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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5 Steps for Effectively Delegating & Managing Work

A 5-step process by which to effectively delegate and manage delegated work.

DelegateDelegating effectively allows managers and leaders to free up time; ensure the work is down to the right person at the right level and on-time; helps to develop people and their capabilities, and allows the managers and leaders to focus on what is important – not just what is urgent.

Creating the Conditions & Capabilities for Delegation

For effective delegation you need to have:

  1. A culture which supports and allows delegation to occur
  2. The desire and the ability to delegate
  3. People with the necessary abilities and attitudes that you can delegate to.

If you lack any one of these it makes delegation difficult.  As such be clear as to where you are on these factors and what you need to do to address them if necessary.  Yet even if these conditions are in place many managers and leaders find it difficult to delegate.  Common reasons for this include:

  • Short-term thinking – it would be quicker to do it myself
  • Perfectionist thinking – I can do it better myself
  • Requires an investment in training/mentoring of others – I don’t have anyone I can trust to delegate it to
  • I don’t know how to delegate

The key to enabling others to delegate is to understand what delegation entails.   I define delegation as:

A task, for which a nominated individual(s) is given specific responsibility, to complete in part or full, by a given time to produce an expected outcome or result, and for which you will receive feedback on.

The 5 Step Delegation Process

  1. Identify the Task – be clear on what the actual task is that you are asking someone to complete.  In doing this put a clear frame around it – what does it include and what does it exclude.  Providing a clear description and understanding of this is critical.
  2. Nominate the Individual(s) – Identify the person(s) who will be involved in the completion of the task.  Be clear as to why you want them to do it (is it for personal development reasons, part of what they need to be able to do to gain promotion etcetera?), and make sure they understand this.

    Delegation Process
    The 5-Step Delegation Process
  3. Define the Responsibility – when discussing it with the nominee(s) ask them to summarize what they have understood that you want them to do – this will quickly highlight any discrepancies or misunderstandings before they can become problematic.  Check that they are prepared for this responsibility and are committed to completing it within the scope and timeframes that you have determined.  You also need them to be clear on your expectations as regards their completing this task and the associated results and outcomes.
  4. Completion – do you want them to complete the task in full, or only in part, before they report back to you on progress made.  If it is an area in which they have little experience, or you have a low level of trust in their ability to do so, then get them to complete the first part before reporting back to you.  This gives you a checkpoint to ascertain how they are progressing, what further guidance is necessary, and if they can be left to their own devices to complete the task.
  5. Review – establish regular times for reviewing their progress.  If you are uncertain of their capabilities then you may have multiple review points during the work on the task, or you may ask them to report back once it has been completed if you have high confidence in them.  Reviews should be short and you must ensure that the responsibility for the work stays with the nominee(s), otherwise you will find the work delegated back to you!

By breaking the delegation process into these 5 simple steps it makes it easier for you to delegate, for those delegated to understand what they need to do and what is expected of them, and for the work to be done in a controlled manner which allows people to grow and develop without being micro-managed.  Use this with your people and see how much time and effort you free up for yourself, and how your people work more effectively.

We look further at delegation in the following article, How To Manage Those Delegated To.

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What to Do Before You Start Making Decisions

What you need to do before you start the decision-making process

by Andrew Cooke, Growth & Profit Solutions

Decisions Before You DecideWe make decisions every day; small ones, big ones, unusual ones, specific or general and those which have become a force of habit.  We get so involved in the decision itself that we become blind to the key dimensions that surround it. So what are they, why are they important and how can we use them to help us make better and more effective decisions?

The Four Key Dimensions

There are four key dimensions which need to be considered when making a decision.  This includes:

  1. Composition: Who should be involved in the decision-making process?  You need to make sure you have the right people, with the right information, who can contribute and develop the necessary decision.4 Dimensions of Decision-Making
  2. Context: In what type of environment does the decision take place?  Is it an open environment that fosters open, constructive dialogue?  Or a closed environment in which personal interests supersedes those of the group?
  3. Communication: What are the “means of dialogue” among the participants?  Does it involve considerable direct discussion with those with relevant knowledge and expertise, or is it ‘filtered’ through reports from senior people in the hierarchy?  Are there face-to-face meetings or is it via phone, email, reports etcetera?
  4. Control: How will the leader control the process and the content of the decision?
  • Control of the Process how do you want to shape the way that the deliberations are undertaken and followed;
  • Control of the Content how much do you want to control the outcome of the decision

This last factor- Control – is the hardest, and has the greatest impact on the decision.

A Balanced Approach

A balance between control of the process and control of the content is required.  Too little or too much control of the process and/or the content will result in sub-optimal decisions.  Some of the impacts of low or high levels of control on the process or content are shown below.

Impact of the Level of Control of Content & Process in Decision-Making

 Decisions and Control

So how can we achieve a balance in controlling both the process and content of a decision?  There are three steps:

 3 Steps for a Balanced Approach

1.      Be Clear on the Decision

Are you clear on what the decision is that you are making is?   For example, you are looking at how to improve your retention of key customers.  This is not a decision; this is a problem that needs to be solved.  Be careful not to confuse decisions with problems.

2.      Know What Objectives & Outcomes You Want to Achieve

Have a clear understanding of where you want to be as a result of the decision you have made.  Knowing this will help you understand what expertise and information you need, from whom you need to get it, and the people who should be involved.

3.      Have Checks & Counter-Balances

You will find that you and others involved in the decision-making process will fall into common decision-making traps or errors of judgement.  Understanding them, and how to avoid them will provide you with the means to check your collective thoughts, ideas and insights and reduce the likelihood of your decision being subverted.

Use this as a checklist – make sure you address the four dimensions: Composition, Context, Communication and Control – and build the means for better decisions.  Will you share this with your colleagues and those who participate in your decision-making processes?

It’s your decision.

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