Refine Your Metrics Into Gold
Enjoy this series of shorts on Metrics from Jim.
To deliver the results you want, refine your metrics (KPIs) like you’d refine ore into gold. Your metrics must directly impact the most vital outcomes in your business; otherwise they are nothing more than an expensive toy, misdirecting your scarce resources.
SPEED BUMP: Worker actions are the prime driver of results, good or bad.
Your workers’ actions:
Since KPIs have a huge impact on worker behavior, it’s worth refining them. Here’s how:
Below are example KPIs for each of the important outcomes noted in point 1 above.
Table of KPI Impact
Once refined, KPIs are useless unless all employees (yes, ALL) know and understand them. The work that each employee does will impact at least one of your KPIs. If you doubt it, show an employee the list of KPIs, and ask them which is influenced by how they do their job.
SPEED BUMP: Invest as much in teaching KPIs as you do in developing them.
Soon after developing solid KPIs at a company where I worked, I met the production manager in the hall, looking up at the board reporting KPIs for yesterday and the week. Excited, I asked, “What do you think?” “I don’t know,” he said. “That’s for them” (pointing to the executive conference room). “It doesn’t affect me.” He was replaced within months, and the company went on to boost earnings significantly. (I had nothing to do with his replacement; it was already in the works.)
ACCELERANT: Who will you ask about their impact on KPIs?
A note on SPEED BUMPS: Use them to click quickly with an idea that can immediately be implemented in your life as a business leader. Think: “How can I use this today? or “Who can use this?”
Next up from Jim in this series on Metrics, Why Your KPIs Are Mush.
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