This article was written by Erez Shilon, who is the Senior Product Manager of Leverate.
In the previous parts of this KPI series we discussed why we need KPIs and how to set them up correctly, but our KPI definition process cannot be complete without discussing what to do with KPIs once we have them!
This is a very important thing for any organization, since improvement comes from learning and it’s always better to learn together.
How do we know we won?
The first thing we want to discuss is making sure you are able to measure success. I refer to it in a simple motto I learned from my boss: ‘How do we know we won?’ This may sound simple, but the definition of success should not only be on the KPI goal level (which we discussed in part two), but also on the ‘ceremonial’ level.
During the year, we measure specific processes and compare our expectations to our performance. During that time we may hit our goals, but we should definitely ‘know’ that we did. Why do we need to know? Because this is exactly what drives us forward – the basic human need to advance and achieve more.
So how do we do it? At our company, the COO has two scheduled meetings: one for the KPI owners (each KPI is assigned to someone who owns it to make sure it’s implemented all the way through) together with the executive management. The second one is for the operations and R&D departments to share this information with the entire company.
In the KPI owners meeting we talk about what we did right (if we hit our goal) or what should be done better (if we didn’t). Each of those meetings ends with a list of action items.
Personally, I also have a similar meeting with the people who are relevant to my own KPIs. These meetings are much more hands on, people know the status of things, and they usually come prepared with explanations and/or ideas. This allows me to drill down and delegate responsibility to either maintain the current progress or fix something that is going wrong.
The 3 tier meeting model is critical for success. Here is how it works:
1. The KPI owners meeting: Each KPI has an owner who is responsible of promoting it. The owner then explains the status to management. This creates order in the process (management knows what’s going on, who is doing what), a sense of responsibility, positive reinforcement when things go well and help when they don’t.
2. The company goals meeting: When you take your entire organization and explain how things are going, you’re doing two very important things. First, you create a transparent organization. This is one of the most important things to do when working with millennials. If you’re running an FX brokerage and do not make sure that your employees know what the status of the company is, don’t be surprised if they keep leaving you. The second one is to ‘rally the troops’. Sometimes what most people need is to get a strong shake from the CEO/COO to get things going. This enforces the messages delivered by the KPI owners during the KPI team meetings (3rd tier).
3. The KPI team meeting: This one is almost obvious, but you’d be surprised as to how many organizations and managers do not make sure that the relevant KPI owners actually maintain a connection with the group of people which can impact the KPI the most. These meetings have to be ‘hands on’ level in order to ensure the needed action items are assigned to the right people in order to ‘win’.
What can go wrong
So all that KPI jazz sounds nice and all but, sometimes, reality has a way of slapping us in the face. Often times we will set a KPI, with a clear progress plan, but we won’t hit our goals, even if it may seem as though we’re doing everything right. This can happen for multiple reasons but personally I’ve seen two cases which repeat themselves.
The first one happens when the initial estimation was too positive. We thought we could do that, but we missed something. Another issue may be elements which are not within our control. Let’s assume that we want to increase client retention, but 5 months into the project, there are multiple stability issues in our data farm which causes some clients to leave us. When you have a very dedicated team which is working hard to make sure we hit our goals, this can be very frustrating and it can really damage morale.
Now, we’re at a point in which it’s clear we’re not going to make it. The numbers won’t add up. So what’s the best thing to do? Fix the numbers. That’s it. If you know that things happened, and what you initially thought is no longer relevant, the KPI numbers are not sacred. They are just means to an end. Align the numbers to your new reality and keep your troops with you.
So what should we do when we win? First of all, you’re awesome, and you should celebrate your success. But how should you do it? I would suggest using the 3 tier meeting model we’ve discussed earlier to make an issue out of it! Make sure to give credit to your people, not just the KPI owners but the ones who actually do the day-to-day work and help us win as an organization. Some good ideas can be a mutual toast, a gift card and even a night out to celebrate outside of work.
So there you have it, KPIs: The why, how and what to do with them. I know you now have the tools and I hope you are able to use them within your company. I would love to get feedback and questions about this post.