Rob Nelson is the CEO of Grow, a simple dashboard for accessing business data and visualizing it on a real-time scoreboard.
To me, company culture is about fostering a transparent company vision and building motivation in each employee to work towards that goal. Teamwork is impossible without that strategic vision, and the key indicators that guide it. When employees buy into the company vision, they use the key metrics as a checkpoint to see if they are on track.
Running a business based on metrics is different than just simply trusting your gut. Numbers don't lie. Metrics gave me the key information to propel my last company, Logica, toward our high-growth phase, and we were ultimately acquired because of our growth. I attribute it all to the metrics.
As I saw so much success with metrics in my last company, I thought that every business should have a system to track and clearly display key metrics. This realization led me to found my current company, Grow, a KPI dashboard solution for SMBs.
Regardless of what tools you use to track KPIs internally, here are four specific areas of change we saw as we measured KPIs at my last company -- and how you can use them in your own business.
Before we tracked our progress with metrics, we were just "heads down" working as hard as we could. It felt like we didn't know where we were going. We decided to take a step back and ask ourselves what was going to drive the company forward. We wrote out our goals, defined our metrics and put the KPIs up on our dashboard. We started to see major changes.
One great way to get this process started in your company is to think about which metrics are most important to your bottom line. You want all your best players -- your executive team -- to be involved in this conversation. If you can narrow it down to a few key metrics, that's a great place to start. Ask your team, which metric is most critical for us to reach X amount of revenue? Which area of our company is holding us back, and is there a metric that could transform that department?
When you have a few key metrics selected, whether those are sales revenue, expenses, or customer acquisition costs, make sure you update your team on the progress of those metrics daily. If a KPI becomes stagnant or drops, the team knows they need to get in gear and get the company back on track. Focusing on your key metrics provides clear direction, even when there are market fluctuations.
After we established what we were going to track, we held each other accountable. Employees felt ownership too because they knew they would be reporting on their metrics to the team in our weekly meetings. Reviewing the progress of KPIs in our weekly team meetings helped us to evaluate our successes, and it was at this key point that we started to see tremendous growth. Everyone performed at a higher level because they felt personal responsibility for a specific metric.
KPIs are also a great way to assess the productivity and performance of a team. When a team is resistant to measuring and reporting on metrics, it may be time for a new manager or a reshuffle. Employees who don't buy into metrics are not fully invested in the company vision. You want to give your employees realistic KPI goals or provide challenges and encourage improvement.
3. Transparency and Teamwork
Reviewing metrics in our weekly meetings removed any kind of employee or manager bias. It fostered healthy competition and forced employees to buckle down and improve their metrics before the next team meeting, and feedback became more collaborative and discussion-based. The entire team could see the progress from week to week and contribute ideas on how to improve certain key indicators.
Better yet, the people who executed really well rose to the top: our employees got the recognition they deserved and they loved it.
When everyone can see the score and monitor what is happening, people naturally step up. Attitudes and team behavior respond to "scores" that everyone can see. In fact, I got the idea for building Grow and our publicly displayed, real-time company dashboard from a basketball scoreboard -- I thought, if the scoreboard in a basketball game can get the players focused, why not try it at work?
When you have common goals, it's suddenly no longer about the job or the business. It's instead about the progression, the improvement and the growth--and making that happen as a team.
Like any scrappy entrepreneur, I tend to go after any "shiny" new idea. I find that a dashboard of key performance indicators provides a lot of focus for me. If it's not on my dashboard, I don't focus on it. The dashboard is, in effect, my filter: I use it as a guide on how to spend my time and energy. Good leaders are not afraid to pass on ownership, and through this method I can be a better leader when everyone on my team is focused on key metrics.
People want to feel like they are contributing to something great and making a difference. If you don't keep track of the score, you and your team won't know to what extent you are progressing. Focusing on metrics will guide you and your team toward your company goals and enhance your ability to solve problems as a team, all while having more fun in the process.