Learning objectives
How to lead a business with only 6 figures
Importance
Measure and control quarterly only six figures at your level
Engage only action plans that have been proved to improve those six figures
Delegate the management of those action plans to well identifyed, accountable collaborators
Survey
Can you quote people leading with only a few key numbers in sight
What are the favorite 6 key performance indicators in 2010 ?
Non-financial, balanced, operational, people motivator, causal, driving factors for results
Questions
Setting your organization to fit the strategy. Here are the six basic steps to link operations and strategy. And the questions
Step 1. Get shareholders objectives at the strategic and operational levels. Give the indicators most frequently requested by shareholders from executives
Step 2. Get environmental/competitor and internal/past (regulation/technology) constraints: customer trends and socio-cultural development, economic situation, regulations. Give the indicators most frequently used to monitor these constraints
Step 3. Set the strategy. Give the indicators most frequently used to monitor these different strategies
• Competitor positioning: imitation, cooperation, dominance or differentiation.
• Fight on price or on product.
• Reach core market or niche.
• Development: growth, stabilization or contraction.
• Market: Grow market share or search for new markets for existing products or introduce new products to existing customers or bring new products to new customers.
• Autonomy: own resources or cooperation or acquisition
Step 4. Decide on project / initiative to match the strategy. Give the indicators most frequently used to monitor these initiatives
• Set measurable objectives.
• Set production plan, sales forecast.
• Set rolling budget or scorecard.
• Change current organization and structure to fit the strategy.
Step 5. Execute the project and the processes at the operational level. Reorganize R&D, sales, procurement, production, shipping and customer service. Measure processes off good practices. Give the indicators most frequently used to monitor these processes
Step 6. Measure performance using KPIs and scorecards. How do managers organize performance measurement data collection ? List frequently used software. List frequently used motivational techniques to convince people to collect data and feed the system
Strategy. The six figures business boosters. Why executives look at those 6 KPIs to assess the growth potential of a business ? Sales From New. Time Facing Customer. Gain From Processing. Return on Critical Resources. Key Project Status. People Responsibility Level
Clues for answering
Article to download and read
The six figures that boost a business
The six figures business boosters
The « TFC » figure Time Facing Customers
The « SFN » figure Sales From New
The « RCR» figure Return on Critical Resources
The « KPS » figure Key Project Status
The « GFP » figure Gains From Processing
The « PRL » figure People Responsibility Level
The « TFC » figure Improving the Time Facing Customers is key to grow a business
Why is the « TFC » figure important?
TFC trigger sales
TFC is a no-excuse, pure indicator for sales reps
TFC is easy to measure with contact management or CRM
TFC depend on
Number of people involved
Time spend per people
Size of the contact surface
Interactivity of the contact surface
How to measure your « TFC » figure?
Sales force availibility per customer / product couple
Average TFC per vendor with impact points rating
Size of the contact surface (non-human vending surface)
Interactivity of the contact surface
Bidding volume at stable win rate
Pipeline value
Help desk performance
How to improve the « TFC » figure ?
Hire vendors for low TFC markets
Measure vendors on TFC
Increase interface quality. Help desk. Web interface
Partnership sales
Use CRM and contact management software
The « SFN » figure. Improving the Sales From New is key to grow a business
SFN measure your innovation spirit
SFN measure your matching capacities with the market
SFN measure the success of your strategy
How to measure your « SFN » figure
Sales from new products
Sales from new customers
Sales from new channels
Sales from new suppliers
Sales from new technologies / productions
How to improve the « SFN » figure
R&D investment
Open innovation
Merging and acquisition
Targeted sales incentives
Investment in technologies
Partnership in new countries
The « RCR » figure. Return on Critical Resource. Why its important ?
To get more investors (internal or external) / resources for your business
To turn your managers accountable for the more resources they ask for
To invest where your gain money and desinvest where you lose money
How to measure the RCR ?
Return per customer
Cost to sell
Time to sell
Return per investment
Leads value
Sales order value
How to improve the « RCR » figure
Abandoning low margin tasks / people / contracts/…
Investing in high margin people / tasks / contracts
The « KPS » figure. The Key Project Status. Why its important ?
Select only one main major improvement project per year to focus on
Your freedom to decide may be limited. Focus on the one thing you can really change in only one year in this business, in your position
How to measure the « KPS » figure
Project on staff
Project on budget
Deliverables on specification
Net present value
Deliverables on time
How to improve the « KPS » figure
Project management quality check
Project director quality check
The « GFP » figure. Gains From Processing. Why its important ?
Processing recurrent activities decrease costs and delay at stable quality level
How to measure the « GFP » figure
Gains from subcontracting
Gains from abandoning
Productivity indexes
IT investments
Sales per employee
Quality indexes
Gains from suppliers bills
Critical delays reduction
Costs leadership
How to improve the « GFP » figure
Turning activities into processes
Supply chain process
Order to cash process
The « PRL » figures. People Responsibility Level. Why is the « PRL » important ?
Making people accountable for what they do and decide increase their satisfaction at work and their productivity
How to measure the « PRL » figure ?
% people on MBO
% compensations on MBO
Size of profit centers
ESI
People on HiPo list
Quality of staff metrics
Pure indicators accepted by managers
Job description measurability
General unit measurability
How to improve the « PRL » figure ?
Use the Management Review Committee to rate people. Promote AAA people. Outplace B people
Use Management by objectives
Turn budget into BP scoreboards
