I visited with a dietician on Friday. I was searching for advice on how I could reduce my cholesterol. I am just not keen on taking drugs for the next 50 years to solve this problem.
Cholesterol is a leading indicator for developing heart disease. It is cholesterol that attaches itself to the walls of the arteries, calcifies, and forms plaque. It is restrictions in the arteries that causes heart attacks and strokes. So the relationship has always been:
Treatment -> Reduce Cholesterol -> Reduce Heart Disease
Heart disease and cholesterol have become permanently bonded in the public conscious. The trouble is that some treatments for high cholesterol don’t necessarily show reductions in the occurrence of heart disease. My dietician says drug therapies can be used to control cholesterol, but they have never been proven to reduce your chances of having a heart attack. That really struck me.
Statins -> Reduced Cholesterol ? Reduced Heart Disease ?
We talked alot about the Portfolio diet. This is range of foods based on the Mediterran diet. It has lots of fruits, vegetables, whole grains, legumes, and fish. What is significant about this diet is that it has been studied and proven to lower the chance of developing heart disease and heart related incidents.
Portfolio Diet -> Reduced Heart Disease
I think there is a corollary here for business. Companies often develop measurements to track success. These are often internal measurements meant to promote certain behaviors in the organization. I think often companies don’t research and study what (if any) impact these measurements will have on their goals. They don’t appreciate the systemic issues surrounding their overall goals.
I have always thought that on-time delivery was one of these types of measurements.
Eliminate Causes of Late Deliveries -> Improve On-Time Delivery -> Improve Customer Retention (Happier Customers)
You can definitely make a strong case for correlation between on-time delivery and customer retention. Customers won’t put up with bad promises for very long and take their business elsewhere if they have to.
When people start to look at the causes of late deliveries, they see all sorts of things. Typos in the order taking. Freight company takes an extra day to get it there. Material shortage. Change from product development group. Failure in quality testing.
Fixing any one (or all) of these things will improve the delivery metric. I would make the argument that none of those fixes really improved your customer retention. You simply improved a measurement.
Eliminate Material Shortages -> Improve On-Time Delivery ?Improve Customer Retention (Happier Customers)?
You have to look at the company on a systemic level. If you want to improve on-time delivery, you need to get your lead time to as close to zero as possible. The whole company has to change the way they do business to enable that change. Product Design. Factory layout. Vendor Quality. The systemic improvement in performance will undoubtedly improve customer retention.
Reduce Leadtime -> Improve Customer Retention (Happier Customers)
To bring it back to the cholesterol story, in some ways, people are fooling by taking medication. The need to take a systemic approach to their problem. They to stop smoking. They need to exercise. They need to change what they eat.
So, measure the right thing and figure out the rights things to impact the measurement in business (and in life).