Todd Hollander Market Research

The results of a survey conducted by Deloitte Touche Tohmatsu (DTT), in cooperation with the Economist Intelligence Unit (”In the Dark II: What many boards and executives still don’t know about the health of their businesses,” April 2003), reveal that “Many board members and senior executives are still in the dark about the overall health of their organizations because they lack high-quality non-financial information” such as customer satisfaction data.

The survey found that companies are under increasing pressure to measure non-financial key drivers of performance such as customer satisfaction, innovation, and employee commitment, but their ability to measure non-financial drivers is severely lacking. Specifically:

• 87 percent said their ability to track financial measures is “Excellent” (43 percent) or “Good” (44 percent)
• Only 29 percent described their ability to track non-financial measures as “Excellent” (5 percent) or “Good” (24 percent)

Deloitte CEO William G. Parrett concluded:

“This report clearly shows a disconnect between demand and supply. Boards and management teams by their own admission see that the information they need is not the information they are receiving. So as this latest report on the state of non-financial reporting reveals, there is much more work to be done.”

Based on this information, one might reasonably ask: “If companies know they need to do a better job of measuring customer satisfaction and other non-financial performance metrics, why aren’t they doing it?” I believe one of the biggest reasons is that management is not held accountable for customer satisfaction. This is confirmed by the Deloitte study, which revealed that while 84% of companies said they hold management accountable for financial results, only 36% said management is accountable for customer satisfaction.

The bottom line: If your company does not hold management accountable for customer satisfaction, it probably will not be measured well or perhaps at all.

This entry was posted on Thursday, April 5th, 2007 at 2:41 pm and is filed under Customer Satisfaction. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.