Several conversations have prompted me to ask 3 questions to current business leaders –
- “have you gone too far in attention you give to KPI’s?”
- “does your intention in KPI focus match the impact within your business?”
- “is it time to review how and what you report?”
Let me overview the conversations:
Most people with kids recognise the increasing focus on targets within schools
Leaders Intention: to improve the performance of the school and the results
Impact: stress on children, teachers and parents – parents removing children from school on SATS days
The focus on minimizing root cause of near misses will provide data that can be used to help prevent injuries and fatalities (ref Heinrich triangle)
Leaders Intention: zero tolerance to reducing near misses, LTA’s and fatalities
Impact: KPI’s giving an impression of success rather than because the right culture is in place eg is zero time lost due to strong leadership and culture, or due to good fortune?
Focus on sales KPI activity reporting to improve overall sales performance
Leaders Intention: to measure the right activities that lead to successful close rates and provide forecasting
Impact: success becomes hitting a KPI number rather than a £’s number; excess time reporting KPI’s; disconnect between driving performance output vs input eg if we raise our call rates by 10% then we get 10% more sales
We need to measure all aspects of business performance and we need to challenge ourselves to review our KPI measures, how we use them and ask – are they fit for purpose or do we need to change?
Your existing KPI reporting?
- Measure the right behaviours, activities and output that leads to the results that you want now and in the future; not what you needed in the past but no longer need
- Limit the number of measures for clarity; is it really possible for one person to have more than a dozen or so “Key” Performance Indicators?
- How do you capture KPI’s and how long does it take? A team of 8 employees doing 1 hour reporting each day = 8 hours. Could you reduce your reporting by half and gain an extra half day of productivity?
How you use it?
- Have performance conversations with your teams around the right KPI’s and match the numbers with the reality of the individual and team performance. Focus your team on the right results and don’t let them hide behind KPI stats
- Use the information to find blockers in performance that can be unlocked eg a high sales proposal rate but low closure rate – support that individual on that challenge (we love “real deal” coaching where we develop people through live sales opportunities rather than theoretical case studies)
- Don’t kid yourself as a leader that monitoring a KPI spreadsheet gives you a real understanding of what your business is doing. Get to the coalface; whether it be the classroom, the customer’s location or the construction site. See what is really happening out there
The right KPI’s being used in the right way; matching the leadership intention with the impact on the business (employees, customers and processes); are a powerful and essential performance tool. Keep it real though; performance in business and life is a complex thing that cannot be truly measured in one dimension. Take this opportunity to step back and review what you do and challenge yourself to make an improvement.
At Chilli Pepper, we provide Leadership and Sales development training and believe that often, it is the small things that have the big impact. Drop a comment with your thoughts or get in contact if you would like to talk about your business challenges.