You started the discovery process to identify the top 10 Key Performance Indicators using tips from my last column, “Not All KPIs are Treated Equally”. Remember the 10 KPIs selected shouldidentify the now so you can take corrective action. Now the question is how best to implement and empower the organizationto adopt these metrics? This column will provide some guidance to assist with your implementation.
Before we begin this journey, let’s review how many KPIs we should be implemented. When asked how many KPIs their organization use, readers responded with a wide range of answers as demonstrated in the chart. Most responders have less than 25 KPIs but several have zero. If a company has more than 10, then it likely they have included KPIs that are really Report Indicators such as cash flow. The last column described an organization should have 10 KPIs, approximately 80 Performance Indicators and 10 Key Report Indicators (KRIs).
The next step is how best to implement so let’s begin.
I interviewed professional speaker, trainer, and author Gary Hernbroth (Training for Winners) for this article. Gary has extensive experience as an agent for change in the hospitality industry and a variety of other industries such as the credit field, trade associations, and sales organizations. He has written numerous blog articles on the topic.
Hernbroth first used the “Bracketology” strategy at a client workshop involving 120 managers and department heads. As Gary explained:
“It helped the audience make decisions as to what was really important for that group while providing a platform for everyone to contribute their ideas to the discussion. I used it as a mechanism to start dialogues about what was most important to them in getting to their ultimate goal, which was improving their customer service company-wide. It helped managers see that you can’t just wave a wand and make it happen, that it takes steps that lead to further steps, as in brackets.”
The term “Bracketology “ was made famous by ESPN when slotting the top college basketball teams and allowing viewers to pick the final 4 out of a field of 64 teams. It is a very simple yet effective process for dealing with multiple data points and how best to weigh their overall significance.
In this example, the user would identify their Top 20 KPIs in Step1. In Step 2, they would narrow that to 10, and then finally to the top 5 KPIs in Step 3.
Let’s now jump ahead and assume you have your KPIs figured out and you are ready to implement. What do you do?
Tiger by the Tail
Gary Hernbroth developed the following approach for his Training for Winners workshop.
“It is strongly recommended that you involve your teams and/or team leaders in the very same exercise, depending on the size of your business unit, number of locations, etc. it is very important that you, as the business owner/operator, do not ‘muddy the waters’ by exposing your brackets to the group. Let them meet, discuss, and come up with their own. When completed, you can collect them and compare their work to your brackets. Indeed, you now have the proverbial ‘tiger by the tail.’ What do you do with this information?”
Gary further added:
“How do they line up with your company’s vision, your core values, your mission and reason for being? Do they align? Are they in touch with each other, or do the teams on the front line feel totally different than upper management does? If there are significant differences, you have come upon a seminal moment for your organization. You may have uncovered a Pandora’s Box that gives pause to going further just quite yet. It’s OK, it’s even healthy. This is a terrific off-shoot of the bracket exercise, and may flip your thinking on your KPI’s altogether. It may give you a new direction in certain aspects of your organization. It may bring about some needed change in an area or areas that you hadn’t thought about.”
“Done in the right way, this is a seminal moment for open communication for your team members and you/upper management. Any KPI program is better suited to be supported from the bottom up than something pushed on the team from top down. And you’ll likely identify some new/different KPIs, too.”
In our next column, we will dive deeper into the Tiger by the Tail discussion as a company that determines their KPIs are inconsistent with their Vision and Values presents an excellent opportunity for real change.
I’ll post the answers in my next article.
Since the holidays are approaching, here are some examples of #holidayKPIs that you may want to be aware of. These KPIs would all fall in the Learning & Growth bucket of the Balanced Scorecard.
· Volunteer hours in the community – Positive community involvement generates positive work environment for employees
· Number of employees who have received recognition –Measure the times employees are recognized. These are the attributes that fill the emotional fuel tank of staff.
· Number of students recruited for holiday work – Positive public relations.
· Downtime – One CEO wants to measure how much time they can spend away from the business. More time away means greater confidence in the management team to operate the company. We sometimes forget the ultimate goal of any business owner is to have more personal time.
Free KPI resources available include the following:
- Bernard Marr’s The 75 KPIs Every Manager Needs To Know
- Free KPI Assessment Form
- KPI Library
- webKPI List of Top 100 KPIs