KPIs & Scorecards Presentation
December 17, 2024
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For Reference
Scaling Up - How a Few Companies Make It…and Why the Rest Don't by Verne Harnish
The ONE Thing - The Surprisingly Simple Truth Behind Extraordinary Results by Gary W. Keller and Jay Papasan
Fundamental Questions
What do you care about?
What does success look like?
EOA Workbook Sheet
Overview
What are KPIs?
Key Performance Indicators (KPIs) are quantifiable metrics that measure an organization's progress toward its goals. KPIs can be used to track the performance of a team, individual, or the organization as a whole. They can be set at the organizational level and then broken down by team, business unit, or individual.
What are KPI Scorecards?
A KPI scorecard is a performance management tool that helps businesses track and improve their performance by aligning their activities with their strategic objectives.
Types of KPIs
Functional Unit KPIs
Which measure critical performance functions in an area such as IT or finance.
Leading KPIs
Which project future outcomes based on available data.
Conversion Rate
The percentage of qualified leads that become customers.
Lagging KPIs
Which provide data about events that have already occurred.
Sales
Last quarter's sales are a lagging indicator because they measure the results of efforts made in the past.
Operational KPIs
Such as cost per acquisition, transit costs per month or sales by store, which measure short-term performance.
Strategic KPIs
Ssuch as market share, revenue and return on investment, which track progress toward big-picture goals.
Measurement
Why measure?
What gets measured, gets managed.
KPIs provide insight into whether the company is on track with its strategic goals.
KPIs and Scorecards
Create focus and alignment.
Improve decision-making and accountability.
Drive execution efficiency.
HELP YOU REACH YOUR GOALS!
Key Frameworks in Scaling Up
4 Decisions to Scale
People
Strategy
Execution
Cash
Execution Focus
Priorities: What needs to be done?
Data: What do the numbers say?
Rhythm: How often do you check?
Execution and the Role of KPIs
KPIs and what they really mean
Objective metrics tied to company goals.
THEY ARE SIMPLY THE MOST IMPORTANT METRICS.
Execution Data Points
Quantitative: Hard numbers (sales, revenue, cycle time).
Qualitative: Feedback (customer and employee input).
Meeting Rhythm: Daily, weekly, monthly, quarterly, annually to review KPIs.
Example KPIs for Growth
Financial KPIs
Revenue Growth
Profit Margin
Cash Conversion Cycle
Operational KPIs
Process Time Efficiency PACe Framework
Net Promoter Score NPS
Order Accuracy
People KPIs
Employee Satisfaction/Engagement
Turnover Rate
Productivity Per Employee
KPI Development
Breakdown
Identify problem to be solved or opportunity to leverage.
Set outcome to be achieved and action to be taken.
Chart the process to execute.
Select leading and lagging KPls to measure progress.
Set accountability to measure and report.
Scorecards – Monitoring The Results
What is a Scorecard?
Simple tool to track KPI`s Teams or Individuals.
Characteristics of Effective Scorecard
2-3 Key Metrics per Functions and/or Role.
Results oriented Responsibilities: CLEAR OWNERS.
Review on Regular Basis Weekly rhythm.
PACe – Process Accountability Chart
Purpose
Track and measure cross-functional processes.
Steps to Create a PACe Chart
Define 4-9 Core Processes (e.g., Order Fulfillment).
Assign Accountability for Each Process.
Identify 2-3 KPIs per Process (e.g., Lead Time, Defect Rate).
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EOA Process Accountability Chart (PACe)
Scorecard Implementation
Step 1: Select a Few Meaningful KPIs.
Step 2: Define Targets and Timelines.
Step 3: Align Teams to Track Metrics.
Step 4: Integrate Scorecards into Meeting Rhythms.
Step 5: Adjust Based on Data and Feedback.