white paper

RETHINKING KPIs

Written by Stephen LynchContains excerpts from: Business Execution for RESULTS

A definitive guide for engaging your team and driving business results with Key Performance Indicators

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About this white paper

In this white paper, you will learn how to get your people

focused on the numbers that are truly important to drive your

business forward. We call them your Numerical Targets and Key

Performance Indicators (KPIs).

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NUMERICAL TARGETS

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Numerical targets and milestones

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Make your numbers meaningful

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Tips for setting numerical targets

TIP: You will track these numbers publicly, so select measures that you don't mind sharing.

Single Point Accountability.Many people can be involved,

but only ONE person can be

held accountable

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Keep the numbers relevant

Display the numbers over different time periods.

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Make the numbers relevant!Nothing is more demoralizing than

displaying annual targets that bear no

resemblance to the current reality.

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How to choose your numerical targets

Now it's time to get to work. Get your team together and do the following:

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4.

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KPIs(key performance indicators)

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KPIs: a quick level set

"If we get these things right, we'll have good results on our financial statements and increase the value of our company."

Start smallA small handful of leading

indicators that predict and

drive the success of your

current business model

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Don’t just focus on the end result. First understand which activities drive those results.

TIP: remember to pick KPIs that drive financial results in your current business model. Start by listing the outcome you are looking for - the end result. Now ask yourself the following two questions:

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2.

Driving KPI effectiveness

activity effectiveness RESULTS

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With KPIs, you get what you inspect

What you pay attention to drives behavior

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Daily and weekly KPIs

problem identification

analysis

TIP: Daily and weekly measures let you spot trends earlier

correction

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Fix problems when they are small

>>

Address problems earlyThe longer a problem lives, the

bigger and nastier it gets!

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Selecting the right KPIs(key performance indicators)

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Use the tropical island test to select the right KPIs

Imagine that you're vacationing on a distant tropical island. It's lovely there, but it's very remote.

Communications are severely limited. In fact, you can only receive a single five-line text message per week to let you know how things are going at the company.

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Use the tropical island test to select the right KPIs

Which 5 numbers sum up the state of your business?

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What keeps the lights on?

Start with the minimum acceptable level

RED= the minimum

performance level

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What about good performance?

Now set the threshold for solid / good performance

GREEN= desired / solid

performance

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Now choose your company’s KPIs

Now it’s time to get to work. Get your team together and do the following:

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2.

3.

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SCHEDULE YOUR FREE DEMO

a complete KPI solution for SMBs● identify what’s happening in your company right now

● visibility into what different people and teams are working on

● identify which areas are excelling and which require attention

● recognize top performers and assist people who need help