Creating KPIs that drive engagement & performance

How to create KPIs that drive engagement and performance

Setting KPIs

“If you can’t measure it, you can’t manage it”. 

Although this is true many companies don’t know what to measure or, if they do, they don’t know how to establish KPIs.

Why is this so important?

KPIs drive behaviour – if you know you are being evaluated against certain metrics then you will adapt how you work and how you perform.  This sounds good, but it can also be highly counter-productive, especially if you don’t know what to measure or measure the wrong thin. The result: bad management, mixed messages, confusion and employees focusing on the wrong thing.

You need to establish and develop your KPIs with care. Have too few and you may have an unbalanced “portfolio” of KPIs, have too many and it becomes a case of “everything is a priority, nothing is a priority”.

KPIs vary for different areas and different roles – but they are all underpinned by one factor: the company’s strategy and operations.  As such your KPIs are the indicator of where the company is headed. But it is also the one area that many companies mismanage as they are not thinking about how a KPI is helping the company to meet its targets.

Goals are not KPIs

A common mistake is to confuse KPIs with goals. The two are not the same.

For example, a company wants to achieve a $100 million of sales – this is often assumed to be the KPI when it is not.  In this example the KPIs there should be about the sales process. The KPIs might be about how many new customers, how many customers visited gave a repeat visitation, how many of those visits ended up in a presentation and how many of those were closed as deals. The KPI has to measure the process. You want the KPI linked to the corporate goal but it is not the goal itself.

When looking at the process you are measuring make sure that the KPIs relate to the corporate goals.  For example, having a KPI of sales reports in time does not drive sales – it only supports the process.  Furthermore every industry has formal KPIs (often found in the job description) and informal KPIs that are not written down. Like incongruent KPIs pulling in different directions, they can leave employees confused and disenchanted.

KPI is about Performance, Not People

KPIs are not about measuring people, they are about the process.  The KPIs are there to measure the performance of the organisation and KPIs are tools that people can use so that they can work not just in the business but also on the business, in other words improve the way the business works and improve its performance. They track the strategically important goals and objectives of the business.

Developing KPIs

It is absolutely critical for managers to develop the KPIs in consultation with the employee.  Developing them in isolation and imposing them on high creates, at best, a lack of buy-in and at worst total disengagement.  People want to succeed, and they want to be involved in how they succeed.

When discussing this you need to talk about three things:

  • What the person is employed for, and
  • What is going to give them satisfaction that will ensure they stay loyal and motivated; and
  • How this relates to the company’s main goals

Once there is a shared and common understanding you need to discuss the KPIs that are most effective and relevant to the processes that affect how they work and perform.  This is not to say that each individual has their own unique set of KPIs, rather that there is an agreed and understood portfolio of KPIs that complement and reinforce each other, whilst aligning the individual and team(s).

Monitoring KPIs

KPIs need constant monitoring to have relevance.  If they are measured, for example, only on a quarterly basis then it becomes like an exam.  It is viewed as being extraneous their job, rather than intrinsic. This creates a feeling of irrelevance, a lack of commitment to the KPIs and people having to be forced to comply – creating ineffective KPIs and reduced performance.

So what have you done and what are you going to do with your KPIs?  Talk to your people. Be clear on your goals, understand the key processes to be measured, and make the KPIs relevant, meaningful, measurable and review.

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Five Ways to Generate Opportunities and Possibilities

There is only one way to generate real opportunities and possibilities that can take you to the next level, whatever that may be for you. And that is to take action.

Here are five ways to accelerate your ability to take action:

  1. “Try not. Do or do not. There is no try “– Yoda (Star Wars)

A great quote that makes a powerful point.  If you are going to do something, then DO it! Don’t wait around, even worse don’t say “I will” or “I can” – although they are intentional they lack intent. Intent is only apparent in action, so take action.

  1. Be Present

You can only exist in the present, and similarly you can only take action in the present. Action in the past cannot be changed, and action in the future is planning only. Take action, and do it NOW!

  1. Be Focused

Focus on what you can do and what you can influence. Don’t focus on what you cannot do or cannot control, it will only waste your time and effort and drain your motivation. Focusing on what you can do and can influence will help you gain traction and accelerate results.

  1. Visualize What You Want

This is not just wishing for something to happen. When you visualize you walk through, in your mind, every step that you are going to go through (and what will happen in each step). You don’t just imagine it – you see it, feel it, her it, touch it, and taste. Make it real in your mind.  The fact is that your brain cannot distinguish between what happens to you in real life and what you visualize in your mind. Visualizing helps you to do what needs to be done effectively when you actually take action. Practice visualizing what you are going to do which will help you get you what you want.

  1. Stop Procrastinating

Procrastinating uses and wastes your most precious resource, your time. Time once spent can never be regained. Often people procrastinate in the hope that a problem or issue will go away, or that someone else will sort it out for them. Get used to the fact that this very rarely happens, and if it does then you have abdicated any control or influence over the results that occur. Stop procrastinating and take action, this will help you generate opportunities and possibilities.

Take one of these choices now for yourself, right now, today. What is the impact of doing this for you? What have you achieved? Share your experiences here below in the comments section!

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Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.