Ask most people in Australian Organisations and they will know the term KPIs or Key Performance Indicators and yet sadly too many Managers and Leaders are not driving and coaching their people’s activity to help them achieve their KPIs.
In fact, outside of the Sales Profession, many organisations still do not have clear KPIs for Results AND Activity.
Activity Drives Results is a commonly heard principle in KONA Groups’ Sales Training and Sales Management Training, yet unfortunately Managers are still not focusing on how they can direct and influence the Quality, Direction and Quantity of their people’s activity.
In fact, to make it worse, many Managers regularly say “oh, my people don’t like to be micro managed”. Well if they are consistently 120% of target then so be it, but if your people are below target, then it is the Managers job to set, monitor and coach their people towards their KPIs.
KPIs give Managers an insight into their employee’s performance on any given day, along with their potential contributions to an organisation’s strategy and future results and just like a ship plotting a course to a destination, they need to be reviewed daily and weekly, not just at the end of the month with a ‘miss or hit target’ conversation.
3 Ways to Manage and Coach KPIS
Make them relevant
KPIs are relevant for everybody in an organisation, not just sales, and should be aligned to winning, growing and retaining customers, and especially your Key Accounts.
Therefore, what are the KPIs you have set for your Marketing Department; Call Centre team; HR; Customer Service Team; Managers; Warehouse amongst others?
Some examples by position include:
Marketing – how many leads and inquiries do your need Marketing Department generate a month into the Sales Pipeline? How many EDMs, blogs, articles, seminars, events, website hits, Linked In and Facebook contacts. do they generate a month/quarter? Cost per inquiry?
Call Centre and Customer Service – NOT AHT which treats the customer as a number, but how many times do they make outbound calls as well as receive inbound calls, increase in order value through upselling and cross selling; increase in customer retention; sales from C and D class customers.
HR – Staff retention rate; average tenure of staff; number of people they recruit on target; cost of recruitment per head (one client currently has a 40% retention rate of new people inside a year, and they don’t think that is a problem, even though it is costing the organisation a huge amount of money).
Warehouse – # of orders despatched; # of products picked; DIFOT (note DIFOT MUST be DELIVERY In Full On Time, NOT DESPATCHED In Full On Time);
Managers – # of people on target; increase in revenue & profit; # of customers; increase in customer spend from Key Account Management; # of monthly coaching sessions in their team.
Determine the path
While it is important to know where you are going, it is equally important to know how you will get there.
This is very true in business so if you want to increase your business revenue by 5% you will have to determine ACTIVITY KPIs that will drive your Sales Pipeline and allow you to achieve that goal.
This can be done by making critical data available and determining which metrics can lead or influence your main KPIs.
One of the best ways to make the array of available metrics simpler is to categorize them as either lagging or leading indicators. The former pertain to inputs which measure the level of activity necessary to achieve certain goals. These lead to results and can be a challenge to determine but they can be influenced easily enough and can be set to specific goals.
For example, if you take a monthly target of say $200,000 and divide it into 20 days that is a daily target of $10,000 a day and your people should be on target on any given day in any given month.
However, if an employee is on $70,000 by day 10 then they are behind target so how will you change their activity to make up their shortfall (Sorry team, I realise that this is basic but it is devastating how many Managers are not managing this simple business principle with their people because they see it as ‘micromanagement’.)
Or worse, they are listening to their HR department too much when they talk about ‘empowerment’.
Empowerment has to be earned and regardless of what Fair Work Australia and IR Laws says is not a God given right. Hit KPIs and earn the right to be empowered. Miss target and Managers need to step in and Manage and Coach
Determining robust KPIs
Results are an outcome, a history, of the effectiveness of your people’s Activity.
So ensure that for every financial results there are Activity KPIS to drive the results.
Determining then Coaching KPIs your team and organisation can count on should be your main concern when thinking of strategies that can help it grow. Once you do, you need to determine ways you can use them to maximize their potential and to ensure your business proceeds in directions that can ensure the revenue streams you need. Use them to monitor progress, set up alerts where needed and communicate the importance of reaching each goal you set.
But whatever you do, do NOT leave KPI management to the end of the month or quarter as by then it is too late.
The KONA Group is Australia’s Leading Sales and Sales Management Training and Coaching company and provide customised training programs that include: HR Consulting; Sales Training & Coaching, Key Account Management Training, Call Centre Training & coaching, Negotiation Skills Training & Coaching, Motivational Speakers, and more.
So if you are looking to increase the effectiveness and results of your sales team, contact KONA today on 1300 611 288 or email: firstname.lastname@example.org to discuss how we can help you to improve your organisation’s results.
In addition, if you want to receive a FREE Capability Assessment for your organisation, email Glenn today on Glenn@KONA.com.au.