Avoid the Pitfalls of Goodhart’s Law: How ACT Aligns KPIs for Success

Dec 12, 2024 Matt Mattie

Discover how ACT achieves 98% green scorecards by aligning KPIs with meaningful outcomes. Learn how our data-driven approach avoids Goodhart’s Law.

British economist Charles Goodhart famously stated, “When a measure becomes the target, it ceases to be a good measure.” Known as Goodhart’s Law, this principle warns businesses of the risks of relying on misaligned KPIs that prioritize metrics over meaningful outcomes. For instance, focusing solely on minimizing call handle time may pressure agents to rush calls, leading to unresolved issues, repeat calls, and dissatisfied customers.

At ACT, we avoid these pitfalls by aligning our KPIs with partner success through our unique employee ownership model and a focus on the Total Experience. By emphasizing impactful metrics that drive satisfaction and long-term results, we consistently achieve 98% green scorecards, demonstrating the effectiveness of our approach.

Aligning KPIs with Partner Success 

As a 100% employee-owned company, ACT ensures every Employee Owner is personally invested in delivering value to our partners. This unique alignment drives exceptional service quality and fosters long-term relationships. Unlike companies focused on short-term financial metrics, our Employee Owners prioritize partner satisfaction as the key to sustainable growth, ensuring service quality is never compromised, regardless of complexity or volume.

Our delayered organizational structure enhances agility and responsiveness, with senior management actively engaged in every program. By focusing solely on scorecard performance—not P&L—our operations team is empowered to make outcome-driven decisions, free of hidden agendas, to consistently deliver meaningful results.

Removing Employee Friction to Improve Customer Experience 

At ACT, we’ve optimized over 240 touchpoints to eliminate friction, addressing challenges like limited channels, fragmented processes, and outdated systems. By streamlining workflows and removing inefficiencies, our Employee Owners can focus on delivering personalized, high-quality service.

This focus on Employee Experience (EX) directly enhances Customer Experience (CX). According to MIT, organizations excelling in EX generate twice the revenue from innovation compared to those in the bottom quartile. This synergy between EX and CX is why ACT consistently achieves outstanding customer satisfaction.

Using a Data-Driven Approach to Measure What Matters 

ACT’s data-rich infrastructure provides real-time insights into customer behavior, enhancing partner intelligence and enabling swift, effective responses to market demands. With real-time analytics, our solutions identify optimal sales tactics, driving higher conversions and revenue growth.

Powered by AI-enhanced CoPilot analytics, our KPIs adapt to emerging trends, ensuring metrics remain relevant, impactful, and aligned with delivering real customer value.

Achieving Success with a Balanced, Results-Driven Approach to KPIs

ACT takes a balanced scorecard approach, evaluating KPIs across operational efficiency, customer experience, and employee performance to avoid over-optimizing a single metric. For example, our agent scorecards measure quality of service, speed, and customer satisfaction, ensuring meaningful, high-impact interactions that drive positive outcomes for partners and their customers.

This commitment to meaningful KPIs, backed by data-driven insights and accountability through employee ownership, has resulted in a 98% green scorecard performance. More than a number, this reflects the strength of our strategy, operational efficiency, and dedication to partner success, all while avoiding the pitfalls of Goodhart’s Law.

Staying Ahead of Evolving Customer Expectations 

Customer expectations have evolved rapidly, particularly with the acceleration of digital transformation since 2020. According to McKinsey, 71% of customers demand personalized interactions, while 76% become frustrated when their needs aren’t met.

ACT’s AI-enhanced solutions and personalization services address these challenges by focusing KPIs on both operational efficiency and customer satisfaction. By measuring and meeting personalized service expectations, we stay ahead of industry demands, maintain a competitive edge, and deliver exceptional results for our partners.

About ACT 

ACT is a U.S.-based business process outsourcing provider and global leader in customer care. Our approach is founded on a winning formula – that the best solutions integrate Employee Experience (EX) + Customer Experience (CX) + User Experience (UX) + Digital Experience (DX) + Multi-experience (MX) for an outstanding Total Experience (TX) overall. As a 100% employee-owned company, we have placed Employee Experience at the center of our business strategy because we know that engaged employees ensure the best customer outcomes. As shareholders in the business, our Employee Owners have a personal interest in delivering value to our partners, and their motivations are uniquely aligned to our partners’ success. 

We have more than 27 years’ experience helping our partners drive growth and brand loyalty by providing amazing experiences across every touchpoint and channel of the customer journey. We serve many of the world’s top companies spanning a wide range of verticals, including numerous Fortune 50 partners. We offer a broad range of leading-edge technologies and custom solutions tailored to your business needs to make every unique customer connection count. 

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