KPI Workshop

transcript

KPI workshop

@StephenLynch @RESULTSdotcom

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

Now we use software

Key Performance Indicators / Key Metrics

Everyone knows their own individual accountabilities

They can also see how the entire team is performing

Team leaders can drill down to identify the cause

Looks like one person is holding the team back

What are the reasons for this trend?

Confront poor performance

“What are the reasons for this trend Craig?”

Assign a Task to address the issue

The Progress Principle

Celebrate “Small Wins” every step of the way

Praise Frequently

Industry / Business Model KPIs

Teams / Functional Area KPIs

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

Industry Type = (e.g. Restaurant)

Performance Thresholds

KPI Description Person

Accountable

Measurement 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%

Business Model / Industry KPIs (example)

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 revenue (outcome)

# Sales Presentations (activity)

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

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

Team / Functional Area KPIs (example)

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

“Parent” Goal KPI Description Person

Accountable

# Sales presentations – total team Tyler Weekly 55 75

“Child” Goals Person

Accountable

Measurement Frequency

# 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)

- 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?

Imagine this…

Industry Type =

KPI Description

Person Accountable

Leadership Team: Industry / Business Model KPIs

Team / Functional Area name =

Accountable

Team / Functional Area KPIs

Team / Functional Area =

“Parent” Goal KPI Description Person

Accountable

“Child” Goals Person

Accountable

Measurement Frequency

KPI Hierarchies

What is each person’s daily / weekly number?

Accountable

Individual KPIs

Specific

Measurable

Achievable

Relevant

Time bound

“SMART” Goals

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 threshold and is willing to be held firmly accountable

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

Review KPI performance thresholds every quarter

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

What positive consequences can the person accountable expect if 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?

“Accountability is meaningless without consequences”

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

Get the slide deck:

www.RESULTS.com/slides

Connect with Stephen Lynch: