Know the Numbers – Aligning Company & People KPIs
On a scale of 1-10, how important to you is regular tracking of the numbers in your dashboard?
When I work with clients to help them upscale from 7 to 8 figures, they already have good businesses and some structure in place. But a 2M company will have less complexity than a 12M company, and as the business grows, there are more measures that need to be tracked.
Apart from the overall business numbers in the P&L and balance sheet, there needs to be correlation and alignment between your business KPIs and those for functional areas and individuals.
For example, if the business goal is to reach 8.5M in sales, then the targets for the sales team correlate directly to that number.
How to determine KPIs for other areas of the business and the people working in those areas? Production, operations, customer service for example?
1. Start by asking what they key outcomes are that you want to achieve for that area.
For example, customer service could focus on indicators like customer resolution rates (eg: 100% of problems resolved on the first call); it could report on green/orange/red coding of outstanding customer issues and apply a percentage to each.
2. Ask the question: what is an acceptable number/rate/score if we are to achieve our overall targets?
3. Align the KPIs of the people responsible for those metrics with the numbers themselves. For example, whoever is responsible for customer service is responsible overall for keeping those numbers within acceptable levels.
4. Then allocate individual KPIs to the people in your team responsible for each of the activities that drive the numbers. For example, a customer service team member may be responsible for providing first level response to all customer calls within 2 hours.
If you start with your high level numbers then break it down, you can have measures set up across the business and know by looking at the dashboards how well you are tracking and also, what exceptions may need urgent attention.