The companies I coach are in the game of business, not to survive – but to win! You can’t win by being thoughtful, yet complacent. In other words, having a one-page strategic plan along with the complimentary KPIs is thoughtful, yet can unknowingly be complacent.
In today’s economy, and given current worldwide markets, complacent could be a synonym for “losing” - losing market, losing clients, losing money, losing team members. I don’t like to lose. That’s why I recommend that you care about “special” KPIs – ones that give your team kick-butt focus and market-winning strength. It’s possibly the difference in ballistic growth, or bankruptcy court, over the next 2-5 years.
KPI stands for Key Performance Indicator. That is exactly the capability that the KPIs should give you and your senior team - indications. Indications including the ability to know at any point during execution whether your quarterly priorities and strategy formulated are, in fact, working.
There are never enough resources or energy in small to medium-sized companies to expand in every direction, every quarter, all the time. Therefore, I recommend getting KPIs right quarter by quarter. KPIs force your senior team to interpret the vision and then support it with the right measurement. By defining the KPI measurement, your team is forced to come to agreement on the metrics you will use to operationalize your lofty visions year-by-year and quarter-by-quarter.
The rhythm of creating appropriate KPIs each quarter forces you to consider integrating financial budgets in support of strategic goals. Once the RYG status criteria (you might call them performance measures) are agreed upon, special KPIs – those with the most influence on desired outcomes - can be identified.
Weekly adjustment meetings offer a mechanism for strategic feedback, and your KPIs help you foster a learning environment that many companies miss: the right forum to reflect on progress and adjust your approach before being blind-sided at quarter end.
Notice though, that these Key Performance Indicators are not called API (ALL performance indicators). As a high school student, I drove an old vehicle that had a tendency to overheat. Even though I had on my dashboard all the performance indicators, including a tachometer and a speedometer – neither was a special indicator of whether the engine was about to overheat. Only a temperature gauge could do that.
I was fortunate that my temperature gauge indicated temperature in degrees, not just a red range as stamped on the indicator. When I wanted to know on a hot day if my engine was in danger of overheating, I ignored all the gauges while focusing only on the temperature gauge.
All this to say, you may have multiple KPIs in your business, but don’t choke your team on all of them. There are a special few that give you early warning of failure – and those are the ones you want to monitor most. Determining those special few – and then verifying that your status gauge is indicating the “correct temperature” will drive you to success.