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The 4 Key Reasons Most Organisations Underperform Against Targets

By Guy Arnold and Russell Wood

Every organisation wants to hit targets and achieve their goals. Yet, so often, this is much harder than they expected.

This is often put down for reasons such as:

  • The market was tougher than expected.
  • People underperformed against expectations.
  • Something happened outside our control.
  • Our marketing wasn’t as effective as we wanted it to be.
  • Our competitors undercut us.

And the list can go on forever: repeated every year, we have our expectations dashed and people feeling frustrated rather than happy and progressive.

When we examine under the surface, we find that the real reasons for underperformance are not from outside, but very much on the inside, and very much at the core of everything that goes on inside an organisation.

Four things generally need examining and changing:

  1. Misguided beliefs
  2. Inaccurate focus on what the customers are looking for
  3. Inadequate continual improvement systems
  4. Misfocused measures

A little more about each one of these.

 

Misguided beliefs

Most organisations believe that they exist with the main purpose “to make money”.  But this is a misguided belief: all organisations have a purpose “to do something so brilliantly that people are happy to give them money, come back regularly and rave about them to their friends”.

If we have wrong beliefs, people throughout the organisation will be tempted and in fact targeted to do the wrong things.  For example:

  • Cut costs at the expense of customer experience.
  • Do sales and marketing promotions that are focused on the short-term rather than the long-term.
  • Wangle figures and processes to hit short term goals, rather than long-term reputation and customer loyalty.

 

Inaccurate focus on what the customers are looking for

Many organisations wrongly believe that customers are driven by material needs and price.  While this is of course a major factor that always need to be considered, customers are driven by the emotions: the emotions that they will feel when they meet or exceed their emotional needs, divided by the price they have had to pay to get that.

So, if organisations focus wrongly, they will treat the customers wrongly.  For example:

  • Cutting price so that they cannot give a great experience.
  • Abusing customers by their overzealous marketing.
  • Frustrating customers through difficult systems and processes.
  • Not treating customers as individuals and not demonstrating genuine care and attention.

 

Inadequate continual improvement systems

All organisations need to continually improve.  Even the best organisations will quickly die in this age of innovation and online transparency without continual improvement.  Yet most organisations do not have adequate continual improvement systems in place, and the IT staff working for them very often feel disempowered and ignored.

So, if organisations have inadequate continual improvement systems in place they will not be able to improve and keep up with the market, which is moving at breakneck speed all the time.

 

Misfocused measures

It is very rare to find organisations with fabulous customer-focused lead measures.  Most organisations only have money-focused lag measures.  What does this mean in real English?

Money-focused lag measures are measures of activity, specifically amounts of money that have happened in the past. For example:

  • How much money did we make last week?
  • What was our margin? What were our costs?

The problem with these measures is that they only measure things important to the finances of the organisation.  They do not measure what is important to their staff or their customers, and they do not give any helpful information on how to continually improve, what to change, and what to continue and develop.  The net result of this is that many, perhaps most, organisations tend to be working very much in the dark with regards to what really matters to their staff and their customers, and what they need to develop and change in order to drive engagement, loyalty, reputation and sales.

Customer-focused lead measures on the other hand are measures of what really matters to the people who are going to decide the fate of the organisation: the customers above all else and, making the difference with them, the staff within the organisation.

Our four-step Strategic Sales Through Service system addresses all of these four areas, and empowers organisations to:

  • Build phenomenally powerful belief systems and principles
  • Focus all of their systems and processes on the customers’ real needs
  • Build and operate simple, achievable, powerful continual improvement systems and
  • Have quality powerful measures to drive all of the above and focus everyone in the right area.

Only when all these things are done do you have a genuine chance of continually achieving targets and over-performing against expectations.

Guy Arnold is Founder and Managing Director of Sales Through Service and Investors in Feedback. Russell Wood is a professional trainer and business advisor in the leisure and gaming industry. They are co-authors of The Reputation Book (LID Publishing 2017). Find out more at www.thereputationbookproject.com

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