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SLA-driven continuous improvement – Cornerstone of successful cross-functional teams

What is a Service-Level Agreement or SLA? If you’re in a customer facing role, chances are you’ve helped create one for your clients. If you’re not in a customer facing role, you’ve probably been part of it in some way. Here’s how Gartner defines SLA’s –

“A service-level agreement (SLA) sets the expectations between the service provider and the customer and describes the products or services to be delivered, the single point of contact for end-user problems, and the metrics by which the effectiveness of the process is monitored and approved.”

This definition here is limited to SLAs between customers and service providers. Gartner further breaks down SLAs into three types - service-based, customer-based, and multilevel. In addition, companies such as IBM, Zendesk and HubSpot also acknowledge the importance of internal SLAs, ones that exist between different departments and business units internally. SLA’s are created to provide a baseline for how cross-functional teams measure their deliverables to each other, and it's imperative to note that the accountability is bidirectional, i.e. both (or multiple) teams have a role to play in terms of inputs and outputs.

A Linkedin Global Survey found that in just the United States, sales and marketing teams waste an estimated $1 trillion dollars per year due to a lack of coordination.

Operating policies should be written in such a way that they enable more interaction and shared responsibility between teams rather than attempting to partition responsibility. This is an important caveat to consider when designing SLA’s - performance metrics and reward & recognition for one team should not have unintended consequences for the other team that inhibits both of them from achieving a common goal. For instance, if Marketing were to be solely targeted for generating as many MQLs as they can without any consideration for how many MQLs the sales team can convert into SQLs we’d have stale dated leads that are as good as dead.

In terms of continuous improvement, internal SLAs between cross functional teams can serve as a testbed or sandbox for what eventually becomes a higher standard of customer service, one that can be guaranteed to a customer with an external SLA.

Consider Dominos, for instance.

It’s one thing to consistently deliver a customer experience, it’s another to guarantee this customer service standard, against your bottom line. This extremely challenging feat is worth the pain for companies trying to carve a market out of it, as Dominos has with “speed to delivery” for six decades.

For our purposes, if you consider the ‘Baker’ and ‘Delivery Personnel’ as the only two ‘teams’ involved in the process, Dominos has strived to enhance internal SLAs (between baker and delivery personnel) by amping them with constantly improving ovens to reduce baking time, and technologies to reduce delivery times. While the shared goal has always been the external SLA to the client - pizza delivered in under 30 minutes (10 in future, perhaps!)