Admit it! You don’t know the KPI’s for your employees and that puts you with 96% of the other company leaders in American companies. In my many years of Los Angeles business management coaching I have found that your company dies if you don’t master this skill! That’s why 95% eventually die. They are not good at this skill.
Key performance Indicators are simply the numerical facts and data that will make it or break it for each employee to keep their job.
I advise each CEO I work with to do the following:
Key #1 – The employee should develop & submit their KPI’s to the boss!
Have the employee review the position description and pull out the five most important aspects of their job for review by the CEO.
Key #2 – The CEO should develop their own version and compare to the employee!
The CEO should do the same exercise and then convene with the employee to agree on the five most important aspects
Key#3 – Now…Boil them down & clean them up!
The five most important aspects should be driven by numerical facts and hard data whenever possible, but don’t get hung up on this. Just develop them and let them morph over time.
Key #4 – Finally…Hold your employees accountable to the five KPI’s during a weekly ½ hour meeting
I run several companies. I meet with all employees for a ½ hour KPI review meeting. It’s easy and fast and brings clear clarity to what is and what is not working in your company.
But wait….there is more….
It’s not sexy and it’s not particularly fun, but if you can’t read a profit and loss statement then you don’t know where your money is going and you will go belly up, regardless of your mastery on company KPI’s.
Just recently a business owner confided to this writer that after 20 years in business he figured out he didn’t really know how to analyze “the why” and “the what” of his business. He was hemorrhaging hundreds of thousands of dollars and was in danger of ignorantly running his business into the ground.
So, master the employee KPI’s and learn how to read and analyze your profit and loss statement. It will make a huge difference in your business.
Apply it now: Can you read a profit and now statement? Do you have a clear organizational chart and reporting lines? Does each employee possess a clear and concise position description and are held accountable to it with no exceptions? Do you review their KPI’s on a weekly basis? If not, do so today!