KPI workshop May 2014

KPI Workshop

PRESENTER: Stephen Lynch @StephenLynch #RealKPIs || @RESULTSdotcom

#RealKPIsJOIN THE CONVERSATION ONLINE

PRESENTION AVAILABLE POST PRESENTATION:

www.RESULTS.com/slides

Questions / Answers:#realKPIs || @RESULTSdotcom

Full participation


Ask for everyone’s point of view


Productive conflict is important


No “group think”


Make a clear decision


Everyone commits to the decision


Key Performance Indicators


However beautiful the strategy, you should occasionally look at the results

“


92% of companies don’t measure KPIs [3]





RED = Unacceptable performance standard

YELLOW = Watch closely. Need help?

GREEN = Target performance standard

Key Performance Indicators / Key Metrics


In the past, we used Spreadsheets / MS Excel


IDENTIFY WHAT’S HAPPENING IN YOUR BUSINESS RIGHT NOWVISIBILITY INTO WHAT DIFFERENT PEOPLE AND TEAMS ARE WORKING ON

IDENTIFY WHICH AREAS ARE WORKING WELL AND WHICH REQUIRE ATTENTIONUNDERSTAND WHO’S EXCELLING AND WHO NEEDS HELP

Now we use Software


Key Performance Indicators / Key Metrics


Everyone knows their own individual accountabilities


They can also see how other teams are performing


They can also see how other teams are performing


Team leaders can drill down to identify the cause


Looks like one person is holding the team back






What is happening here Craig?



Assign a Task to address the issue





Always aim for the STARS,

if you miss…

..you’ll at least reach the moon










Industry / Business Model KPIs

Teams / Functional Area KPIs

Individual KPIs(What’s your daily / weekly number?)


Business Model / Industry KPIs (example)

Industry Type = (e.g. Restaurant) Performance Thresholds

KPI DescriptionPerson

AccountableMeasurement

Frequency RED YELLOW GREEN

# Customers Chloe Weekly 2700 3000

$ Average spend per customer Rajesh Weekly $35 $40

# Complaints Rajesh Weekly 10 5

$ Revenue per available seat hour (RevPASH) Mark Weekly $12 $15

Labor cost as % of revenue Mark Weekly 35% 30%


Single point accountability


Many can be involved, but only 1 person can be named accountable

for each KPI






Activity Effectiveness Outcome

# Sales Presentations (activity)

% of Prospects that purchase (effectiveness)

# Sales -> Sales revenue (outcome)



Team / Functional Area KPIs (example)

Team / Functional Area name = (e.g. Fitness Center Sales Team ) Performance Thresholds




# New appointments booked Hans Daily average 20 25

% Appointments that did not show up Hans Weekly 25% 20%

# Sales Presentations delivered Tyler Weekly 55 75

% Prospects that purchased on the day Tyler Weekly 50% 60%

$ Weekly Sales Revenue Jenny Weekly $45,000 $55,000


KPI Hierarchies (roll ups) (example)


“Parent” Goal KPI Description Person Accountable

MeasurementFrequency RED YELLOW GREEN

# Sales presentations – total team Tyler Weekly 55 75

“Child” Goals Person Accountable

MeasurementFrequency

# Sales presentations - Jeff Jeff Weekly 15 20

# Sales presentations - Marie Marie Weekly 15 20

# Sales presentations - Sergey Sergey Weekly 15 20

# Sales presentations - Arzu Arzu Weekly 10 15







Imagine this…

You are on an extended holiday in the tropics.

All you can receive is a weekly text from your business that contains a small handful of numbers (e.g. 5 max) that tell you how well your business (or team) is performing

If the KPI’s are “green” you can go back to sunbathing If the KPI’s are “yellow” you need to ring the office to see what is going on If the KPI’s are “red” you need to cut your holiday short and return home

What would those numbers be?


Leadership Team: Industry / Business Model KPIs

Industry Type = Performance Thresholds

KPI Description Person Accountable



Business Model / Industry KPIs (example)

Industry Type = (e.g. Restaurant) Performance Thresholds




# Customers Chloe Weekly 2700 3000

$ Average spend per customer Rajesh Weekly $35 $40

# Complaints Rajesh Weekly 10 5

$ Revenue per available seat hour (RevPASH) Mark Weekly $12 $15

Labor cost as % of revenue Mark Weekly 35% 30%






Team / Functional Area KPIs

Team / Functional Area name = Performance Thresholds




KPI Hierarchies

Team / Functional Area = Performance Thresholds






Team / Functional Area KPIs (example)





# New appointments booked Hans Daily average 20 25

% Appointments that did not show up Hans Weekly 25% 20%

# Sales Presentations delivered Tyler Weekly 55 75

% Prospects that purchased on the day Tyler Weekly 50% 60%

$ Weekly Sales Revenue Jenny Weekly $45,000 $55,000





# Sales presentations – total team Tyler Weekly 55 75



# Sales presentations - Jeff Jeff Weekly 15 20

# Sales presentations - Marie Marie Weekly 15 20

# Sales presentations - Sergey Sergey Weekly 15 20

# Sales presentations - Arzu Arzu Weekly 10 15

KPI Hierarchies (roll ups) (example)









SpecificMeasurableAchievableRelevantTime bound

S

AM

RT

“SMART” Goals


Individual KPIs

What is each person’s daily / weekly number? Performance Thresholds




Review KPI performance thresholds every quarter

Review red, yellow, green thresholds to make sure they are SMART – especially “achievable” and “relevant”

based on your strategic reality / seasonal factors / other trends

Confirm each person “buys in” to the performance thresholdand is willing to be held firmly accountable

for their KPI being “in the green” as part of an ongoing monthly review of their performance


By what day each week / month will the KPI data be posted?What 1 person will be accountable to post this data?

List your answers below:



They wish they had dealt with poor performance sooner!

#1 Regret of Business Leaders


“He that is good for making excuses is seldom good for

anything else.”

Benjamin Franklin

Leaders owe it to the organization& their fellow workers, not to tolerate non-performing people in important jobs

– Peter Drucker

“


“Accountability is meaningless without consequences”

What positive consequences can the person accountable expectif their KPI is consistently in the “GREEN” at the end of the month?

What negative consequences can the person accountable expect if their KPI is consistently in the “RED”…

• For 1 month?• For 2 months in a row?• For 3 months in a row?• For 4 months in a row?


KPIs – getting it right

Growth inhibited by:- Wrong person in the role- Wrong KPIs - Too many KPIs- Unrealistic performance thresholds- Not keeping KPI data current and visible every week - Not holding person firmly accountable for performance- No consequences for poor performance- Waiting too long to address poor performance

Growth maximized by:- Right person in the role- Right KPIs - Realistic performance thresholds – adjusted regularly- KPI data kept current and visible every week- Person held firmly accountable for performance- Progress praised and recognized




Strategy Centre 1-Page Plan

Strategy Centre Thought Leadership Library

RESULTS focused management dashboard

A COMPLETE SOLUTION FOR SMB

IDENTIFY WHAT’S HAPPENING IN YOUR BUSINESS RIGHT NOWVISIBILITY INTO WHAT DIFFERENT PEOPLE AND TEAMS ARE WORKING ON

IDENTIFY WHICH AREAS ARE WORKING WELL AND WHICH REQUIRE ATTENTIONUNDERSTAND WHO’S EXCELLING AND WHO NEEDS HELP

FOR CEOs and business leaders of fast growth SMBs

WHO are trying to take control of their business, engage their workforce, and achieve extraordinary RESULTS

OUR PRODUCT

IS ARESULTS focused management dashboard

THAT PROVIDES

transparency into your entire organization from company-wide strategic goals to individual tasks

UNLIKE other software providers, we offer SMBs the complete suite of tools to manage their business and engage their team

OUR PRODUCT engages your workforce to accelerate your success

OUR PURPOSE to end employee disengagement by reprograming management




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