Key Performance Indicators(KPI's), leading, and lagging indicators

arboraesthetics

arboraesthetics

Location
Omaha, NE
We've started tracking KPI's (key performance indicators) the last few months: how long it takes to leave the shop in the morning, number of jobs we need to go back to, number of accidents and near misses, number of work days and number of days worked, lost and forgotten equipment, damaged equipment, etc. We usually track these monthly.

We also set monthly revenue goals, track our progress weekly and share these numbers with the crew. It seems to help them stay motivated, focused and gives them a sense of accomplishment.

I was advised to measure what you want to change.

What KPI's, leading and lagging indicators do you guys track?
 
When I was an employee, I liked doing the work and getting more done than expected. Not to mention things I would do to advance the company.
I never thought to do it for some type of gain. I guess I was just letting my actions speak for themselves. Although I never thought about it.
Am I the only one who feels/felt that way?


Sent from my little tree world....
 
arboraesthetics said:
We've started tracking KPI's (key performance indicators) the last few months: how long it takes to leave the shop in the morning, number of jobs we need to go back to, number of accidents and near misses, number of work days and number of days worked, lost and forgotten equipment, damaged equipment, etc. We usually track these monthly.

We also set monthly revenue goals, track our progress weekly and share these numbers with the crew. It seems to help them stay motivated, focused and gives them a sense of accomplishment.

I was advised to measure what you want to change.

What KPI's, leading and lagging indicators do you guys track?
Click to expand...

For operational staff KISS is key:
- near misses
- property damages accidents
- injuries (first aid vs. medical attention vs. Time lost)
- call backs (professional conduct related vs. sales related)
- time on task (I.e.: applied vs unapplied hours ratio)

That should be enough to help accountability for professional behavior, productivity and conduct.
 
arborcareman said:
What benefit is it for the crew?
Click to expand...

We have an open books policy with our crew. They understand that the company making money is good for them: better equipment, better pay, more benefits, new facilities, etc... We cannot offer them more if we do not have it to give. Additionally, we sometimes offer a bonus for reaching our monthly revenue/profit goals. In early December we gave them a profit and revenue goal. Each had a $100 bonus attached to it. We reached the profit goal so everyone will get $100. We will not make our revenue goal, but we got really close and we kicked butt all though the month of December. They stayed focused and pushed hard through what is normally a crappy and demoralizing month.
 
I'm currently working on a customer and employee survey that will reflect satisfaction and ability to meet work toward our core values.

Also, I'm creating an employee review that is more of a strength finder and an area for targeted training.

Data is so important to see opportunities for change and growth - if a business or organization doesn't adapt, it won't be ready to adapt to crisis or calamity



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I send all my bills by email, anyone know of a way I could attach some sort of cistomer survey ? Or maybe a link to an online survey ?
 
Or Google forms has a good ongoing survey function.
Tracking KPI's is great, but it has to be done right. I've worked for a company that did it right and one that did it horribly wrong.
Arboraesthetics has it right IMHO. he is looking at what he wants to change (negatives normally) and goal related KPI's which can be seen in a much more positive light.
If you always are looking at what your employees are doing wrong accidents, damage, tardiness ect. you will have a crew trying so hard to avoid those catagories that the avoiding trying new techniques, skills and ideas that could forward the company because they may be considered "wasting time" ect.
I've been in both types, the positives are a way better environment to work in.
 
arboraesthetics said:
We have an open books policy with our crew. They understand that the company making money is good for them: better equipment, better pay, more benefits, new facilities, etc... We cannot offer them more if we do not have it to give. Additionally, we sometimes offer a bonus for reaching our monthly revenue/profit goals. In early December we gave them a profit and revenue goal. Each had a $100 bonus attached to it. We reached the profit goal so everyone will get $100. We will not make our revenue goal, but we got really close and we kicked butt all though the month of December. They stayed focused and pushed hard through what is normally a crappy and demoralizing month.
Click to expand...

Jeff- great discussion! I am working on something similar. You my want to look at giving a percentage of overage billed. So if in a month a crew bills more revenue than their allotted man hours the get say 30% of the overage. I would tie in safety performance and customer satisfaction into that. If there is a reportable accident they lose bonus for whole quarter. If the have a call back, the time to fix it goes against their allotted hours. You can probably eleminate some of the other things you are measuring because if they want to get the bonus they will get out of the shop faster. Just my thoughts. Good luck!
 
So in my previous profession, we tied KPI's, employee reviews, meeting agendas, trainings, advertising & marketing, customer surveys, and all business decisions to our agency's core values.

This made all our planning and data collection decision so much easier.

Here are my current core values that help keep me focused:

Safety, Quality, Integrity, sustainability, Customers & Community for Life


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This is great. With the right presentation to employees it will help them understand how all these things tie into the company's success and ability to reward their employees. However, as mentioned already, it can be done horribly wrong and only undermine the relationship between the company and the employee. In a previous career I worked for a company that had 11 KPI's for its employees. There were specific targets required to be met however, what often happened was employees felt under pressure to meet these targets without any feedback on how to improve in these areas. Be sure, there is training or systems that will aid in improving performance.

Another aspect is the "do as I say, not as I do" approach. The company itself needs to adhere to the KPIs. That same company I as at measured customer service performance yet would itself, through tacit policies, fail in this area taking the stance that, "we don't do this well so, we don't do it at all." You can be sure that none of the employees could use that line of logic to justify underperformance!
 
That's they key to a good core value and vision: it answers - what are are we measuring; why; what do we train toward; what is performance; etc.

If there is a hierarchy - it helps management align their actions.

Also, it greatly helps build my interview questions. That way I'm hiring the right people.

There was another management tool that I felt really helped coach and guide mid to large organizations called "Strength-Based Leadership"

In a nutshell, everyone has strengths, but often people's strengths don't align with the position, role, team, or organization. Instead of looking at the negative and fix the broken, the goal is to put people where they'll be successful, intrinsically motivated, and complementary. It prevents putting square pegs in round holes, and looks at team dynamics more as a jigsaw puzzle. The survey by Gallup and the authors is a great post interview tool to find people who have certain qualities.

Here is a link to an article about the leadership method:

http://www.forbes.com/sites/ekaterinawalter/2013/08/27/four-essentials-of-strength-based-leadership/


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I just read the book 'The Sin of Wages'. It gives a fresh outlook on the whole employee pay system, and points out the strengths and weaknesses of the different systems - hourly wage, salary, piece-rate, and stock options. It promotes a pay for profit system, which you pay your employees 15% below market value (Labor market), and then measure their performance and give them bonuses each month based on their score, up to 15% above labor market. It is also tied to company profits, so in slow months it is not costing the company. It sounds confusing, but I really like the concept. It takes some of the risk out of the business with a lower base payroll, and gives the employees incentive to perform.
They tested this on a number of different types of businesses, and found that the employees did the best when their performance was tracked and they received a monthly report to measure against.
 
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