Is your windshield covered in mud?
Consider what would happen if your car’s windshield is completely covered in mud and you have to drive the route ONLY by using your rear-view mirror.
Is your business like that?
When thinking about the most important numbers to measure in your business, most of our clients have no trouble coming up with a list of results they want to achieve.
They usually include Revenue, Profit, EBDITA, # of customers, employees, locations, etc.
These Result Indicator KPIs are important – you need to set targets you want to achieve in your business.
But, don’t stop there.
For your key performance indicators to truly help you solve business problems and reach your goals, you also need to spend time developing Leading Indicator KPIs.
What are Leading Indicator KPIs?
Leading Indicators can help predict what will happen in the future.
They let you know if you are on track to achieve the results you want.
Leading Indicators are measurable, and you have the ability to influence or move them.
Set and track Leading Indicator KPIs and make adjustments based on those indicators every week. You will then have an advantage over your competition.
CEOs should have KPIs on their dashboard to gauge the health and vitality of their companies as well as measure progress made toward goals.
CEOs need easy access to a few key performance indicators to track how healthy the business is at a given point in time.
It’s imperative to identify a handful of metrics that the CEO needs to see daily or weekly.
These metrics should tell a quick story and give insight into both external and internal trends.
This blog provides KPI Examples for your leadership team.
Which KPIs belong on the CEO’s KPI dashboard?
Business leaders need to keep up-to-date so they can make adjustments to their priorities. Here are some examples of KPIs a CEO should be watching:
CEO/Owner
- “A” Players on the Leadership Team (Goal: have at least 75% of the Leadership Team consist of “A” players)
- Net Cash Flow %
- Return on Investment (or Assets) %
- Brand Promise Delivery
- Net Promoter Score
- Repeat Customers % (Goal: at least 95% of existing customers
become repeat buyers)
- Leadership Team Development Plans: 100% complete
- Profitability
- EBITDA (Analysis formula that stands for ‘earnings before interest, taxes, depreciation and amortization’)
- Market Share
Marketing Leader
- Leads Generated: Number per month
- Cost per Lead
- Brand Awareness: Percent
- Promotion Effectiveness: ROI + %
- Trade Show: ROI + %
- New Customer Acquisition
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- Marketing Team Development Plans (Goal: 100% complete)
Sales Leader
- Sales Pipeline Value: Conversion %
- Leads Converted: Number per month
- Percent of Revenue goal
- Year-to-Year Revenue Growth (new and existing clients)
- Sales Efficiency Ratio: $? /$1.00
- Market Share Growth + percent
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- Sales Team Development Plans (Goal: 100% complete)
Operations Leader
- Gross margin %
- “A” Players Retained %
- Internal Hires for Open Positions %
- Customer Visits per Quarter
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- Operations Team Development Plans (Goal: 100% complete)
Financial Leader
- Return on Invested Dollars %
- Accurate Budget Forecasts ± 2.5 %
- Accounts Receivable Days < 30
- Cash-in-hand for operations
- Level of Debt as % of Total Assets
- Financial Literacy of Leadership Team (Goal: 100 percent.)
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- Financial Team Development Plans (Goal: 100% complete)
Human Resources Leader
- Regrettable Turnover (the percentage of people who leave the organisation that you didn’t want to lose) < 1%
- Open Positions < 5 percent
- Absence time, Engagement level
- Management Efficiency Ratio (how many contribution-margin dollars are generated for every dollar of the management team’s salary): $10.00/$1.00
- Employee Net Promoter Score (NPS)
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- HR Team Development Plans (Goal: 100% complete)
Manufacturing Team Leader
- Gross / Contribution Margin: (Goal: 58% / 42%)
- Labour Efficiency Ratio (how many gross-margin dollars are generated for every dollar of direct-labour salary): $? / $1.00
- Machine Utilisation Rate %
- Days Lost Due to Injury (Goal: 0 days)
- Quality / Bugs
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- Manufacturing Team Development Plans (Goal: 100% complete)
Legal Leader
- Corporate Legal Compliance (Goal: 100%)
- Legal Budget Management ± 5 percent
- Litigation Win Rate: ? %
- Employee Policy Signatures/Communication (Goal: 100%)
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- Legal Team Development Plans (Goal: 100% complete)
Innovation Leader
- Products Developed on Time: ± 1 week
- Products Developed on Budget: ± 2.5 percent
- First Year New Product Market Share (Goal: 20 percent)
- Accurate Product Market Forecasts: ± 5 percent
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- Innovation Team Development Plans (Goal: 100% complete)
Purchasing/Supply Chain Leader
- Reduction in Cost of Goods Sold (Goal: 5%)
- Days Lost Due to Product Shortage (Goal: 0 days)
- Supplier Mistakes
- Supplier Quality Ratings (Goal: +90%)
- Material Quality Specifications (Goal: 100%)
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- Purchasing/Supply Team Development Plans (Goal: 100% complete)
Quality Assurance Leader
- QA Standards Compliance (Goal: 100%)
- OSHA Compliance (Goal: 100%)
- Product Defect Rate (Goal: ± 2 percent)
- Environmental Compliance (Goal: 100 %)
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players.)
- Quality Assurance Team Development Plans (Goal: 100% complete)
Talent Development/Training Leader
- New Employees Trained: Per Quarter
- Current Employees Trained: Per Quarter
- # Hours per Month of Learning per Employee
- Training Capacity Used (Goal: +90%)
- Employee turnover: %
- Employee & Customer NPS
- Training Net Promoter Score (Goal: 75+)
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players.)
- Training Team Development Plans (Goal: 100% complete)
Customer Service (Advocacy) Leader
- Customer NPS
- Customer Retention (Goal: 95 percent – low churn)
- Customer Issues Resolved on Phone (Goal: 75%)
- Top 5 Issues Occurrence Reduction (Goal: 10% each)
- Operations Training for Key Issues (Goal: 100%)
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players.)
- Customer Service Development Plans (Goal: 100% complete)
Engineering Leader
- Product Designs on Time: ± 1 week
- Product Designs on Budget: ± 2.5 percent
- Engineering Net Promoter Score (Goal: 75)
- Energy Consumption Reduction (Goal: 5%)
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players.
- Engineering Team Development Plans (Goal: 100% complete)
IT Leader
- System Uptime: %
- Reduction in IT/IS Costs: %
- IT/IS Net Promoter Score
- Issue Resolution Time: # hours
- “A” Players on the Team (Goal: have at least 75% of the Team consist of “A” players)
- IT/IS Team Development Plans (Goal: 100% complete)
I would like to acknowledge 2 key sources for this blog:
- Rhythm Systems – 5 Reasons Why You Need KPI’s
- Dave Baney’s book: The 3×5 Coach: A Practical Guide to Coaching Your Team for Greater Results and Happier People
Interested in hearing more? Or would you like to do a Free Discovery Meeting to discuss/examine KPI Examples for your leadership team? If so, please email us at jonathan@scaleupgrowth.co or call +61 (0) 408 748 980.
I hope you have enjoyed these insights. Have a great week and stay growth-focused!
Cheers,
Jonathan
