Key Performance Indicators that Drive Improvement

Every business knows they want to be profitable and so they keep looking at quarterly numbers. Some look at the numbers on a monthly basis. A few will take weekly look. But all that data won’t drive improvement. Those financials and contact numbers are always looking in the rear view mirror. They are pieces of Lag data. If you want to drive improvement, the data you want will focus on the behaviors of your people. Those behaviors will influence those lag data pieces you want to see improvement in. If you always focus on the past, you will never influence the future.

If you want to change the future, you must change behaviors. But what behaviors can be changed that will get you where you want to go? There are 5 key performance areas that can each really drive improvement and each of these has a few subsets. Here are my 5 key performance drivers: Culture, Leadership, Operations, Training, and Service. Each of these has a few key behaviors that can be measured and the data generated in these measures can be considered to be Lead Data because this data drives improvement. Let’s look at each of these Lead Measures and some of their subsets.

Culture is all about how things get done in your organization. The individual components are factors like safety, consideration, communication, how disputes are handled, and connectedness. There are other factors but this gives you an idea. The Culture bottom line is how your people feel about how things get done. Do they feel valued or used? Are they validated or marginalized? Do they feel committed or is this just a job? Any of these factors can be measured and if you find that your people aren’t feeling about your business the way you want them to feel, you can create strategies and tactics to improve things and have periodic checkups to see if things are improving.

Leadership is a matter of establishing a shared set of values and principles and then making sure everyone is fully aware of what those values and principles mean to the organization. When leaders are crystal clear regarding expectations, provide clear guidance as to how everyone can meet those expectations, and then coach people in their attempts to employ the behaviors most likely to achieve the expected outcomes, the leader-follower relationship is highly productive. Do your people know what the values and principles are of your organization? Do they know what you expect of them? Do they know what to do to be successful? Leadership begins with making sure this is well known and understood. Great leaders support their people as they work their way through these expectations under the umbrella of the organization’s values and principles. As with Culture, these aspects of leadership can be measured and you can quickly determine if leadership is all it can be or if improvement is needed.

Operations is about the systems, processes and procedures that make a business run. A company is trying to accomplish something. Does everyone know what that is? Amazingly, there are many employees, in far too many businesses, that do not connect what they do, in their job, to what the company is trying to accomplish. We’ve heard employees say, I’m just a bookkeeper, or I’m just a mechanic, or I just run this machine, and never stop to think that they are part of something so much bigger and so much more important. Helping people connect to the bigger picture increases engagement, improves understanding, and can motivate many employees to do a better job. The person making 500 of the same part every day may not realize that a critical error in that part could create a systems failure for a critical machine. A salesperson might sell more of a product than a factory can produce. An engineer might take so long perfecting a product that the opportunity is lost. Operations is about the coordination of all parts of the system to make sure everything works together. We can measure this and figure out what systems, processes and/or procedures need to be adjusted to make it all work better.

Training is so often overlooked or given short shrift but training can make or break a company. So, many people are expected to do things they’ve never been trained to do. Making the assumption that because someone has experience and/or education means they should be able to do what you want them to do, is not good business practice. For the best results, every job needs to be examined for the knowledge, skills and behaviors needed to succeed in the job and then every employee needs to be assessed for that knowledge and those skills and behaviors needed. Wherever there’s a gap, training is needed. Furthermore, every company has unique systems and processes that can only be acquired through training. And how else can people learn the values and principles of the company. Plus, just like Culture, Leadership, and Operations, Training can be measured and decisions can be made about what training is still needed.

The fifth of the 5 key performance areas is Service. Customer Service is critical to the success of every business. Making sure your customers are satisfied with your products and services is essential if you are going to retain them. But do your people understand how important service is? Do they know how to provide the customer service you expect? Assuming everyone knows how to provide good customer service is another big mistake. Making sure you have a system that tracks your customer service is also important. We’ve found that what gets measured gets done and what is not measured is too often ignored. Once again, these Lead Measures help us know whether we’re getting better, staying the same, or getting worse. With these specific lead data points, our decisions are better informed and more likely to generate the results we want.

Wouldn’t it be great if there was a simple assessment that could tell you how your business is doing in these 5 areas? There is! It’s called the Performance Gap Indicator or PGI. If you’d like to learn more about it, let me know. I’d be happy to explain how it works and give you more information.