Key Performance Indicators

I’ve had mixed results over the past few years working with both Sales & Marketing organizations that have recognized the need for tracking metrics & key performance indicators (KPIs). As staunch believers in CRM, we have invested a great deal of our time, effort, training, and data to Sales force.

My intuition says this is a great idea, but so often, especially in this business, my intuition has been proven wrong. There are many pitfalls to avoid when leading a metrics-driven management strategy. With visibility comes the need for consistency- here’s an example:-hotcfarmersmarket.com/the-ultimate-seo-audit/

Perhaps you’re deciding on 3 key metrics to hold your employees accountable in terms of day-to-day activity – let’s say one is “Calls per Day” – and the goal is 40 calls. The month rolls on, and 3 of 4 sales reps are pounding the phones but not closing sales. The 4th rep is making half the calls, but by a wide margin brings in the most new business that month.

The first problem is the manager has lost the credibility of that metric – visibility into individual behavior of the team has essentially “proven wrong” a workday metric according to end results. Of course, the unsound conclusion may be made that if the sales reps make less calls, they will make more sales. Doubtful! On the contrary, the analysis has generated a positive result, which is that this metric is not in fact a key performance indicator (KPI) and thus should not necessarily be used as criteria to determine the quality of an individual’s job performance.

Instead, you need to take this opportunity, a “teachable moment” if you will, to drill down into what behaviors, skills or qualities are producing these tangible results. While talents may not always be easily learned (or at least mimicked) by colleagues, or measured by data-driven quotas, new behaviors can be encouraged and tracked. It is likely that in this scenario, the key behaviors for success were not known or not being measured.

If these opportunities are not seized, and instead flawed KPI’s are maintained and success is seen as a fluke, then as a manager you have lost control over both your data and your delegates. Your metrics may be accurate but they don’t indicate performance, and your employees become the blind led by the blind. They now lack leadership to guide them towards behavior that results in success, but rather are sacrificing innovation or agility for compliance with objectives that don’t correspond to results.

In Sales, I’ve come to believe that the ends truly justify the means. At the close of the day/month/quarter, every CEO, CFO, and VP of Sales is going to determine your continued employment by just one KPI – revenue. Mo’ money, mo’ problems? Sorry Biggie. Cash is king in sales – and the agile, creative sales reps are going to find ways to bring it in, and I have a feeling their jobs will be a little safer for it.

Don’t get me wrong – standard metrics and clear objectives are extremely important for alignment and direction, but KPI’s need to be distinguished from individual and team goals, and never taken for granted, but continually put under the microscope and re-evaluated.