KPI Workshop

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This workshop will help you choose the key numbers that will help you identify problems early, and solve them fast.

If you get these numbers right, they will drive better financial results AND help you achieve your business goals.

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KPI Workshop

  1. 1. KPI workshop @StephenLynch @RESULTSdotcom
  2. 2. Key Performance Indicators
  3. 3. “However beautiful the strategy, you should occasionally look at the results”
  4. 4. 92% of companies don’t measure KPIs [3]
  5. 5. Key Performance Indicators / Key Metrics  RED = Unacceptable performance standard  YELLOW = Watch closely. Need help?  GREEN = Target performance standard
  6. 6. In the past, we used Spreadsheets / MS Excel
  7. 7. Now we use software
  8. 8. Key Performance Indicators / Key Metrics
  9. 9. Everyone knows their own individual accountabilities
  10. 10. They can also see how the entire team is performing
  11. 11. Team leaders can drill down to identify the cause
  12. 12. Looks like one person is holding the team back
  13. 13. What are the reasons for this trend?
  14. 14. Craig
  15. 15. Confront poor performance
  16. 16. “What are the reasons for this trend Craig?”
  17. 17. Assign a Task to address the issue
  18. 18. The Progress Principle
  19. 19. Celebrate “Small Wins” every step of the way
  20. 20. Praise Frequently
  21. 21. Industry / Business Model KPIs Teams / Functional Area KPIs Individual KPIs (What’s your daily / weekly number?)
  22. 22. Business Model / Industry KPIs (example) Industry Type = (e.g. Restaurant) Performance Thresholds Person Accountable Measurement Frequency RED # 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% KPI Description YELLOW GREEN
  23. 23. Single point accountability
  24. 24. Many can be involved, but only 1 person can be named accountable for each KPI
  25. 25. Industry / Business Model KPIs Teams / Functional Area KPIs Individual KPIs (What’s your daily / weekly number?)
  26. 26. Activity Effectiveness Outcome # Sales Presentations (activity) % of Prospects that purchase (effectiveness) $ Sales revenue (outcome)
  27. 27. Team / Functional Area KPIs (example) Team / Functional Area name = (e.g. Fitness Center Sales Team ) Performance Thresholds Person Accountable Measurement Frequency RED # 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 Description YELLOW GREEN
  28. 28. KPI Hierarchies (roll ups) (example) Team / Functional Area name = (e.g. Fitness Center Sales Team ) Performance Thresholds Person Accountable Measurement Frequency RED Tyler Weekly 55 75 Person Accountable Measurement Frequency Jeff Weekly 15 20 # Sales presentations - Marie Marie Weekly 15 20 # Sales presentations - Sergey Sergey Weekly 15 20 Arzu Weekly 10 15 “Parent” Goal KPI Description # Sales presentations – total team “Child” Goals # Sales presentations - Jeff # Sales presentations - Arzu YELLOW GREEN
  29. 29. Industry / Business Model KPIs Teams / Functional Area KPIs Individual KPIs (What’s your daily / weekly number?)
  30. 30. 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?
  31. 31. Leadership Team: Industry / Business Model KPIs Industry Type = KPI Description Performance Thresholds Person Accountable Measurement Frequency RED YELLOW GREEN
  32. 32. Industry / Business Model KPIs Teams / Functional Area KPIs Individual KPIs (What’s your daily / weekly number?)
  33. 33. Team / Functional Area KPIs Team / Functional Area name = KPI Description Performance Thresholds Person Accountable Measurement Frequency RED YELLOW GREEN
  34. 34. KPI Hierarchies Team / Functional Area = Performance Thresholds “Parent” Goal KPI Description Person Accountable Measurement Frequency “Child” Goals Person Accountable Measurement Frequency RED YELLOW GREEN
  35. 35. Industry / Business Model KPIs Teams / Functional Area KPIs Individual KPIs (What’s your daily / weekly number?)
  36. 36. Individual KPIs What is each person’s daily / weekly number? KPI Description Person Accountable Performance Thresholds Measurement Frequency RED YELLOW GREEN
  37. 37. “SMART” Goals S Specific M Measurable A Achievable R Relevant T Time bound
  38. 38. 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 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
  39. 39. #1 Regret of Business Leaders They wish they had dealt with poor performance sooner!
  40. 40. “He that is good for making excuses is seldom good for anything else.” “Leaders owe it to the organization & their fellow workers, not to tolerate non-performing people in important jobs” Peter Drucker Benjamin Franklin
  41. 41. “Accountability is meaningless without consequences” 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?
  42. 42. KPIs – getting it right 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 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
  43. 43. Get the slide deck: www.RESULTS.com/slides Connect with Stephen Lynch:

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