Transform Managers Into Leaders
With These 3 KPIs

Bringing company-wide daily discipline to your KPI Management Program from the ground-up

• 08.02.2023

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;

"Only 3 things happen in organisations: friction, confusion & under performance. Everything else requires leadership"

Keeping this in mind, in this article we share with you 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.

Furthermore, after having used this methodology for more than 4 years every day across our company and teaching our clients to do the same, we confirm that following this road map will save your business massive amounts of time, money and mental energy when managing expectations across all your stakeholders.

For those of you wondering if your KPI program is as efficient as it could be, this article is for you serving as a kick-start road map allowing you to actively engage your team leaders in building and maintaining your KPI portfolio from the ground-up for just a few minutes of effort per day.

Start Simple

Although every company's portfolio of metrics should be well thought out, support your executive strategy and have a strong relational logic between the underlying lead and lags KPIs, we believe the motor of your KPI machine should be fuelled daily by those doing the work; your process owners!

In other words, if Senior Management is still having difficulty cascading strategy and developing a sustainable KPI management reporting discipline across the company, it should not stop your team leaders from leveraging the magic of KPI management to make their lives easier and 'manage up' on a daily/weekly basis.

With this in mind, there are 3 key areas every team leader should address prior to closing their shift. The procedure should not take more than 15 minutes on average and give insight into the following 3 areas:

• 1.How their client (internal & external) received their output
• 2.How smooth the process was during the delivery (aka what variation brought unexpected bottlenecks to their work day)
• 3.How much time was dedicated enhancing company value and where time was lost in unexpected bottlenecks/variation

In short, what we are about to explore is relationship management and the importance of measuring the efficiency in every touch point that a team is responsible to maintain. This includes relationships with staff members, clients and vendors. The first two are very simple and reported in binary format as either pass or fail. The third involves reflection to understand in which areas of business time was dedicated throughout the course of the day. Managing this may take a few minutes to confirm but is a fundamental task that every team leader and process owner should perform prior to closing their workday and pays enourmous dividends when looking back to perform regression analysis.

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. Stated simply, this KPI is the first indication of your customer's level of satisfaction and in cases of under performance, if this log is kept well, you will be in a good position to begin approaching problems in a constructive way with your 'customer' whether internal or external.

For those working in areas of Customer Service, this KPI is most likely managed by your ERP to a super level of detail with a wide variety of reports available. For the rest of the company however, most cross-departmental complaints if not officially logged as an issue are less documented and often more subtle. It is here where you have the opportunity to formalise the capture and analysis of any inbound feedback, observations or straight-out complaints that arrive verbally or electronically from the colleagues you are serving. In doing so, you will be in a better position to improve your processes and the relationships that support them.

Each team should put together a list of the most common complaint categories so that if a complaint comes in you can quickly identify;

• 1.When & who the complaint came from
• 2.The complaint type
• 3.Details & notes explaining as much of the event as possible

Once you have your complaint types agreed, use a bar chart together with a Pareto chart to review and report monthly complaint totals by type in your team meetings with the plan to eventually take the discussion to your 'client'.

Addressing this on a routine basis will allow you to be more proactive to prepare for difficult discussions with those you serve and demonstrate that you have their best interests at the top of your agenda.

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 even staff members where our relationships need to be improved. Unlike the first KPI (Complaints) 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's intervention in managing your relationships 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 and be your entry point to flag issues whose root causes are still mysterious, lack clarity and logic.

Excessive confusion resulting in on-the-job disputes are captured here and later reviewed with the intention to determine what part of the business process needs to be improved or in cases of personality clashes, opens the discussion with management to be more proactive in conflict resolution areas.

This KPI is very efficient in identifying the frequency in missed or postponed commitments and puts your team in a good position to justify how lack of attention to planning and details is costing your team time and energy. As the expression goes; 'the squeaky wheel gets the oil'. When reported correctly, information of such is a stepping stone to approach conflict and less-than-pleasant situations that very often are invisible to Senior Management.

For each business relationship a team leader manages, an individual KPI should be created which identifies:

• 1.The day in which an 'incident' was reported
• 2.Incident type
• 3.Details & notes of incident occurrence

Using a bar chart to show frequency & volume together with a Pareto chart to show root causes, this simple but powerful piece of information will help you drive root cause analysis discussions with your team while being more objective when engaging your business partners to improve your hand offs.

There are many examples of how this KPI has made our company stronger and forced our collaborators to be more observant and appreciative of our efforts.

Of the most common pain points managed with this KPI include being able to highlight to clients, vendors and sometimes staff:

• 1.Projects agreed that were later canceled
• 2.Meetings postponed or canceled
• 3.Product downtime for unplanned issues
• 1.On-the-job disagreements leading to heated debate often resulting from poor planning
• 2.Excessive time required for assistance resulting from poor planning
• 3.Excessive time chasing & following-up
• 3.Excessive confusion from lost concentration (e.g. showing up late to meetings, checking mobile phones in key moments, lack of being present, etc.)

** NOTE the common theme in the majority of the root causes identified for incidents reported is poor planning and lack of clarity with roles & responsibilities

3. Hours dedicated to creating value, hours dedicated to issues

Out of the three crucial KPIs in relationship management, this one is the one which usually takes the most daily effort in that it is not binary like the prior two (e.g. pass/fail). Instead, this KPI requires that the KPI owner takes a moment to reflect each day to acknowledge how much time was spent on each activity performed. In doing so, the team leader calculates in which areas his resources were dedicated attaching figures of the time elapsed, something that will become increasingly difficult if not impossible the longer he waits.

In capturing this daily, the company will be paid great dividends in moments of contract negotiation and resource management as most vendors have annual price increases and are not always aware of where their pitfalls have cost you extra time.

Also staff are likely to claim extra overtime and less likely to report absences when not monitored properly.

Some KPIs in this category that allow us to better manage our staff, vendors and clients include:

• 1.Product downtime
• 2.Hours spent working on a project
• 3.Hours spent in meetings with a particular client or vendor
• 1.Unbilled hours working on client/vendor projects
• 2.Hours spent resolving a chronic issue or fixing product bugs
• 3.Hours worked by staff (particularly important for salaried personnel who expect annual salary increases)

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, the truth is that once a daily discipline is established the effort becomes minimal and an enjoyable way for each process owner capture, review and reflect on the day's activity. The time spent completing this exercise which usually doesn't supersede 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 3 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.