In 1943, the Royal Air Force looked for quick fixes to improve the probability that their bombers could complete their missions and successfully return home. One option was to add armor-plating, but what was the optimal placement which would ensure maximum protection without compromising the aircraft’s performance?



The accepted thinking, based on the data collected from returning bombers, was that the wings, nose, and fuselage should be armored up. They, after all, had the most bullet holes.



It took a gifted mathematician, Abraham Wald, to highlight that the best solution would, in reality, be to armor the three areas that never seemed to get hit: the cockpit, the engines, and the tail.



He had correctly hypothesized that the bullet patterns would be evenly distributed and, therefore, the planes that did not return had been taken down due to weaknesses in these three key areas.



This is a wonderful story as it highlights how, if you want to be effective using data for strategic decision-making, you have to think deeply about both the data you have and the data you don’t.



Companies, surprisingly, despite their significant investment in technology, still seem to succumb to their own version of this data selection bias.



For while they do not have to worry about the negative consequences of suboptimal armoring, they do need to optimize the placement of resources, to ensure they provide maximum customer value without compromising their ability to scale profitably.



The data they consistently seem to ignore when making these types of resource decisions is that which exposes the real value they bring to their clients.



I’ll use the case of mid-size Asian bank, DBS Bank, as an example. For years they had managed their business using key performance indicators (KPIs). These KPIs helped them to focus on efficiently distributing their products to millions of retail customers.



Call centers, for example, would typically focus on reducing call abandonment, queuing times, handling times, and improving first call resolutions.



And I suspect that over time DBS were able to improve productivity and offer a more streamlined service to their clients.



But although these metrics no doubt helped the company reduce its costs, it reportedly added extra ones for their customers.



And the cost that seemingly annoyed their customers the most was the extra hours they had to waste, dealing with the bank.



So it was Paul Cobban and his team who realized they were managing using the data they had, not the data they needed. So they pivoted and reset the strategy to focus on improving just one metric: reducing the time customers spend dealing with them. Now, their teams had to think more deeply about how to ensure their customers didn’t have to call centers, write emails, travel to branches, or wait in long queues.



Cobban estimated that this process was able to “take out at least 250 million wasted customer hours per year”, as per a 2016 article in Forbes.



This helped DBS transform from being recognized as one of the worst banks in Singapore to becoming one of the best and most loved.



It must have taken courage for the team to stop worrying about internal metrics and start trying to develop customer-led ones.



Especially when business schools and consultants are still extolling the virtues of balanced scorecards based on the assumption you can’t manage what you can’t measure.



The truth is, these management systems tend to reinforce selection bias. This occurs as executives often shape strategies around what is straightforward to manage and quantify, rather than exploring the often ethereal data sets that help identify where the real client value lies.



Aligning compensation with easily quantifiable metrics such as revenue, profit margins, or operational efficiency is much simpler than assessing the value a client derives because you saved him time, or amplified his brand, or increased his profits, or made him happier, or reduced his stress levels.



Still, working out the bullet patterns on planes that are hundreds of meters below the sea wasn’t easy either.



Predicting how best to serve your customers, without understanding the actual value you bring them may have worked in a world where change is slow and the future is predictable.



That world, I’m afraid, has gone.

Business people working in a board room with a laptop and digital tablet

Why KPIs Can Kill Companies

Financial services company RCS, a Top Employer for 2019, is driving new ways of working and empowering employees to take ownership of their career development.
&nbsp;
I am inspired in my ambition to run a successful business because it not only creates job opportunities that put individuals in positions where they are able to support themselves and achieve their dreams, but also their families’, says Regan Adams, CEO of RCS. RCS, a financial services company that was bought by BNP Paribas in 2014 is in the midst of an exciting business transformation. Adams believes that this transformation will be achieved by driving a new culture and new ways of working. It is exactly this belief that informs the HR strategy, which places employees at the heart of the business’ transformation, ensuring that they are equipped and empowered for this change. This strategy was created through a strong collaboration between the local HR team, the business, and support from the BNP Paribas Corporate HR team in Paris. With the solid blueprint in place and the wheels set in motion, the HR team embarked on the journey for RCS to become accredited as a Top Employer. Sandi Richardson, Deputy Head of HR explains that this accreditation is not only a prestigious accolade for RCS but will continue to elevate the HR team’s delivery through the benchmark reports and feedback provided by Top Employer. Richardson says that participation in the Top Employer certification process will deliver a sustained and strengthened performance, supporting the team’s mission to make RCS a great place to work.
Richardson says that this is an exciting time for the RCS team. The HR function have accelerated their own transformation with the introduction of a BNP Paribas sponsored, digital employee tool, called ‘About Me’. This tool is intended to empower employees to take ownership for their career development. ‘About Me’ puts the employee in the driving seat of their career by integrating the individual’s data around their career preferences and professional profiles. The use of algorithms then suggests learning and mobility offerings from both the Learning Management System and Recruitment tools. This tool also hosts the employee’s appraisal (including the functionality for continuous feedback) and personal development plan. The digital nature of the tools means that it promotes transparency, flexibility and accessibility in these fundamental topics.
RCS equips its leaders to lead differently by providing Leadership Development programmes that are not only focused on the technical aspects of transformation but the behaviours required of those entrusted to guide its teams. RCS employs many new entrants to the labour market, particular into its call centre. A host of development programmes are put in place to support the growth of these employees. Some of these initiatives include secondments across the business, an internal graduate programme and financial assistance to fund their tertiary education.
RCS further invests in the wellbeing of its employees by providing holistic, world class wellness facilities both onsite and offsite. These include clinics providing primary healthcare, gyms, fitness classes of varying natures to suit the diverse preferences of its employees and a host of initiatives throughout the year. RCS also invests in the education of the children of their qualifying staff, through its annual bursary programme.
This drive to empower extends beyond the borders of RCS as Adams explains that RCS strives to be an organisation that contributes to the building of South Africa’s nation. This is done through various contributions and the efforts of its employees in a number of organisations and projects that are focused on the upliftment of the communities within which RCS operates.

shutterstock_38724898

Transformation Through People

For Continental Tyre, it is critical for its employees to know and understand how wealth is created and distributed.
&nbsp;
By Genevieve Jozaffe-Naidoo, Training Management and Organisational Development (TMOD) Manager
&nbsp;
Care is a verb at Continental Tyre South Africa, which is why the company has consistently been named a Top Employer in South Africa.
It is critical for all employees to know and understand how wealth is created and distributed within the organisation.
Equally, every employee needs to appreciate their individual contribution towards common goals. To this end, our leadership team has established line-of-sight for each employee. 
Growth and profitability can only be achieved through shared purpose and values (Trust, Passion to Win, For One Another and Freedom to Act), coupled with employees’ talents, motivation and willingness to learn.
Our values unify how we engage and challenge our actions, results, successes and opportunities. Trust and transparency talk to just some of the lived values of our leadership team – sacrificing short-term gains for long-term growth. The leadership team have committed their time, efforts and minds being of service down the line to create “one Continental”.
Over the past few years, there has been significant investment in building our people capability. Hosting development programmes aimed at enhancing critical skills was just one of the interventions we undertook.
2018 has certainly challenged our business. This year – in the spirit of building capability – business sustainability and humanising the scoreboard has been our priority. Political and economic uncertainty, both locally and globally, has created added pressure to deliver affordable, quality products consistently. These challenges have brought us full circle to our values.
Our people have responded well to these challenging times. Dialogues and joint action planning define our culture, with various platforms accommodating multi-faceted conversations. We are motivated to change our lived experiences by creating alliance and value, striving always to be an attractive and progressive employer.
Participating in the Top Employer awards has been of tremendous use in raising our awareness on policy, process and practice. Additionally, it has added value to our brand. Continental Tyre South Africa’s 70-year presence in South Africa is evidence of our leadership and learning agility. Our organisation is fully geared toward shaping our future in motion.
OUR PEOPLE, OUR CULTURE, OUR FUTURE.

Tag: Employer

FORBES AFRICA SOCIAL MEDIA

Why KPIs Can Kill Companies

Transformation Through People

Continental Tyre’s Values Create Value