Fads Trip Up Organizations

An associate of mine used to say the stairs to hell were lined with failed business programs and fads. Some of them were hellish, most fortunately just didn’t work and the people responsible for implementing them quickly defaulted to lip service mode. No business leader’s education is complete without reading about failed fads. Start with Forbes and the Financial Times but be careful of your time. They’re very compelling (time suck). You’ll also learn that the fads were ultimately very effective in generating revenues - for the originators and practitioners - from books, consulting, speaking, training and certifications.

 

Although the Net Promoter Scale is an option in all of our applications, I’ve been questioning NPS since it was introduced in 2003 and quickly read The Dubious Management Fad Sweeping the Country on the front page of The Wall Street Journal. The title was misleading but the letters in response to the article much less so. Alan Weiss of East Greenwich, Rhode Island wrote:

I’ve seen bizarre and simplistic metrics applied to try to hype performance statistics, but the net promoter score takes the cake. A customer responding to a corporate survey saying he would recommend the company to someone else means absolutely nothing. What matters is whether he actually does recommend it, and whether it results in increased business.

 

NPS is generally based on a single question:  How likely is it that you would recommend [Organization X/Product Y/Service Z] to a friend or colleague? Respondents give a rating generally between 0 and 10, 0 (not at all likely) and 10 (extremely likely) and, depending on their response, fall into one of three categories to establish an NPS score:

  • 9 or 10. Promoters
  • 7 or 8, Passives
  • 0 – 6, Detractors

 

I was first troubled that NPS measures whether or not respondents say they would recommend. I’ve known consumers and B2B buyers that for good reasons and questionable, would never recommend the products and services of which they thought highly. How do they respond to a NPS survey?

 

Evaluating performance based on whether not a product or service will purportedly be recommended is related to the conflation of feedback and social media. And that doesn’t work. Social media is driven by traffic – advertising revenues, as are the leads-matching platforms. Feedback requires more.

 

If you measure right, you get what you measure. The wrong measures trip up people and organizations. Do you want your organizations to be driven by potential recommendations, or simply what the customer thinks of the product or service? Do you want to buy from organizations that are more interested in you selling for them, or simply, "How did we do compared to your expectations?"

 

That said, we’ll continue to offer NPS scales to our clients. We want to give them what they want.