I’m writing this in a big hotel in one of Europe’s capitals. I came here to deliver a keynote. It is part of an international hotel chain.
Yesterday, when I checked in, I tried to connect to the WiFi. To my surprise, I found out I had only two options for connecting: to join the chain’s loyalty program or to get free WiFi for just 24 hours.
It felt like I was being forced into a shotgun wedding.
I know why it’s like that. This problem has its roots in a common superstition in management.
Measurable vs manageable
Business bloggers writing about ‘data-driven decisions’ like to quote Peter Drucker: “What gets measured gets managed.”
The quote has two problems:
- Peter Drucker never said that
- That’s not true
You can measure net cash flow, return on equity, or average product delivery time. But you can’t measure customer attitude towards your business.
- NPS, CSI, customer lifetime value, CSAT, and other similar metrics are just surrogates. They tell you as much about customer satisfaction as the number of hours you spend with your kids reflects your relationships with them.
Sometimes, measuring nothing is better than measuring just for the sake of it.
- On the way to the ivory tower where executives make strategic decisions, these numbers get aggregated and averaged – and completely lose touch with reality. But executives trust the metrics and make decisions based on them.
As we used to say back home, “That’s like measuring the average body temperature in a hospital,” technically correct, but totally useless.
- The company leadership doesn’t explain to employees that their wages come from customers, not executives. So, employees try to please bosses, not customers.
By forcing me to join their loyalty program just to get basic Internet access, the hotel management is just trying to boost one of those metrics. Guess how many new loyalty program members they’ve got—and how little loyalty they’ve earned.
Of course, company leaders should have some numbers to help them navigate the business through the competition.
But if a CEO or an executive conducts as few as two or three face-to-face customer interviews per month, they don't need a lot of data to make the right strategic decisions.
Customers will tell you stories numbers won’t.
