KPI Workshop - July 2014

KPI Workshop

PRESENTER: Stephen Lynch @StephenLynch

#RealKPIs || @RESULTSdotcom

#RealKPIs

JOIN THE CONVERSATION ONLINE

PRESENTATION 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 NOW

VISIBILITY INTO WHAT DIFFERENT PEOPLE AND TEAMS ARE WORKING ON

IDENTIFY WHICH AREAS ARE WORKING WELL AND WHICH REQUIRE ATTENTION

UNDERSTAND WHO’S EXCELLING AND WHO NEEDS HELP

Now we use Software


Everyone knows their own individual accountabilities


Key Performance Indicators / Key Metrics


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 struggling?


What is happening here? How can we help?







Assign a Task to address the issue



The Right Way To Set Goals




Always aim for the STARS, if you miss…

..you’ll at least reach the moon











Tropical Island Test


- 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 is performing

- If the KPI’s are “green” you can go back to reading your book

- 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?

Imagine this…


Business Model / Industry KPIs (example)

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

KPI DescriptionPerson

Accountable

MeasurementFrequency 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%


Business Model / Industry KPIs (example)

Industry Type = Performance Thresholds

KPI Description Person Accountable



The 4 Gears


Create leads

Convert leads into sales

Provide product / service that delights customers

Grow cash & make a profit

KPIs - The 4 Gears


Outcome

Activity Effectiveness

Outcomes are good, but what drives them?


Outcome


$ Sales

# phone calls# appointments booked # sales presentations

% who attend presentation% who buy at presentation


Scope out your KPIs (example)

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


Accountable


# 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 DescriptionPerson

Accountable


# 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



Single Point Accountability

Data you can track and measure right now?

Contributes to the big picture?

Drives the right behaviors?


The sniff test:



Create leads




KPIs - The 4 Gears

Team / Functional Area KPIs

Team / Functional Area name = Performance Thresholds


Accountable



KPI Hierarchies

Team / Functional Area = Performance Thresholds


Accountable



Accountable




Create leads




KPIs - The 4 Gears


Outcome


Create leads


Team / Functional Area name = MARKETING Performance Thresholds


Accountable




Create leads




KPIs - The 4 Gears


Outcome




Team / Functional Area name = SALES Performance Thresholds


Accountable



Scope out your KPIs (example)



Accountable


# 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)



Accountable


# Sales presentations – total team Tyler Weekly 55 75


Accountable


# 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



Create leads




KPIs - The 4 Gears


Outcome


Provide product / service > delight customers


Team / Functional Area name = OPERATIONS Performance Thresholds


Accountable




Create leads




KPIs - The 4 Gears


Outcome


Grow cash & make profit


Team / Functional Area name = FINANCE Performance Thresholds


Accountable



Individual KPIs




SpecificMeasurableAchievableRelevantTime bound

S

AM

RT

“SMART” Goals


Ideally everyone has a KPI

Contributes to big picture

“I had a good week”


What’s your number?

Individual KPIs

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


Accountable



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?


Be conservative in the beginning

Get everyone used to winning

You can always raise the bar later


Review your performance thresholds

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 “green” performance thresholds – adjusted regularly- KPI data kept current and visible every week- Person held firmly accountable for performance- Progress praised and recognized

RESULTS focused management dashboard

A COMPLETE SOLUTION FOR SMB

IDENTIFY WHAT’S HAPPENING IN YOUR BUSINESS RIGHT NOW

VISIBILITY INTO WHAT DIFFERENT PEOPLE AND TEAMS ARE WORKING ON

IDENTIFY WHICH AREAS ARE WORKING WELL AND WHICH REQUIRE ATTENTION

UNDERSTAND WHO’S EXCELLING AND WHO NEEDS HELP

#RealKPIs

JOIN THE CONVERSATION ONLINE

PRESENTATION AVAILABLE POST PRESENTATION:

www.RESULTS.com/slides

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