June 2, 2009

Measuring Success, KPI’s, and Company Vision – The Zappos Way

How does your company hold a strong vision and track progress amidst today’s economic hailstorm?

In my work with high performing companies, we find that they create two categories of indicators: “Leading indicators” and “trailing indicators.”  In companies such as Zappos and The Beryl Companies, it is not uncommon for the CFO and CEO to maintain slightly different success “dashboards.”  For example, the CFO is often responsible for tracking the more traditional trailing indicators  (such as gross margins, EBITDA, client retention rates, and average client spend);  whereas the CEO sees herself as the keeper of the culture.  In these instances, the CEO tracks specific changes in employee behavior, shift in client moods, and volume of unsolicited referrals.

Zappos CEO Tony Hsieh shares examples of how he assesses their progress and cultural health against their stated objectives in this 2 1/2 minute video.  He also shares what he wants Zappos to look like in three years.

Video: Measuring Zappos’ success, cultural strength, and future growth opportunities

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