Having the right Key Performance Indicators (KPIs) on your CEO dashboard is very important to ensure you are driving the right behaviors in your business, monitoring the right results, and making the right adjustments to grow your business and hit your targets. I often get the question, particularly with new clients that do not have KPI dashboards established, “What KPIs should we be tracking?”
And here comes the time-honored consultant response, “It depends.” I know—I am being a bit facetious, but it really does depend; it depends on the type of business, the maturity of the business, what problems you are trying to solve, what things you are trying to improve as well as who your stakeholders are. I could go on, but I am sure you get the point. That said, there are some KPIs that I believe should be on most CEO or leadership team dashboards.
Kaplan and Norton put themselves on the proverbial map with their work in The Balanced Scorecard. Their four perspective categories are Financial, Customer, Internal Business Processes, and Learning & Growth. It is important to have the right mix of KPIs to run your business in a holistic and balanced manner. I believe it’s important to balance revenue growth, profitability, improving processes and procedures, all the while investing in your people. At Rhythm, we provide a scorecard view using the categories Employees, Customers, Revenue and Processes (in addition to the option of customized categories and dashboards for your KPIs).
I recommend 3-5 KPIs in each of these four categories with a balance of leading indicators and results or lagging indicators. Personally, I think leading indicators are even more important to drive the behavior you need to get results you are looking for. With that in mind, take a look below at some suggested KPIs in each of the four categories that I think are important and have seen many of my clients use through the years.
- Employee satisfaction
- Employee turnover
- Employee training
- # of High-potential employees
- # of "A" Players
- Attrition (voluntary)
- Customer satisfaction (Net Promoter Score)
- # of Customer complaints
- Customer retention
- Customer churn rate
- New account revenue
- Customer lifetime value
- Gross margin
- Net margin
- EBITDA (Earnings Before Interest, Taxes, Depreciation, & Amortization)
- Innovation dollars invested
- Cashflow runway
- Revenue per employee
- Operating efficiency
- On time delivery or fulfillment
- Inventory turnover
- Quality (rework, defects per XX, etc.)
**Here are a few bonus KPIs that I offer for your consideration as well:
- New Leads/Opportunities
- Customer acquisition cost (CAC)
- Sales calls made
- # of Face to face sales or customer visits scheduled
- MQLs – Marketing Qualified Leads
- SQLs – Sales Qualified Leads
For those of you creating your CEO or leadership dashboard, please consider the suggestions above, and add to the list or edit it to fit your unique business and challenges. If you have other KPIs that you believe are non-negotiable, please share them so that others may learn from your experience.
Now that you know your numbers, where should you spend your time? What should a CEO focus on is an insightful blog post that will help you should schedule your time.
Good luck, and grow with purpose. - Alan