Half of the year is gone. Wonder if you’re on the path to be better than last year? Remember when you spent countless hours building this year’s strategies and getting management and your entire team behind them. Weren’t they critical? Sometimes when our heads are down we don’t take the time to look up and see if we are anywhere we thought we should be by now. Budget, plan, schedule, execute and follow-up. Yes, I have preached this process through operations and sales for many years now. The follow-up is the critical piece.
For myself, I use activity reports and benchmarks; otherwise known in most companies as KPIs (Key Performance Indicators), or other lofty terms such as performance metrics, business indicators, or performance ratios. These KPIs should let us know if we’re really on the right path to hit our revenue goals for the year. If you wait until the end of the year, fingers crossed, you’re not being an influential manager; but merely a placeholder in the position that will be replaced before long.
When I look at KPIs I think of them in terms of a batting average. If my team is batting 1,000, then I really haven’t challenged them enough. Now, if they are batting less then .150, then I probably put too much on them or haven’t trained them properly. Most pro athletes work hard in every practice as if it were the real thing—a rivalry game. They work aggressively to hone in their skills so when they are in a game, each swing counts. There is little room for error if you want to be better than the rest.
Today, as a coach, I push my group to practice over and over again so when they do get a swing at the plate they make it count. If they are batting .300 I know I am on the right track. Now what I need to do is make sure each of them gets more opportunities at the plate. So if their average is low, the only way to make it better is to get more swings in.
Inside and outside sales are easy for me to talk through KPIs. The goal is always to have my team in front of and/or talking with the customer at least 50% of their day. This may sound simple, but when you track phone time by the second or an outside guy has 50 miles between customers, it’s very difficult.
Here is an easy hypothetical:
Let’s say my budget is to get 50 new programs signed by each sales person per year. Outside sales people on average would need to sign 4.13 per week. If they are batting .250 they need to schedule 25 calls per week to execute on the budget. An activity KPI would be for the appointments scheduled for next week. An inside sales person needs to be either emailing or on the phone for 4 hours. Tracked by second, the average talk time, depending on product, could be anywhere from 2 to 15 minutes. Let’s take 5 minutes as a round number. Twelve calls an hour for 4 hours would be forty-eight calls a day. My follow-up reports show whether the sales person is on track to hit their numbers and measures the activity they are doing to hit their budget.
All of this revolves around my key metrics. I can’t emphasize enough that for your business or department, no matter your role, you have got to figure out how you are going to measure where you stand so you can address the issue. KPIs force you to look deeper and make the changes required to get back on track before it’s too late.
To learn more, review the new feature article, “What gets Measured, Gets Managed” in the Better Managers Resource enewsletter.
By Richard Goering, Guest Blogger, 3C Network
Richard is a top performing sales and operational leader in the building industry backed by 18 years of experience. He currently is the Executive Vice President of 3C Network. His previous position was as the General Manager for BlueLinx Corporation (a leading national wholesale distributor) presiding over the entire northwest & mountain regions of the US including Hawaii and Alaska. Richard’s career path has encompassed various positions held across the nation and abroad. He has a B.S. in Sports Management and a minor in Public Relations from Georgia Southern University.