I am no gardener. I have a long list of failed attempts at growing any type of plant.
I remember one particularily funny gardening flub of mine. It started with me attempting to grow bell peppers. I have always liked the idea of growing the food I would eat, so peppers seemed to make sense at the time. I did enough research. I learned I could grow bell peppers in my climate and I knew I needed sun, water, healthy soil. So, I drove to the store, picked out one of those ready to go planters with a bell pepper plant already sprouting. This was the best chance I had at growing these peppers.
Well, weeks went by and I did indeed grow this little plant. It filled the pot and developed little tiny bud peppers. I was thrilled. I was so excited watching these little peppers grow, as I imagined all the salads I would make with them. Then, the peppers stopped growing. And they didn't start back up. Did I water them too much? Did they get too much sun? I didn't know.
One day my Aunt came for a visit. I showed her my bell pepper plant, mostly as a joke because it's well known that I suck at gardening. All she said was, "Jamie. That's not a bell pepper plant It's a jalapeno plant, and it's ready to be picked."
I had a goal. I nurtured that goal. And in the end, I didn't really get the result I was looking for. Sound familiar?
Perhaps you have unintentionally grown a jalapeno in your company, when you meant to grow a bell pepper?
This can happen when we are not certain which Key Performance Indicators drive our company.
Let's look at this another way. Let's assume a well meaning Service Provider may have heard in the company staff meeting that higher revenues are needed to meet this quarters goal. Maybe there was even an incentive mentioned for those who help in attaining this goal. That well meaning staff member goes out committed to closing the revenue gap. They sell $1000 in retail that day, when normally they only sell $250. Management is thrilled with that day's numbers. High fives are given all around.
3 months pass by and though the team is still fighting for those elevated retail numbers, productivity has started to fall and the retail numbers can now no longer make up for the declining service sales.
Upon further investigation it looks like client retention has slipped below 50%, and the number of new clients has decreased significantly. What went wrong?
Maybe the additional focus on retail sales over prioritized at attention given to cross referals.
Maybe this well meaning staff member did not have the skills needed to make these sales in a long lasting beneficial way for their clients.
Maybe it was the Retail Sales on their own didn't lead to long term success. Maybe they were a lag number for something bigger?
Some times we lead using lag metrics. Lag metrics are the numbers that show us where we have been. Sales, Expenses, Profits - these are lag metrics. They are the result of our decision making. On the other hand we have lead metrics. Lead metrics show us where we are going. The are our decisions.
The problem I see many business owners face in the misunderstanding of lead metrics and their value. Lead metrics often do not have immediate gratification. They are not about a big pay day today. Instead, they are about a bigger payday tomorrow. Not just a bigger payday, but a sustainable and progressive payday.
The best part yet. Lead Metrics are often focused on the client and team; as, we know that healthy teams create healthy clientelle's and that establishes the foundation for a healthy business.
Is it time to analyze your company's Key Performance Indicators?
Are your top line revenues growing, but profits are not?
Does it feel like when you spin one metaphoric plate, all the other plates fall down?
Does it feel like you can't get momentum with your goals?
Are your goals leading to individual or team burn out?
Are your goals dividing your team, instead of uniting them?
If you have answered yes to any of these questions, it's time to do a health assessment of your KPIs. Give me a call, I am here to help.
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