Metrics are key to understanding your company’s health. Most businesses have some key performance indicators (KPIs) that they’re tracking. Some companies use Excel spreadsheets to keep track of the company’s health with a few KPIs that only the CFO and the CEO ever see. Other companies have long lists of metrics that they track but only look at once a year, and even then, the list is so long that the numbers are fairly meaningless. What if these metrics actually caused your team to take action, helped you make better decisions and even increased accountability and visibility at your company? At Rhythm Systems, we’ve found that there’s a better way to track and actually make your metrics work for you, not just sit in spreadsheet purgatory until the next time you dust them off for a cursory glance.
At the company level, the executive team has a handful of key metrics that are critical to understanding how the company is doing - things like revenue, cashflow, employee health. At Rhythm Systems, we coach our clients to identify the top handful of metrics that are most important to gauging your company’s health and put those on a dashboard. Set clear Red-Yellow-Green success criteria for each and forecast weekly how the company is doing on that KPI. Talk about any needed adjustments to keep these key metrics on track in your weekly team meetings. But, these handful of top-level KPIs don’t tell the whole story of what’s happening at your company, and keeping them at this level doesn't do much to help every individual in the company get better.
Each department also has key metrics that measure success. The sales team is tracking sales revenue and also leading indicators like number of demos or outbound sales calls. The marketing team is measuring the number of website visits or new contacts or social shares. The services team is measuring retention. So, each department leader also has a few key metrics that are important to the health and success of their team. These metrics often inform the numbers at the company level.
We’ve found that in order for people to be accountable and own the results that are expected of them, it isn’t enough to stop at key metrics at the departmental level. Each person ultimately has KPIs that they are accountable for delivering in their role within the department. If you are a sales person, you have KPIs for the number of demos that you personally deliver each quarter, and the number of sales that you personally close.
It sounds like we’re getting back to that long list that I mentioned in the beginning… But, Rhythm software has a better way of organizing your metrics that can give your company visibility and help you have the right information at your fingertips, no matter what level of the organization you find yourself. In Rhythm, you can set up a Composite KPI so that at the Company level, you see the top level result. In the executive team weekly meeting, your conversation is around the Revenue KPI, for example. If things are going well and this one is statused Green, maybe you don’t even have to talk about it.
But, if your top level Revenue KPI is Red, you’ll want to know why. You can drill down and see the rest of the story. You can look at the KPIs for different regions or even drill down further to see KPIs for each individual sales representative to see where the team might be getting stuck and how you might be able to make adjustments to get back on track.
As a department leader, you can drill down to see how your team is doing, and you can see how your team’s results are impacting the rest of the company by looking at how they effect those top-level KPIs. You can build accountability in your team by ensuring that the person who is responsible for delivering the result is the one who updates status on that result in Rhythm. In some companies, the department leader updates the status for their team. Having the individuals on your team update their status themselves allows them to be accountable for their own results and to see how their results impact the team and the rest of the company.
At the individual level, team members have visibility not only into their own results and how those impact the bigger picture, but also into the results of others. They can see a SuperGreen status by someone else on the team, and possibly collaborate with that person to get unstuck themselves. Plus, you’ve hired smart people with great insights into the customers you serve, or the prospects you’re trying to reach, or the products you’re building, so why wouldn’t you give them a voice and teach them to forecast their own results? As a leader in your organization, don’t you want the intelligence of your front line employees at your fingertips? Chances are, they know some things you may not.
The visibility Composite KPIs create is very powerful and helps people at all levels of the organization have the right information with a few simple clicks. If you’re a bit more advanced, you can also set up Composite KPIs so the same data can be viewed through different lenses. For example, let’s say you’re tracking a few key metrics about each of your customers, including Net Promoter Score (NPS). You can set your KPIs up so that you can view the client and see each metric connected to that client. You can also set up a Composite KPI so that you see the average NPS for all clients and can drill in and see the NPS for each client right there. You can have a great conversation about one client and all the things you’re tracking about that client, or you can have a great conversation about NPS and all the data you’ve got for different clients is right there.
In Rhythm software, there are lots of ways to customize your KPI views so you can be sure you are looking at the right metrics at the right time to have the data you need to make the right adjustments and achieve your goals - as a company, as a department, and as an individual.
Want to learn more about KPIs? Come to our Breakthrough Conference and attend the session “Using Rhythm Software to Tackle Complex KPIs."
Photo Credit: iStock by Getty Images
Photo Credit: iStock by Getty Images