I was looking for a reference guide of common KPIs to make it easier for the leadership team of one of the companies I work with to identify appropriate metrics to drive execution.
I reached out to my network of colleagues in Gravitas Impact Premium Coaches. They suggested Key Performance Indicators: The 75+ Measures Every Manager Needs to Know, by Bernard Marr.
The problem was there was no audio version and no text-to-speech feature. Listening to books while driving or walking my dog is my only option.
So I found this “for Dummies” version by the same author. It did the trick.
The gist of it
In Key Performance Indicators for Dummies, Marr provides, not only a list of common KPIs across the essential areas of financial, customer, internal efficiency and people, but also a comprehensive guidebook to developing and implementing KPIs.
While the book, in places, goes into more complexity than is needed for many mid-size companies, he does a nice job of explaining how KPIs connect with and support business strategy and execution disciplines.
Marr, an expert in KPIs and big data, emphasizes how KPIs, effectively developed, can support a learning culture of fact-based decision-making where leaders test business assumptions and strategies through metrics.
He also shares common pitfalls to avoid, such as tying compensation directly to KPIs, which unwittingly creates an incentive for employees at all levels to distort results.
The alternative, in my experience, when incentives are implemented to support an already developed performance culture, is to tie them to numbers that are regimented, centrally controlled and therefore not easily manipulated, such as financial results.
The irony of this book is that, while it’s designed as a go-to reference for picking KPIs, it recommends - and rightly so - to not just pick them from a list, but to do the harder thinking as a leadership team of what you’re aiming to achieve and what number you can track to tell you you’re making progress.
Length of book: 320 pages.
Bernard Marr is founder and CEO of the Advanced Performance Institute and author of 16 books on key performance indicators, metrics, big data, analytics and artificial intelligence.
How can you execute on KPIs more effectively in your company?
To find out how to have more efficient execution to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Complete section 4 to check your execution processes. Or complete all 7 sections to find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.
Incorrectly staffed leadership positions can paralyze your company growth. Here's what you can do about it.
When entrepreneurs come to me with growth problems, the question inevitably arises: Why? Is there a lack of market for the product or service? Is it the wrong strategy? Is it a lack of execution, or perhaps the leadership team?
My counter-question comes off the cuff because it is unexpectedly direct and at the same time a very crucial question. I ask them: Who? Who sits in the management and leadership positions in your company today? If you were to fill these positions again, would you put the same person in that position again? And: Would this person be able to bring out their best, to have the best effect?
Albert Einstein is said to have quoted the following:
Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid .
It remains to be seen whether Einstein actually said this or not. But let's expand on this point for a moment: what if the fish is already up the tree? Is he still learning to fly?
Who is sitting in your tree right now?
The question I would like to ask you at this point: Who is sitting on your tree right now – in the key positions in your company? And why is this person sitting there? Because of their leadership skills, because of their potential, or perhaps for other reasons? Is this leader, who may have been the right choice for this key position then, still the best choice today? Especially for the growth path you want?
This question “Who is in the key positions right now?” is asked far too rarely - and usually only when all other attempts to solve the growth problems have failed. Why is that? Because the question is uncomfortable. You may even have been involved when these positions were filled.
Who likes to admit that he or she has a personnel problem in the management ranks ? Many do not recognize wrong appointments immediately. Others tolerate them - out of friendship, lack of time (there are always more pressing issues that still need to be resolved) or lack of alternatives (a bird in the hand).
It is poison to your business growth for two reasons:
Reason No. 1: If you, as an entrepreneur, do not recognize your personnel problem, you will only notice the damage that the wrong people in key positions are causing when it is too late.
Reason No. 2: As an entrepreneur, if you tolerate your personnel problem and hesitate to fill key positions, you consciously forgo the potential that more suitable candidates could bring and thus deny your company significant growth opportunities.
Find the right people for your key positions
What can entrepreneurs do now to ensure that the right people are working in your key positions? I ask my clients the following questions to honestly evaluate their leaders:
1. Does the person share the same values?
Value-oriented leadership creates a common set of values that increases the cohesion and willingness to cooperate of all managers and employees. Knowing that a leader holds similar beliefs often encourages employees to follow them and increases the odds of success at each goal. This increases engagement, performance and even loyalty to the company – which in turn has a positive impact on growth and profitability.
2. Is the person behind the company's purpose?
What does your company exist for and what is your specific contribution to make the life of your customers, our society, the environment, the planet, etc. a little bit better? When the "why" of a company is clear, it is easier for your teams to pursue your common goal.
It is all the more important that your management team is 100% behind the purpose of your company. Because the more credible it is, the easier it is for you to tell an inspiring, gripping story and to set bold goals. The purpose is like the inner compass for everyone in the company. It brings people together, inspires them, gives them courage and the energy to think big, to defy setbacks and to keep going.
3. Has the person already gained experience in growth environments and do they bring the necessary skills for the position?
Putting a company on a desired growth path is not easy. It's no picnic - neither for the company nor for the managers and teams. So you need people who are up to the challenge. It helps if they already have experience in such extreme growth environments. This way they understand what is required and expected of them.
In high growth companies, managers deal with problems they've never had before. It's about trial and error, accepting mistakes, reflecting and learning from them despite the enormous pressure and ultimately turning failure into success.
Noor van Boven, Chief People Officer at N26, recommends:
"You should surround yourself with people who move in a similarly dynamic environment. You can be a painful critic, but honest feedback is helpful and has kept me honest as a leader."
Who among your leaders walked the growth path? Who on your team may have just managed something big? Who is brave and not afraid of failure?
4. Does the person share the vision of the leadership you want?
If a leader is to drive growth, then they must also think in these growth categories.
Carol Dweck, a psychology professor at Stanford University, coined the term "growth mindset" in the 1970s.
Leaders with a growth mindset welcome any opportunity to learn new things. They are willing to unlearn their ingrained beliefs and proven strategies. You are resilient to failure. They embrace failure because they see it as a natural part of learning.
Or as Microsoft CEO Satya Nadella aptly put it:
"We are moving from a group of people who know it all, to a group of people who want to learn it all."
Who among your executives continues to demonstrate a high willingness to learn? Who shares the same growth mindset?
The most important thing for entrepreneurs and owners of fast-growing companies is to surround themselves with the right people - and put them in the right positions. If there are problems with growth, having the wrong people in key positions is often the cause.
If you ignore such misappointments, you consciously accept the negative effects they have on the motivation, performance and commitment of your teams. At the same time, you prevent better-suited executives from being able to contribute their potential and thus deny your company significant growth opportunities.
What can you specifically do?
Look for individuals in your leadership team who share the same values as you do in your organization.
Make sure your leadership team has internalized the "why" of your company (the what that gives us purpose) and carries it consistently and authentically to their teams.
Surround yourself with leaders who have experience in dynamic growth environments and have already demonstrated the necessary leadership skills.
Work with executives who bring the same growth mindset as you do.
With best wishes,
If you're interested in reading more of Olaf articles please visit the website link above. (Please note that Olaf's site is in German but Google translate does an excellent job of instantly translating it to English.)
How can you elevate your people to the next level?
To find out what you can improve in your leadership team to grow more easily, quickly and profitability, try our complimentary Agile Growth Checklist*. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. This report is complementary and involves no obligation. Complete section 1 and 4 to check your leadership team* and accountability processes*. Or complete all 7 sections to find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth.
In a previous 5 Minute Growth Tip article, I discussed how strategy is not a lengthy action plan but the evolution of a central idea about how a company can be unique and valuable to its customers.
So if a strategy is about how the company needs to compete, then how does a CEO and their A player leadership team make it happen? With a best practice execution plan and process.
The Execution Challenge
In my experience over the last 17 years working with leadership teams, when CEOs and owners of mid-size companies decide to do formal planning with their leadership team, they often go through a traditional strategic planning process.
However, this often falls short of what they need to execute on their plan.
Many strategic plans include a mission or purpose, vision and values. These are all important. Yet there is often little about how the company will compete in the market or how the plan will be executed.
Often, these documents have vague plans for implementing whatever rough direction they’ve set out: some high level multi-year focus areas, or maybe some one year initiatives. In the best case, an annual budget is built with or without the strategic plan in mind.
From there, the leadership team members may review the company’s numbers quarterly, or maybe monthly. Although often, this doesn’t happen either.
In the meantime, the CEO assumes the leaders are working on making improvements and changes in their departments that align with the high level priorities set out in the plan.
After a couple of quarters, a few things can happen:
Does this pattern sound familiar?
Does it cause drama, tension and low morale? Usually so. Is it efficient? Not really. Does this hamper progress, growth and profitability? For sure it does. And is it any fun? No.
So, what’s the solution? Not a traditional strategic plan. But a strategy (which I outlined here) and an execution plan and process.
Our 3 key disciplines of low drama execution describe how it works: 1) Metrics and Targets, 2) Priorities and 3) an effective Meeting Rhythm.
Metrics and Targets
Watching the numbers may seem like the most obvious of the three disciplines.
We all know that tracking financial results is an important part of monitoring whether we’re on track. However, there are other key numbers to monitor as well.
While some metrics, like financial numbers, tell us how we’ve done, others give us an indication of how we’re going to do. This is the difference between lagging metrics and leading metrics.
For a company as a whole, lagging metrics will be things like financial results, units delivered and market share. Some leading company metrics may be customer loyalty, on-time delivery, employee engagement or the percentage of employees that are A players.
There are also different timeframes to set targets for with those metrics.
We want to set mid-term targets for our key company metrics, say for 3 years out. These targets should align with our 10 to 30 year vision, or Big Hairy Audacious Goal, as well as our best-guess estimates of what’s possible with the core customer and sandbox we chose in our strategy.
From there, we can set goals for those same metrics for the next year. For most of those metrics, we’ll also set goals for the first quarter. And finally, for many metrics, often leading metrics, we might be able to set monthly or even weekly milestones.
Setting short-term goals that align with mid-term targets that align with a longer term vision allows the leadership team to commit to biting off a certain amount of progress each quarter.
This way, we can check that we’re making enough progress over the weeks, months and quarters to achieve what we need to for the year, which will contribute to reaching our 3 year targets and our 10 year vision.
The evolution of this is to work with each leadership team member to identify one or two metrics for each of the functions they lead, as well as goals for those metrics for the year and each quarter.
Metrics measure the results and state of our day to day operations, and how they’re progressing towards our vision.
Priorities, on the other hand, are the changes and improvements to those operations. These are what we want and need to implement to make it possible to achieve those mid to long term goals and targets.
Going back to my first article in this series on how companies need to do things differently to continue to grow and profitably, these priorities represent, in part, those very structures, systems and processes.
Priorities may also be about building or buying new facilities, equipment, or other significant capital assets, to expand or replace capacity.
Priorities should also build the capabilities needed to bring to life or strengthen the unique differentiation we chose in our strategy.
Like with metrics, we chunk these down from long term to mid term to short term. This again helps us make progress every quarter which supports the progress we want to make over time.
We can start with planning out what’s needed over three years. These are all the changes and improvements that need to happen to achieve our 3 year targets. For example, “Developing our middle managers” or “Upgrading our manufacturing plant”.
From our 3 year plan, we’ll choose our priorities for year 1 (we also call these Initiatives). They capture the handful of large multi-quarter change projects to bite off an important chunk of our 3 year plan.
And from our 1 year priorities, we’ll choose quarterly priorities (we also call these Rocks). These are the multi-month change projects that will help us complete one or more of our annual priorities.
The evolution here is for each leader to work with their own team to identify and choose the priorities they need to work on to change and improve their own departments.
An Effective Meeting Rhythm
It’s great to know what targets need to be achieved and what priorities have to be accomplished over the next quarter to make progress towards our mid-term and long-term goals.
But we know that unforeseen things will happen during the quarter. Problems will come up. Things can get forgotten. People can lose focus.
So, how do we make sure our leadership team executes on our quarterly plan in the midst of all that?
Through regular communication. An effective and efficient meeting rhythm is the key.
This meeting rhythm includes:
The purpose of weekly leadership team meetings are to check if our metrics and priorities are on track, take corrective action to keep them on track, and solve problems in the day to day operations or with the priorities.
Daily leadership team huddles are to keep all team members in sync throughout the week and identify problems quickly so they can be resolved as they come up.
Monthly leadership team meetings are to check that our metrics, priorities AND monthly financial results are on track, take corrective action, adjust the plan as needed and tackle larger tactical or strategic issues.
Quarterly planning meetings are to check what we accomplished over the last quarter, adjust course for the year and set our goals and priorities for the next 90 days.
The annual planning meeting is to assess overall progress, note market trends, adjust our strategy, long term vision and 3 year targets and priorities, and decide what we’ll bite off with our goals and priorities for the coming year and first quarter.
With a clear purpose and a proven agenda for each type of meeting, and with the right people running the meetings and keeping things on track, these meetings can keep the leadership team and its members focused and executing efficiently throughout the year.
Pulling it all together
A clear, aligned execution plan and an effective execution process will minimize drama and maximize efficiency and goal achievement.
However, this will work best if we create the execution plan with the leadership team, so there is efficient leadership team buy-in. And this goes for the strategy as well.
Combine all this with strong accountability practices and having A players on our leadership team, and we have a powerful mixture to reliably implement the structures, systems and processes to implement our strategy, build capacity, and grow consistently and profitably...AND enjoy the ride.
That said, this all may seem daunting if you and your leadership team are too busy working in the weeds.
If that’s you - and most CEOs I meet have this challenge - read my next 5 Minute Growth Tip article on how to shift from working mostly “in the business” to working more “on the business”, and having more time for you and your family as well.
How can your team execute with less drama?
To find out how to speed up execution to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Complete section 4 to check your execution processes. Or complete all 7 sections to find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.
Boost team culture, effectiveness and moral
In partnership with Growth Faculty, we are delighted to offer you a 15% to a Live Virtual Event – 6 Types of Genius in a Happy & Engaged Team – with Patrick Lencioni.
Companies don’t need a broken culture right now. Unhappy staff and low levels of trust destroy teams.
Turns out, finding happiness and fulfilment depends not just on a healthy culture, but also from a deep understanding of your areas of working genius.
The world’s foremost expert on organisational health and teamwork, Patrick Lencioni returns to Growth Faculty in 2023. He will share his fascinating research on the 6 types of working genius, and how organisations can create a culture that brings out the talent in their teams.
Patrick is the pioneer of the organisational health movement. His 12 books, which include The Five Dysfunctions of a Team and The 6 Types of Working Genius, have sold over 7 million copies and been translated into more than 30 languages.
“[Patrick] challenges leaders to help their people unpack their innate talents and leverage them, not just for the benefit of the organisation, but for the direct benefits they can reap by living a more fulfilled life.” – Professor Kelly Goldsmith, Vanderbilt University
“Patrick was a very compelling speaker. His examples were very relevant, and there were practical tips that I can start implementing from today.” Meagan Quinlivan, Senior Manager, Product Intelligence, News Corp Australia (attended Patrick’s 2022 masterclass.)
Tuesday, May 23, 2023 - 6pm in MB, 5pm in SK
NON-MEMBER: $295* | OUR NETWORK: $245*
*Prices quoted in USD.
In a 2 hour live virtual team event, Patrick brings his storytelling abilities to explain his 20 years of research on teamwork, leadership, culture and high performance.
Access from anywhere this exceptional live and interactive session for executives and leaders, and their teams.
Patrick will share how business leaders and their teams can:
What can you do to grow your mid-size company?
To find out what you and your leadership team could do to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.
Great execution is critical to implementing strategy. But a great execution plan falls flat if there isn’t accountability. This is frustrating and costly. But it can be solved.
I’m proud to share a Gravitas Impact podcast on this topic featuring my colleague Mark Green in New Jersey.
Based on his Gravitas Impact monograph, Creating a Culture of Accountability, he shares guidance born out of the patterns he and our coaching colleagues around the world have identified working with CEOs and leadership teams from a variety of industries.
In this 30 minute podcast, Mark explains the 3 pillars of accountability: 1) leading by example (there’s more to it than you think), 2) role accountability (how it really works) and 3) process accountability (how to make it happen).
Subscribe to Gravitas Impact Podcast: Android
How can you create a culture of accountability in your company?
To find out how to strengthen accountability to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Complete section 1, 2, 4 and 7 to check your processes that support accountability. Or complete all 7 sections to find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.