Introduction
Let's face it, to err is human. In addition to saying "You can't improve what you don't measure", the famous business leader Peter Drucker also said:
Keeping this in mind, in this article we share our secret sauce in not only integrating and sustaining a daily discipline of KPI reporting across your company, but also how to make it simple, quick, engaging and even fun.
Over the years, this simple methodology has served our team as a starting point in putting time management at the top of each business relationship and giving managers opportunities to grow into leaders by being better prepared to approach uncomfortable situations via transparency and non-confrontational reporting.
After having used this methodology for more than four years every day across our company and teaching our clients to do the same, we confirm that following this road map can save your business significant amounts of time, money and mental energy when managing expectations across stakeholders.
Start Simple
Although every company's portfolio of metrics should be well thought out, support executive strategy and have strong relational logic between underlying lead and lag KPIs, we believe the motor of your KPI machine should be fuelled daily by those doing the work: your process owners.
If Senior Management is still having difficulty cascading strategy and developing a sustainable KPI reporting discipline across the company, it should not stop team leaders from leveraging KPI management to make their lives easier and manage up on a daily or weekly basis.
There are three key areas every team leader should address prior to closing their shift. The procedure should not take more than 15 minutes on average and should provide insight into:
1. Customer Complaints
Start with the complaints from those you serve. As Jack Ma says, "Opportunity lies in the place where the complaints are." Whether you manage a team of 5 or 500, very few things should be more interesting to you than the opinion that those you serve have of you.
This KPI is the first indication of your customer's level of satisfaction and, in cases of underperformance, if this log is kept well, you will be in a strong position to begin approaching problems constructively with your customer, whether internal or external.
Each team should put together a list of the most common complaint categories so that if a complaint comes in you can quickly identify:
- When and who the complaint came from
- The complaint type
- Details and notes explaining as much of the event as possible
Once complaint types are agreed, use a bar chart together with a Pareto chart to review and report monthly complaint totals by type in team meetings with the plan to eventually take the discussion to your client.
2. Misunderstandings, Incidents & Missed Commitments
This KPI offers arguably the best insight into how well your communication standards are. For our team it has been a life-saving KPI allowing us to remind our clients, vendors and staff members where our relationships need to be improved.
Unlike the first KPI, which is aimed at pinpointing where you can improve your process delivery model, this KPI is two-sided and identifies where leadership skills and management intervention may be necessary to resolve conflicts and disputes. It may also point to where further investment opportunities are necessary to improve the efficiency of your value chain.
For each business relationship a team leader manages, an individual KPI should be created which identifies:
- The day in which an incident was reported
- Incident type
- Details and notes of the incident occurrence
Using a bar chart to show frequency and volume together with a Pareto chart to show root causes, this information helps drive root cause analysis discussions with your team while being more objective when engaging business partners to improve handoffs.
3. Hours Dedicated to Creating Value, Hours Dedicated to Issues
Out of the three crucial KPIs in relationship management, this one usually takes the most daily effort because it is not binary like the prior two. Instead, this KPI requires the KPI owner to reflect each day and acknowledge how much time was spent on each activity performed.
In doing so, the team leader calculates in which areas resources were dedicated, attaching figures to the time elapsed, something that becomes increasingly difficult the longer one waits.
Some KPIs in this category that allow us to better manage staff, vendors and clients include:
- Product downtime
- Hours spent working on a project
- Hours spent in meetings with a particular client or vendor
- Unbilled hours working on client or vendor projects
- Hours spent resolving a chronic issue or fixing product bugs
- Hours worked by staff
The clock is always ticking and the more control your process owners have of their minutes, the better position you will be in to put a value on everyone's time and offer suggestions for improvement in your relationships.
In Closing
Developing daily discipline to anything new is always difficult without the right motivation and often proves unsuccessful. The key lies in simplicity and the immediate value one's time commitment will yield.
Our team tracks over 120 KPIs on a daily basis, most of which are completed at the end of one's shift. Although this number may seem overwhelming, once a daily discipline is established the effort becomes minimal and an enjoyable way for each process owner to capture, review and reflect on the day's activity.
The time spent completing this exercise, which usually does not exceed 15 minutes, ensures that each team revisits open issues while allowing team leaders to be proactive and wiser in planning next-day activities.
The efficiency offered by the three KPIs mentioned in this article is that they are standard across the company, can be assigned immediately to anyone responsible for managing relationships and are valid regardless of whether or not your C-Suite has formalised company strategic objectives.