roi1One of the questions I frequently get goes something like this:

We’re setting up a Business Relationship Management (BRM) Capability. How should we measure our impact?

A common corollary to this question (often suggested by the questioner as a potential answer) is:

What’s the best way for a Business Relationship Manager to measure their customer’s satisfaction?

The Ultimate Measure of Success – Business Value Realized

I typically start the conversation by asking my questioner:

What were the primary reasons you decided to establish a BRM capability? In particular, what would your Business Partners (customers) most want to see out of the relationship?

The response to this relatively straightforward question is usually telling—first in the noticeable pause before they are able to respond, then in the fuzziness of their response. I guess the old cliché, “If you don’t know where you are going, any road will do!” applies here. If you don’t know why the BRM capability was established, it’s no wonder why you are having a hard time figuring out metrics!

I firmly believe that Business Relationship Management exists to serve two important purposes:

  1. To stimulate, surface and shape business demand for a Provider’s products and services and ensure that the potential business value from those products and services is captured, optimized and recognized.
  2. To shape the Provider’s products and services and ensure that they are optimized to meet the business value demand.

First, before you even get too far into measurement, you need to get really clear with your stakeholders—both Business Partner and Provider stakeholders—as to the goals and expectations for your BRM capability. This will help you ensure role clarity in the context of intended purposes and determine appropriate metrics for measuring the impact of the role.

The Tenets of Business Value Measurement

There are all sorts of challenges (many well-documented) with measuring business value, but over my many years of management consulting, I’ve discovered some basic tenets of business value measurement:

  1. There are important intermediary steps between ‘inputs’ (the cost of which is an important element of net value realized) and ‘impacts’ (the business value actually experienced by key stakeholders).
  2. Trying to figure out how business value will be manifested and how this manifestation will be tracked and measured is always illuminating and clarifying, even if you don’t end up with a perfect metric.
  3. Shifting the focus of BRM measurement to business value sends a very important message to the organization about what’s really important and why BRM capability has been established.

Let’s look at these tenets a little more closely.

1. From Inputs to Impacts

You can’t simply say things like, “This project will create $x business value.” The reality is more likely something like, “This project (and its inputs), the results of which will depend upon Q infrastructure capabilities (more inputs) and R and S projects (yet more inputs), will enable T change in business capability (outputs) which will increase sales effectiveness by U% within V months (outcomes) which will be worth W (impact) to the organization. Sorting through the value chain from inputs to impacts begins to get a handle on how business value is to be created and how it could be measured. As importantly, it will suggest intermediary results that can be measured, and may, in fact, be important leading indicators for the final impacts.

2. Dialog About Value Measures Is Clarifying

Sorting through the value chain from inputs to impacts, especially when that process involves key stakeholders, leads to a couple of important qualities:

  1. Stakeholders get much clearer on the value chain and what it will actually take to realize the business value being targeted.
  2. In gaining clarity, stakeholders gain buy-in and commitment to the initiatives associated with moving from Inputs to Impacts.

3. Position Business Relationship Management as a Value Driver

Tell your Business Partner that you are there to improve service quality and she will probably be mildly pleased. Tell her you are there to help drive business value from Provider services and solutions, and she will be downright excited!

But actions trump words every time! Engage your Business Partner is the kinds of value-clarifying dialog outlined above, and you don’t have to tell them why Business Relationship Management has been established—they will have experienced the reason and be telling others about the power of BRM! Positioning Business Relationship Management properly is crucial to getting on a meaningful path to success. All to often, I’ve seen BRM positioned too low in the food chain, where Business Partners, especially those in executive positions, really don’t care and won’t invest their time to engage.

The Corollary Question

And what about the customer satisfaction question: “What’s the best way for a Business Relationship Manager to measure their customer’s satisfaction?”

I’ll get to that in a subsequent post!  (Yes, dear reader, I want you to visit this blog again!)

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