The Right KPIs Lead To Success One Day At A Time
Employee engagement starts when everyone on your team can say, without confusion or hesitation, “I know what is is expected of me at work”.
To get there, you need the right KPIs in every functional area of your business. Departments such as marketing, sales, product development, operations, customer service, finance etc. each have their own unique KPIs.
These KPIs drive the outcomes you seek on a day-to-day, and week-to-week basis. They are metrics that drive your “Business as Usual” processes. They are not long-term goals or targets. just the opposite. KPIs measure activities that each team member can completely control.
You know that if they do the right things consistently, day after day, then they will inevitably hit those long-term targets and goals. KPIs empower people in the moment, and their effect is to grow your business steadily over time.
KPIs clarify performance expectations.
Once you get clear on the outcomes (results) you want in each area, you can drill down to determine the “Activity” and “Effectiveness” measures which drive these outcomes. Goals and targets are important, but you can’t “manage” them. You can manage the activity and effectiveness of your people that will inevitably achieve those results.
The buzz word often associated with this sort of management is “engagement.” According to research from the Gallup organization, employee engagement begins with each employee being able to strongly agree with the statement, “I know what is is expected of me at work”.
KPIs help to clarify performance expectations for your functional teams and for every role in your company. People become engaged because they know they can succeed at keeping their KPIs on track. That’s empowering, and engaging.
When you involve your people in selecting the right KPI measures, you increase engagement further. You are communicating your expectations in a clear and unambiguous manner, and calibrating what is expected to insure success on a daily and weekly basis. Everyone knows and agrees what a good level of performance looks like, and what a poor level of performance looks like.
KPIs help you to manage more objectively.
KPIs provide objective measures of performance, and this data enables you to “manage by fact.” People these days hate performance reviews because they seem subjective and arbitrary. Evaluating employee performance based on what they actually accomplish and what they actually do is far more satisfying for them. It takes subjectivity out of the equation, and gives them confidence that they “know what is expected” and are delivering it.
Being an effective manager requires having good KPI data in front of you so you know what sort of conversations you need to be having with each team member in order to manage and coach them effectively. When you have current, up to date KPIs displayed on a live dashboard, the manager can quickly see which people need your praise and acknowledgment, and which people need your help and support.
KPIs drive business execution.
When you keep your KPIs scores up to date and visible on your dashboard, and you discuss these scores at your weekly team meetings and in 1-on-1 meetings. This helps to ensure consistency of performance, and consistency of outcomes. It also enables you to address shortcomings or problems long before they have a serious impact on your business.
Larry Bossidy, former CEO of AlliedSignal, and co-author of the book Execution - The Discipline of Getting Things Done remarked, “When I see companies that don’t execute, the chances are that they don’t measure.” To Larry’s quote I would add the additional 3 words, “... chances are that they don’t measure .. the right things”.
KPIs focus people’s attention on what is important.
What gets measured gets done. Employees are faced with many competing demands on their time. When they know the small handful of KPIs that grade their performance, it keeps them focused on doing the right things – particularly when the KPI scores are made visible to their peers on a software dashboard and discussed at weekly meetings with their manager.
KPIs help you run more effective meetings.
Without current accurate data, you cannot run an effective meeting. You are wasting your time, as well as wasting the time of those attending. This is an area where I see many companies struggle. They try to run meetings, yet much of their data is either out of date, missing, or inaccurate.
Your dashboard must always “tell the truth” as you go into your weekly team and 1-on-1 meetings. Unfortunately, if you don’t have the latest KPI scores the manager:
can’t see which areas are performing well, and which areas require your attention
can’t see which people are performing well, and who needs your help and support
can’t have meaningful discussions about performance
can’t make well informed decisions
Also, if your dashboard software is not kept up to date it greatly loses its power to motivate your people. Keeping the KPI data current, making performance visible, and discussing the scores every week is a proven factor for management success.
KPIs help you to hold people accountable
If you use management dashboards, you must run effective meetings every week to discuss the KPI scores and coach your people accordingly. That closes the loop.
Here is my recommended approach.
If someone is struggling, talk to the non-performer a non-threatening and supportive way by stating the observable facts that are visible on your dashboard, and then ask the following 3 questions when you review KPI measurements with your team members:
1. What’s happening here?
Good or bad, this question allows the employee to respond. If they’re beating their target, they can brag about how they did it. If they’re in the red, they can explain what’s wrong.
2. What action can we take this week to move this forward?
Let them come up with solutions first. A-players will have creative ideas about improving your business. Strugglers will feel empowered to improve themselves.
3. What support do you need?
This last question works magic. Make it clear that you are on their side. Make it clear that you support your team so they can be successful. Work together to come up with tangible actions, and capture them in your Meeting notes and as specific tasks. When the employee helps do this with you, their commitment level skyrockets.
Holding people accountable for achieving the target level of KPI performance every week is vital to ensure the company (and individual) is on the right track. And always remember, you only succeed as a manager when your team succeeds.