The most common pitfall I see in companies who are new to Rhythm and the
If you ask any salesperson what their #1 priority is for the quarter, they will tell you “to make my revenue goal!” True – but how are they going to make their revenue goal. Any salesperson with a goal but no game plan is set up for failure.
The same holds true at the Company level. You can set a target to grow to $200 million, but you must also identify the key priorities required to hit that number. A healthy Rhythm of Strategic Thinking, Execution Planning, and Doing the Work will accelerate you toward this goal. Setting KPI targets without defining priorities is just fool’s gold.
A Priority is a specific action statement. There is a verb. There is a due date and an owner. It simply states what activities you or your team are committing to deliver in the quarter. A Quarterly Plan consists of 3-5 Company Priorities for the whole group and 3-5 Personal Priorities for each person on the executive team.
Examples:
Company Priority #1: Launch new product X by Sept. 30th (John Product)
Company Priority # 2: Expand sales team in territory X (Susie Sales)
Company Priority #3: Complete due diligence on possible acquisition by May 5th (Joe CEO)
Personal Priority: Relaunch website with new product information (Jen Marketing)
Personal Priority: Hire 2 new sales managers (Jose HR)
Personal Priority: Review and edit contracts X & Y (David Legal)
Personal Priority: Complete beta testing of new product (John Product)
Personal Priority: Launch new comp plan (Susie Sales)
KPIs - Key Performance Indicator and Targets
A KPI (Key Performance Indicator) is simply a metric – a number you track that helps you solve a problem or gives you insight. KPIs can be divided into two categories: leading indicators and results indicators. A result indicator defines an outcome. These are your targets, or the number you need to hit. A leading indicator helps you know if you are on track to achieve your desired results.
Examples:
Results Indicator: $1 million in sales by the end of the quarter
Leading Indicator: $3 million in pipeline (necessary to produce $1 million in sales)
Results Indicator: 10 new customers by the end of the quarter
Leading Indicator: 50 face-to-face meetings (should result in 10 new customers)
Results Indicator: 90% client retention
Leading Indicator: NPS > 8.5
During your next planning session, be aware of KPIs masked as Priorities. To avoid this, set your KPI targets first and then develop a plan that will help you get there. And remember that priorities should include a verb, a timeframe and an owner. And both KPIs and Priorities should have clearly defined Red/Yellow/Green success criteria.
Learn more about how to have an effective Quarterly Planning Session here.
Annual Planning: 9 Tips to Focus & Align Your Team with a Great Plan
Annual Planning Playbook: 5 Steps to Create a Winning Annual Plan
How CEOs Can Avoid High-Cost Mistakes in Annual Planning
Best Practices for Annual Planning
Rhythm Systems Annual Planning Resource Center