Cascading Satisfaction

Alignment

I’ve previously used the metaphor of a honeycomb to describe a connected and aligned organization. In Performance Alignment: Cascading Strategy, I described cascading as a formal method for achieving alignment by connecting strategy to operations to tactics. There are four options when cascading objectives or measures from one level (parent) to the next (child):

  • Identical
    The child adopts the exact same objective or measure as its parent.  This is used by groups that want to install a greater culture of discipline or for organizations going through major change.
  • Contributory
    The child modifies the objective or measure to reflect its specific role in helping to achieve its parent’s goal.  Groups that have autonomy but must explicitly describe their contribution to their parents often adopt this method.
  • Unique
    The child develops a measure or objective that can’t be explicitly tied to its parent.  Organizations occasionally allow this independence when they want the child to focus on an outcome without distraction (e.g., skunk-works).
  • Shared
    All the children at one level have a jointly-shared need that is not shared by their parent.  This is used when organizations consolidate common functions (i.e. printing, call center) into shared services.

Imagine an organization with the corporate objective of to “increase customer satisfaction.” The organization might monitor that objective using a quarterly survey of its customers to create a customer satisfaction rating measure. Now, suppose that the objective is cascaded identically from corporate to an operating division. If the operating division wants to monitor customer satisfaction, should it conduct its own survey? Probably not.

Instead, the operating division might recognize that it can show its contribution towards customer satisfaction by focusing on customer retention or lifetime value. As such, it begins tracking the percentage of customers that buy again each quarter. Presumably, satisfied customers keep buying.

If the operating division cascades the customer satisfaction objective down to the VP of Operations, she also needs to design a measure that shows how her organization contributes. Since an operations group has little direct interaction with customers, neither the survey or repeat purchases are appropriate measures. Instead, the operations group could use “% of deliveries that meet service level agreement.” Improving on-time delivery contributes to higher customer satisfaction.

The organization could continue to cascade the objective to plant managers, shift supervisors, and even individual employees by creating measures to show how they contribute to customer satisfaction.  I’ve provided some examples in the following table:

Example Cascade of Measures

Suppose the shift supervisor’s measure of “first pass yield” is cascaded identically to the employees on his shift.  The shift supervisor explains that if the number of widgets that need rework goes down, customer satisfaction goes up.  Afterwards, employees directly understand their contribution to corporate objectives.

That’s what I call alignment.

Photo Credit: Texas Photographer, Matthew T Rader

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7 Responses to Cascading Satisfaction

  1. ewH March 25, 2007 at 4:17 am #

    Hi Jonathan,
    I had the chance to see a demo of PilotWorks this past week during a meeting at SAP Labs US. It looks like a really nice product, and it will be interesting to see a future integration with Netweaver.

    As an applications developer working for a consumer goods company, reading your blog gives me insight on the thinking/strategy of performance objectives in this type of organization. Unfortunately, technology and manufacturing processes don’t always mix well, and it’s hard for traditional, conservative corporations to break away from treating IT as the same.

    Cheers,
    -ewH

    • Jonathan March 31, 2007 at 7:17 am #

      Thanks for taking the time to read my blog and glad you enjoyed the PilotWorks demo. Developers are already hard at work on integration with Netweaver and you should see the first-cut results very soon. As it turns out, I’m in Germany at the moment and one of the topics is the 2008 roadmap. Send in your wish list.

      As you already know, effective performance management involves people, processes, and systems. No one likes to use the phrase any more but it requires change management. If you haven’t already, check out the book “The Geek Gap: Why Business and Technology Professionals Don’t Understand Each Other and Why They Need Each Other to Survive” by Bill Pfleging and Minda Zetlin. It has some great anecdotes and ideas visa vis the divide between suits and geeks.

      I’m off to check out your blog.

  2. ewH April 1, 2007 at 1:53 am #

    Jonathan,
    Thanks for the tip; I just added ‘The Geek Gap’ to my Amazon wishlist. 🙂

    As for the supply chain team that I talked to, they are chomping at the bit to use your application; so for them, their wishlist for the 2008 roadmap is to make it the 2007 roadmap instead. 🙂 Seriously, I think you will find the Netweaver integration the biggest priority for most. A lot of companies see the long term vision for SAP as “one system to rule them all”, so they get a little uncomfortable when they have to stray far from that path.

    Cheers,
    ewH

  3. Matthew (@Matthew_T_Rader) August 8, 2014 at 11:17 am #

    Hello,

    I noticed that you used a photo of mine on your webpage:

    The photo of the bee on the honeycomb.

    I don’t mind at all and I’m glad you found it useful to use on your website. Can you please credit me as the photographer of the photo beneath it or some where on the page like this:

    Photo by Texas Photographer, Matthew T Rader

    Thank you

    • Jonathan Becher August 9, 2014 at 2:00 pm #

      Hi Matthew,

      As this post is from 2007, I can no longer remember where I found the image which I believed was in the public domain. I’ve added a photo credit to you, just in case.

      Regards,

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