Having the right performance metrics helps you drive growth. Let me share with you six steps to implement effective measures to manage. Keeping a competitive edge in today’s marketplace requires ongoing investment in the transformation of your business. As Mark Twain said: To stand still, is to fall behind.
1) Clearly define your corporate goals
Without a clearly defined and documented strategy, it is impossible to set expectations and monitor performance. You can only manage what you can measure, so if you lack such a strategy, begin to brainstorm and evaluate opportunities for continued growth. Understand what your weaknesses and strengths are and begin documenting so that when it is finalized, you can share it with your employees. You may think that everyone knows where you are going, but don’t’ assume. No one has ever over communicated!
2) Identify short-and long-term operational goals
Take your strategy and identify what you want to accomplish short-term (3 mos) and what needs a bit more time (12 mos). This would include approaching the weaknesses and turn them into strengths. In operations you want to evaluate each step taken and whether it adds value or not to the final product or services. Think lean here and optimize the process.
3) Establish milestone, deliverables and tasks to support your goals
Now you may be ready for the roadmap. Establish milestones, deliverables to be achieved and identify tasks and who performs them. Now that you have documented and shared the strategy with your employees, it is important to listen to them and get their input. Agree on goals, objectives and timetables. Evaluate whether you have adequate resources, so you have a better chance of succeeding.
4) Develop and implement metrics for all key activities
This is where the measuring starts. Make sure you engage your employees in setting performance metrics. Here are some examples: Customer retention rate, supply chain rate of return, funnel conversion rate or call center support metrics. Be proactive and pay attention to leading indicators in your industry and pay less attention to lagging ones. Clarify expectations with your executive team and staff, empower your employees and boost their engagement. Set some incentives in advance and make sure that all metrics are objective and not subjective.
5) Monitor progress and make improvements as needed to stay on course
Now you have a roadmap in place that you can begin to monitor and manage. Your employees understand what is expected of them and how they can help the company grow. Making a difference goes a long way in terms of talent retention. There needs to be purpose and connection to the larger scheme as participation can give them a better understanding of how they personally can affect the business.
6) Assess the effectiveness of metrics and modify if necessary
Close the loop by evaluating regularly how the metrics are working. What is the assessment of your staff and how well are they adhering to these metrics? Do you need to change them, are they giving you information that is meaningful to the future of your business?
Start the conversation today regarding how you can drive results with the right performance metrics. Transparency and accountability will be on your side as you seek a way to measure and manage. This is an ongoing process and of course, if your business changes, so do your performance metrics.
My book “Stop Compromising” has its own chapter (chapter 5) on this topic and explains ways to think about KPIs and performance metrics.
Let me know what KPIs and performance metrics have worked for you and what particular leading indicators you use for your roadmap.