satisfaction scores of each State government in India or of each central government agency can be objectively measured and published openly?

Rate governments too

So this approach is relevant not just for the private sector, but equally for any organisation which should be serving its customers, users. While governments have both service and governance roles and its objectives cannot just be serving citizens, we should start measuring citizen satisfaction qualitatively as one of the key metrics, as citizens certainly look to governments to take care of them.

Most societies today have moved past the industrial age, past the age of information and technology. We are living in the age of social media with very expressive and demanding customers. This constituency is becoming far more powerful in society than in earlier eras, where the producer pretty much determined what was provided to customers/ citizens. Hence, in the age of the consumer experience “consumer satisfaction” is even more important for both consumers and organisations today.

Credible and objective information on organisational benchmarking on outcomes will help both consumers and organisations in India. It will contribute to enhancing product quality, service delivery and overall end-customer experience and thereby improve competitiveness of Indian organisations, maturity of our economy and society.

Maybe it’s time for India to consider development of an institution for such outcome measurements.

Bawa Grover is Managing Partner, Hexagon Consulting

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Published on November 19, 2015
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