Uses Of Metrics

Dear Import/Export Compliance Manager,

My managers keep asking me for proof that our department is doing a good job.  As much as I would love to trot out line graphs of money saved in duties and export licenses processed, I feel that would be a woefully incomplete representation of what we really do.  What defines import/export compliance success and is it able to be condensed in preferably three PowerPoint slides or fewer?

Pie-Charted in Poughkeepsie

Dear Pie-Charted,

The Import/Export Compliance Manager is tempted to answer this question regarding how good your work is with the famous words uttered by U.S. Supreme Court Justice Potter Stewart about obscenity: “I know it when I see it.”  It is doubtful your boss would let you get away with that one, especially when you ask for $200K for that new automated export license screening system.  We can do better.

So let’s brainstorm.  Were you ever to speak to an ISO auditor about import/export compliance, they would likely seek measurable variables to indicate whether you have been a success or a failure.  Is a lack of violations an indicator of success?  Not necessarily; maybe it just means your company hasn’t been caught yet.  Is a large amount of duty savings an indicator of success?  Perhaps, but at some point you maximize your duty savings and are unable to get new savings without sacrificing compliance.  Is success defined as minimal delays in your shipments clearing customs?  Perhaps though, as every import/export compliance professional knows, you can do everything right and still have your shipments held up. 

We are in agreement that success in import/export compliance cannot be easily measured.  Just because it cannot, though, does not mean that you don’t know when you have been successful in your efforts to keep the company compliant.  Success in import/export compliance can be seen by the dutiful shipping clerk in the plant refusing to allow a Friday afternoon shipment to go out the door because the required import/export compliance form has not been filled out completely.  Success in import/export compliance can be seen by having upper management not only provide support in writing but back it up with action, particularly providing specific resources such as adequate personnel and systems to ensure compliance.  Success in import/export compliance can be seen by having excellent relations with the government employees responsible for clearing your imported shipments or approving your export licenses.  These, while being evidence of a successful compliance program, do not necessarily communicate well when included in five-minute PowerPoint presentations to upper management.

This is not to say that import/export compliance should not look for certain measurements and toot its own horn (i.e. advocate for itself) to gain publicity and show value-add to the company.  Every bit of evidence, translated into a language that non-import/export compliance personnel can easily understand, serves to bolster the importance of import/export compliance and further teach employees to have import/export compliance on the brain, regardless of their job function.  Not only that but they serve to reinforce that the Import/Export Compliance Department is a valued part of the entire company, helping it become more successful and is not just a nit-picky department off to the side trying to slow down people doing ‘real work’. 

Regardless of how many successes you can trumpet, keep in mind that you should studiously avoid the trap of being judged solely by measurements, regardless of how tempting (and financially rewarding) it may be.  As soon as import/export compliance becomes reduced to a series of line graphs, percentages and dollar signs, it becomes too much of a science and not enough of an art.  You can be held responsible for circumstances entirely out of your control.  Your resources could be tied to something unrelated to compliance risk such as quarterly revenue.  It is best to stay away from metrics if at all possible or at least severely limit their use. 

There is one exception, however: workload.  Metrics showing consistent-and-repeatable processes, such as processing forms, reviewing potential restricted parties, classifying and even providing situation-specific guidance are good to track to show change over time.  If the volume you’re measuring has increased by 50% in a year, that is important to know for managing your existing team and for determining when a new team member is needed (and what type of person you should be looking for).

The Import/Export Compliance Manager advocates having a discussion with your boss and find out what their worries really are.  If they’re worried about shipments being stuck in Customs, emphasize your success in eliminating or reducing shipping delays.  If they’re worried about cost, bring out the duty spend numbers in relation to something like total value of imports and speak about your initiatives to keep things under control.  If they’re worried about export violations, discuss the number of export licenses you have and bring out whatever evidence needed to reassure them that all is in good hands (unless, of course, it’s not and you have serious problems...in that case, be sure to have solutions ready to be suggested).  Hopefully, you and your boss should be able to work together to put together a good picture of how the Import/Export Compliance Department with graphs and numbers as a component, not the whole.  Good luck!