Research shows that our economy is largely being driven by middle-market firms, especially those in the service industries. According to a press release from American Express:
Rhythm Blog | KPIs & Dashboards
by Patrick Thean and the Rhythm Team
The common mistake many companies make is to start designing a bunch of Key Performance Indicators (KPIs) for their company. They start with a burst of energy, gather together the team and work on KPIs in a quarterly planning session. They ask, "What do we need to measure in each department?" This produces 18 to 25 KPIs, a couple for each key executive to work on. Convinced they have changed the company, they dash off excited to see what results they will generate in the upcoming quarter. A quarter later, many are demoralized and not much progress has been made measuring these KPIs. They lose steam and by the 3rd quarter, it's back to business as usual.
It is no secret that your people are instrumental to the success of your business. In order to have a great company, you not only have to hire the right people and get them in the right seats as Jim Collins says, you also have to work to retain and engage those people once you have them.
Employee engagement is key not only to increasing productivity and lowering operational costs; higher engagement is also linked to higher customer ratings, less employee turnover and fewer safety incidents. Gallup estimates that “disengagement costs the U.S. $450 billion to $550 billion per year.” In Rob Markey’s Harvard Business Review article “The Four Secrets to Employee Engagement,” he cites a frightening finding from Bain & Company, that "engagement levels are lowest among sales and service employees, who have the most interactions with customers.” You can see the problem when the people who have the most influence over whether you will get and keep customers essentially don’t care one way or the other.
Are you actively working to attract and retain the right customers? Whether you are business to consumer or business to business, there’s an actual person who makes a decision to buy your product or service - your customer. We’ve found that customers represent one of the 4 critical areas every company must actively work on to achieve success. There are a few things your company should do to cover your bases in this area, and it requires more than just training your employees to “talk with a smile." You need to identify your Core Customer and their specific needs as part of your overall business strategy; this will help you when making strategic decisions about products and services to develop (or kill), marketing messaging to attract the right prospects, and a Brand Promise Guarantee to help you close the deal.
Because Rhythm acts as a framework for pulling together into one single system many improvement initiatives and management tools that are popular among manufacturing companies, many of our most successful clients come from this industry. One area that our clients come to us for help with is determining the right KPIs (Key Performance Indicators). Some are not sure where to start, and many are measuring so many things that their metrics are just noise, not driving action or change.
Leading indicators and results indicators are both key performance indicators (KPIs). I love leading indicators. The right leading indicators will guide you towards your desired outcome. If you pay attention to them, you can't help but think of necessary adjustments if you start veering away from your desired results.
In working with thousands of companies around the world, our consultants have learned that for most companies the weakest link in executing business plans is not having clear success criteria. Often, companies will invest the time and resources to create a solid plan for the quarter, complete with Key Performance Indicators and Priorities. However, if they stop here, these companies could run hard and fast all quarter only to find that they were not aligned on what the objectives were for the plan. This is the pitfall we want to avoid - unless you set aside the time to establish and agree upon clear success criteria for your quarterly plan, you could work very hard and still not accomplish much.
I have received a lot of feedback from folks using the Rhythm softwaresharing how turning every quarter into a 13 Week Race™ has really improved their execution and company results. Forecasting their ability to succeed every week appears to be a key differentiator in using Rhythm's Red-Yellow-Green® method. Every quarter, they have a strong and clear vision for execution. Then week by week, they forecast the probability of achieving their goals for the quarter. They make adjustments when necessary every single week. They try to anticipate where the challenges and obstacles may come from, and pounce on those challenges. They meet them head on, solve them and go on to win every quarter!
It’s that time of year again – just about everyone on a traditional calendar year is gearing up for Annual Planning! You and your team will invest so much time, money and effort in finalizing your 2018 plan. If the outcome isn’t a clear, executable plan with well-written initiatives, those resources will have been wasted.
When consulting with clients to review their Annual Plans, here are some things we look for to determine if their Annual Initiatives are set up to deliver success. All execution-ready Annual Initiatives share these characteristics:
Measuring the right Key Performance Indicators (KPIs) is vital to the health and success of your business. However, when we onboard new clients, we find that some of them are uncertain about what they should be measuring and how they can use these powerful tools.
KPIs are more than numbers you report out weekly - they enable you to understand the performance and health of your business so that you can make critical adjustments in your execution to achieve your strategic goals. Knowing and measuring the right KPIs will help you achieve results faster.