Author Alex Noble wrote in Sunshine through Shadows, “Success is not a place at which one arrives, but rather the spirit with which one undertakes and continues the journey.” Most people enjoy a sequel, so to borrow from Hollywood, I’ll will continue the journey with guns blazing on how to implement Key Performance Indicators (#KPIs) by discussing why business coaches should implement KPIs.
In my last article, “Implementing KPIs – Tiger by the Tail,” I provided an example for using the strategic mapping approach we titled “Bracketology” to help identify the ten true KPIs in an organization. Professional speaker, trainer, and author Gary Hernbroth of Training for Winners first used the Bracketology strategy at a client workshop involving 120 managers and department heads. Hernbroth said:
“[Bracketology] 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 . . . it takes steps that lead to further steps, as in brackets.”
Business Coaches Can Provide Critical KPI Assistance
The business coach is in a unique role to lead the process of discovering the ten KPIs of a business. Armed with the financials to evaluate the results, but also the acumen to understand where the results come from, the business coach can engage ownership in a critical strategic activity.
You can use the following approach to create and organize your company’s discovery process:
- Define or review the mission, vision, and values of the organization. Highly recommended resources are Jim Horan’s One Page Business Plan books.
- The mission, vision, and values should answer the following questions:
- Mission – What do we do? Why do we exist?
- Vision – What do we want to be?
- Values – What do we believe? How do we act?
- In the KPI Resources section (at the end of this article), I’ve provided a list of resources, including a KPI Assessment Form, that can be used to ask the questions that need to be addressed.
- Included in the KPI resources are examples of Key Indicators (KIs) and Key Reports Indicators (#KRIs) that can help create the ten true leading KPIs. Create your own “brackets” to organize the evaluation and weighting of the various metrics.
As Gary Hernbroth said:
“It is recommended that you start with anything that your customers see, touch, taste, smell, hear, and feel – those impactful “Moments of Truth.” Set your KPIs in motion to support these efforts. Use the bracket exercise as a tool – and remember, this is the BEGINNING OF A PROCESS, an ONGOING JOURNEY, not a one-off exercise. KPIs enable your organization to always be measuring, adjusting, and creating new revenue paths, service opportunities, etc.”
SMBs Are Great Candidates for KPIs
According to Ron Person, author of Balanced Scorecards and Operational Dashboards with Microsoft Excel, 20% of the 2013 Balanced Scorecard Hall of Fame winners are small- to medium-sized businesses (SMBs). Person wrote:
“Actually, small and medium-sized businesses may find that Balanced Scorecards are easier for them to implement, and that the payoff comes quicker. Many SMBs are opportunity driven. SMBs providing high value in growing niches will see opportunity everywhere. Maintaining a focused strategic direction can be just as difficult as walking a kid in a straight line through a toy store.”
Make Your KPIs and Action Plans “S-M-A-R-T”
Hernbroth further commented on one of the by-products of the Bracketology exercise. “Whether you have a small, midsize, or large organization, action plans make your world (and ultimately your customers) go round. Never forget that what gets measured gets done. In order to measure anything, plans must be S-M-A-R-T.” Hernbroth explained S-M-A-R-T as:
SPECIFIC: What exactly is to be accomplished? (Renovate our office, add five items to our product line, gain new customers in a specific demographic, etc.)
MEASURABLE: How will we know whether we’ve accomplished it or not? Is there some way of measuring our degree of success (increase sales by 10%, reduce lost customers by 25%, etc.)?
ATTAINABLE: Make the goal achievable, something that can be accomplished – maybe with a stretch – but not something akin to landing on Saturn, which could debilitate morale. Stretch your people; don’t build fairy tales.
RELATIVE: Results based in terms of how it relates to the goal. No red herrings or busywork for the sake of staying busy; rather, by doing X, we can achieve Y.
TIME SPECIFIC: Attach deadlines and due dates – no “open-ended” projects. Evaluate everything in intervals, some longer than others, depending on what they are. Timely accountability matters.
Implementing KPIs is a journey that should be constantly tweaked. What a great role for the business coach to lead that transformation and put in the tools to monitor the success.
Free KPI resources include the following:
- Bernard Marr’s The 75 KPIs Every Manager Needs to Know
- KPI Library
- Free KPI Assessment Form
- webKPI List of Top 100 KPIs