I was at a new client’s office recently and was walking around meeting some of the management team. I stopped to talk to the VP of Operations, a busy guy bustling around answering questions and giving lots of direction to his team who also looked very busy in their maze of cubicles. I asked him how things were going and his answer shocked me because of its honesty. He said, “I really don’t know. I know we are really busy and everyone works long hours but I don’t know if things are going good or not because I’m not clear on what we are working toward.”
We talked further about his remarks which revealed a simple, yet all too common, issue for many businesses. The company had never identified it’s Key Performance Indicators (KPI’s) so the management team didn’t know how they were doing. To them, busy = good.
For those of you not familiar with KPIs, they are quantifiable measurements that determine if you are progressing toward your goals or not. Many businesses get caught up in getting the work out and never evaluate whether “the work” is supporting the overall goals of the company. The last few weeks, your Leadership Challenges have been about Strategy and Plans. If you missed either one of those, refer back to the Strategy Challenge (http://therectorgroup.com/leadership-challenge-for-week-of-may-9-2011) or Working Your Strategic Plan Challenge (http://therectorgroup.com/leadership-challenge-for-week-of-may-9-2011) before you move on.
This week’s Business Challenge is the KPI Challenge. Are you ready? Take a minute to think about and answer these questions:
1. Do you know what your company’s Key Performance Indicators are? ___Yes ____No
a. If yes list them.
b. If not, give some thought to what your overall goals are and how you will measure your progress, or lack thereof, toward that goal? List them here:
2. Do you have a system in place to measure and manage your KPI’s routinely?__Yes __No
a. If yes – describe your system. (who, what, when, why and how)
b. If no, develop one. Spend time with your team determining how each KPI you listed in #1 will be measured and managed routinely. Create it!
3. Are you regularly meeting with your management team to discuss KPI’s ? __Yes __No
a. If yes, describe how often you meet? Is it consistent? Are you using the time to discuss, learn and grow form the results?
b. If no, create a schedule and communicate with your team your expectations.
If you answered yes to each question, congratulations! Keep up the good work. If you answered no to 1 or more questions, use the above excercises to create a system to manage and measure the KPI’s for your organization. Good luck!
For additional information on KPI’s view my video: Key Things That Should Be On Every CEO’s To-do List
If you have any questions on this or any other topic, please contact me. I look forward to hearing from you!
Bruce Rector, President
The Rector Group