We are all familiar with the saying that speed matters in business. Similarly, if everything else is the same, faster is better in business.
What we don’t talk about often enough is who needs to be faster.
Does an individual need to be fast?
Does a department need to be fast?
Does a company need to be fast?
While a generic answer to those three questions would be “yes”, it isn’t always clear when you look at specific situations. In fact, when faced with the above three questions for a specific business process, the answer should always be to optimize the company over department and individual.
This is hard for some to accept. Especially if individuals or departments have metrics for their part of the overall process. For example, imagine a returns process for a manufacturing company. Customer Service may take the initial call, receiving has to accept the product, quality has to check the part, inventory has to restock, finance has to refund the money. There might be a metric measuring the speed that Customer Service responds to the customer and gets the customer an RMA number. That’s a metric that is good for the customer, right?
Maybe. Maybe not. If there are situations where parts are returned inappropriately or other departments have to go back to the customer for more information, it may be better to slow down Customer Service (more verification or returns, gathering more information, etc) in order to make the entire process faster.
Another situation you might face is when a forward-thinking department manager implements metrics enthusiastically. Typically, they only want metrics that measure how their department is doing, not for the whole company. “My team can only control part of the process.” “Why should we get measured on things we can’t control?” All valid concerns. If there are no process-wide metrics, the department-level metrics can give a false impression of the larger process.
Optimizing the entire business process should be more important than any particular department or individual. Make sure your metrics and incentives focus on the larger picture.