During difficult economic times, drugs executives tend to obsess over key performance indicators and profitability to keep their companies humming. And rightly so.
However, salve in many cases, look company performance dashboards can give you a false sense of security. If you think they are the ultimate source of predicting customer loyalty and growth, you will be disappointed—and your dashboard will break.
Just ask Paul Spiegelman, CEO of The Beryl Companies in Dallas, Texas. Beryl provides award- winning outsourced call center services to over 500 hospitals across the United States. Currently they have 350 employees.
Five years ago, Paul’s company hit a growth plateau. He did not recognize this because of a change in the company’s financial measures; rather, he noticed it because of changes in employee behavior. Departments began operating like silos. People did not appreciate each other.
Paul realized his company needed better ways to measure success. They implemented the Balanced Scorecard™ tool, and immediately experienced improvements. Says Spiegelman:
“The one page dashboard helps bring me up to speed very quickly on what’s happening in the business. Furthermore, my teams have a much greater understanding of how their activity rolls up into the departmental and company-wide values and vision. As a result, our profitability has continued to outpace our revenue growth for the past four years. It’s just as important to look closely at my company’s cultural thermometer. There is an absolute correlation between my people’s mood and our financial metrics.”
Anticipating major mood shifts—and correcting swiftly—is a sign of a true leader.
Here are 10 steps to help you select the right success measures and fix your dashboard:
1. Honestly determine what phase of growth your company is experiencing: Startup, Growth, Advanced Growth, Plateau, or Decline.
2. Develop a list of success measures that apply to your business in this growth phase. For example, returning to profitability is essential if you have been living in Growth mode for awhile. Not so important if you are two months into Startup mode.
3. Shorten that list to 10 to 15 meaningful success measures. Brainstorm with your strategic partners and employees to develop a comprehensive list.
4. Validate your final list of success measures with your executive team, accountant, CPA, and sales teams. Be sure the list contains eight or fewer measures. You will not have the time—nor the energy—to track more than eight.
5. Determine a method to track those measures. You will find options from www.ceotools.com and the Balanced Scorecard™ Institute (www.balancedscorecard.org). (Over one hundred companies sell software tools that are based on the Balanced Scorecard™ performance management methodology.) Post a question on Google Answers or LinkedIn to find out what companies similar in size or location are using.
6. Assign owners who will report progress against those measures on a regular basis. Owners may include your bookkeeper, VP of sales, CPA, CFO, Controller, or a combination of these people. Be sure that their performance plan and bonus are tied to this important task.
7. Set meaningful goals with your people that contribute directly to your success measures. Make sure your teams have bought into those goals. Every team member should have no more than three goals per quarter. They normally will contribute to one of your key indicators. Once you have achieved this, your team members will see more clearly how their jobs tie directly to the success of the company. Check out ThinkWise Inc. for some great tools to get you started.
8. Communicate your goals at least ten times in order to build trust. This has to be done in a credible, authentic way. Walk the four corners of the building for twenty 20 minutes per day, and tell your teams, “I value your opinion. How can we make our client experience better? How can we make our people work together more closely?” Acknowledge them when you’ve put one of their ideas into practice.
9. Regularly check your “cultural thermometer.” Maintain programs that keep people happy and energized. Find what makes them tick, and continue to find ways to help their work fulfill those aspirations and motivators.
10. Track progress publicly and in small increments. Find a way to announce your progress to your teams and close allies. For example, if you want to grow your revenues from $10 million to $12 million within one year, translate that into a visual representation that breaks down that goal into that represents two $2 million dollars over twelve 12 months. Create a visual measurement poster or dashboard where everyone can see it, and celebrate your progress by updating it monthly.
Measure what matters–and you will be much more energized.