Many organisations take measures that actually undermine their capability. The measures encourage behaviour that is inefficient and/or not in the customers’ best interests.

An office electronics organisation counted machine placements at the end of each month. As a result branches offered free trials, put machines out on loan to friends or did anything they could think of to achieve the desired number. The impact of this behaviour on the efficiency of the warehousing/transport organisation was ignored (after all, it wasn’t counted).

An engineering service organisation counted quarterly revenues for its branch operations. This resulted in installation contracts being moved forward or backwards (to suit branch numbers rather than the customers) and customer being billed for as much ‘extra works’ as possible in the knowledge that credit notes would have to be issued in the next quarter. Two customers even paid half the purchase price of their equipment and, after nine months, were still waiting for it to be installed – the problem was that the revenue value to the branch was not sufficiently attractive compared with other contracts in hand. The priority was to meet the revenue targets.

The intent of measuring revenues at branch level is reasonable – you want to know that the business will perform consistently, i.e. to budget. To use measures as targets, however, will often increase costs and destroy the relationship with customers.

It is far more productive to take measures of sales capability. It helps you understand how stable sales are; the more stable the easier it is to organise production. The easier it is to organise production, the better the service relationship. The better the relationship the more you sell.