Performance Management For Small Businesses
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Transcript of Performance Management For Small Businesses
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The Small Business
Solver Team
PERFORMANCE MANAGEMENT
FOR SMALL BUSINESSES
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“WHAT GETS MEASURED, GETS DONE.”
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Goal
CREATE PERFORMANCE
MEASURES THAT ACTUALLY HELP
YOUR BUSINESS.
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Why have metrics?
Creating your metrics
Balanced Scorecard
Monitoring
WHAT TO EXPECT?
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Are you already using them?
Importance of metrics
What do you already know?
Red flags
WHY ARE METRICS IMPORTANT?
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Do you have a sales goal?
Do you have a goal for your marketing campaign?
Do you motivate your employees with targets?
ARE YOU ALREADY DOING THIS?
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Keeps daily activities on track with strategy
Goals are motivating
Benchmarks help with trend analysis
Employee engagement
WHY ARE METRICS IMPORTANT?
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The best measures are obvious
This is easyThis can be delegatedFocus is needed Tying measures to pay is the only way to motivate
Measures always increase performance
Measures are in place to ensure staff are spending their working hours on the right activities
FACT OR FICTION?True
True
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Do you have over 100 measures?
Are measures selected by an individual?
Are there measures that have resulted in dysfunctional behaviour?
Are measures implemented without a cost analysis?
Is there cynicism about performance measures?
RED FLAGS
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Have a team to select
Measure things that matter
Select measures that measures multiple areas of the businessExample: measure profit versus only revenue or cost
TOO MANY METRICS IS HARMFUL
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How is this used already?
What do you already know?
Importance of metrics
Red flags
WRAP UP: WHY METRICS?
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KPI Definition
Human Behaviour
Strategic Alignment
Critical Success Factors
How to Create Measures
CREATING METRICS
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What’s A KPI?
MEASURES THAT FOCUS ON CRITICAL
FACTORS FOR TODAY’S AND TOMORROW’S
SUCCESS.
= KEY PERFORMANCE
INDICATOR
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Action orientedImpactfulTied to a teamKPIs are supported by management
24/7Daily / weeklyNon financially basedMotivating
A KPI MUST BE…
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Human Behaviour
Balanced & Strategic
Known Critical Success Factors
Create Measures
Monitor
.
THE PROCESS
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Lawyers are measured by the number of cases
closed
How could these metrics go wrong?
HUMAN BEHAVIOUR
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Penalties to a truck driver on being late
How could these metrics go wrong?
HUMAN BEHAVIOUR
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FinancialCustomerInnovationInternalStaff orientedEnvironment
BALANCED & STRATEGIC
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.
THE SMALL BUSINESS SCORECARD
Financial • Revenues, assets, sales, expenses, profit margin,
Customer • Customer service levels, close rates, retention rates, prospects
People • Retention, delegation, succession, recognition, training, recruitment
External Environme
nt• Awards, branding, partnerships,
public awareness, charitiesContinuous Improveme
nt• Innovation, training
Operations • Technology, processes
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‘Need to haves’ in the organization
Related to strategy
Easy to understand
Agreed upon in a team
5-8 maximum
CRITICAL SUCCESS FACTORS (CSF)
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Engagement with staffRecruiting the right
people all the timeDevelop peopleInnovate dailyGrow leadersMake decisions
slowly, implement rapidly
Always deliver on time
CSF EXAMPLES
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Find commonalities between CSF
Find a way to measure
Measure with a range
CREATE MEASURES
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EXAMPLES
Critical Success Factor Metric (KPI)
Engaged staff Staff missing training over next 2 weeks, reported daily
Grow leaders Number of recognitions in past 2 weeks
Innovation # planned for next 30 days -90 days (reported weekly)
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METRICS EXAMPLES
# of customers who ordered in XX weeksDate of last customer interaction
# of quality problems found# of new initiatives completed# of feedback survey initiatives completed# of times a caller hangs up# of times a customer is transferred
time it takes for a problem to be resolvedtime between workplace accidents# of times that a phone call isn't answereddate of next eventnumber of applications for job posting% of staff working part-time# of recognitions and awards in last 2 weeksfeedback on recruitmentlength of service by staff# of positive press releases
debtors over 30 days/90 daysnumber of overdue projects % of key work carried out by contractorslast update of each webpagenumber of invoices paid latenumber of strategic relationships
number of employeesnumber of finished projects this month% of time spent on qualitytime spent on innovationimprovement in productivityunplanned versus planned maintenancedate of next innovation to key services% of employees below age xx% of employees with IT literacynumber of training hours booked
% of managers who are women% of cross trained personnel
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KPI Definition
Human Behaviour
Strategic Alignment
Critical Success Factors
How to Create Measures
Examples
REVIEW: CREATE METRICS
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OBJECTIVES:
Implementation
Reporting
Abandonment
MONITORING
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Roll out into team performance measures
Test measures for behavioural alignment
Change or remove measures where appropriate
IMPLEMENTATION
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Use visualizationSimplification Frequency
Daily reports to team
Weekly updates to management
REPORTING
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Stop creating unread reports
Remove KPIs that aren’t reviewed or changing
Remove KPIs that are harmful, duplicated, or unnecessary
ABANDONMENT
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Implementation
Reporting
Abandonment
WRAP UP: MONITORING
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Goal
CREATE PERFORMANCE
MEASURES THAT ACTUALLY HELP
YOUR BUSINESS.
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Why have metrics?
Creating your metrics
Balanced Scorecard
Monitoring
WHAT WE COVERED
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“WHAT GETS MEASURED, GETS DONE.”
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Parmenter, David. Key Performance Indicators for Government and Non Profit Agencies. Wiley, 2012.
Welch, Jack and Suzy. Winning. HarperBusiness, 2005.Kaplan, Robert and David Norton. The Balanced
Scorecard: Translating Strategy into Action. Harvard Business Press, 1996.
Kaplan, Robert and David Norton. Strategy Maps: Converting Intangible Assets into Tangible Outcomes. Harvard Business Press, 2004.
Spitzer, Dean. Transforming Performance Measurement: Rethinking the Way We Measure and Drive Organizational Success. Amacom, 2007.
Collins, Jim and Jerry Porras. Built to Last. HarperBusiness, 1994.
RESOURCES
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The Small Business
Solver Team
PERFORMANCE MANAGEMENT
FOR SMALL BUSINESSES