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TURNAROUND MANAGEMENT: Do Your KPIs Tell You It’s Time?

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The Point: – The compilation and coordination of Key Performance Indicators (KPIs) are taken very seriously by numerous companies for good reason. They often determine the business strategy the company will accept, and the strategies that should be rejected. Their compilation acts as a tool that differentiates the company from other competitors. So if you ask some business owners, they will tell you that the essentiality of business KPIs can never be over-emphasized. When your company needs turnaround management, business KPIs can help you drive back your sales, profits, and even make your company’s growth surpass previous levels. Nonetheless, if they are not managed appropriately, they can be detrimental to your business strategy. So in this post, we’ll explore the topic of Turnaround Management: Do Your KPIs Tell You It’s Time?… Enjoy!

TURNAROUND MANAGEMENT: Do Your KPIs Tell You It’s Time?

DO YOUR KPIs TELL YOU IT’S TIME?

Your Key Performance Indicators (KPIs) tell you whether it’s time to make changes in your business or not. Basically, the reason why companies rely on KPIs is to know if the things that are being done in the company are having a real effect on the business, measuring performance in a variety of categories. You can invest all your time and energy in getting so many tasks done by your company, only for your business KPIs to tell you that your performance needs improvement. You may think you have the best business strategy, but unknowingly to you, it is not effective enough. KPIs can indicate to you that there is need for turnaround management before the problems of the company present themselves (And if you’re like most of the organizations I consult with, there typically are one or two problem areas present regardless of how smoothly run the operation is!) Companies that track their KPIs and take it with seriousness rarely face worst state issues.

IT’S ALL ABOUT BUSINESS STRATEGY!

Measurement of business’ KPIs indicates to the leader how much, or the number of something, there is and allows for compare/contrast analysis between the different measurements taken (i.e.. total revenue last month versus previous month, year-to-date average, last year same month, etc.) The metrics and measurements however tell managers that it is time to add something to the business strategy or remove something.

KPIs FOR BETTER PROJECT/RESOURCE/TEAM MANAGEMENT

A company that does not rely on business KPIs will find it more difficult to manage projects, resources, and massive teams, when compared to a company that tracks and measures KPI. This is the advantage of companies that rely on KPIS that makes them rarely face issues in the worst situations. Every business owner should see the measurement of KPIs as a perspicacious idea, and use it to decide “next steps” for their business.

WHO SHOULD COMPILE KPIs?

Since your KPIs tell you it is time to make changes in various aspects of your business, it should never be taken as a trivial tool. If possible, employ a qualified person that can measure KPIs with data integrity/consistency, and at the same time decipher it for you. Your KPIs will guide you positively in so many ways, so it should be measured regularly, and followed-up properly to avoid unnecessary and superfluous turnover of processes/procedures/management.

SUMMARY

In this post we’ve explored the Turnaround Management topic of KPIs, namely if they are telling you it’s time to move your business around. Your KPIs are a toolkit that shares a lot of important metrics by which you can drive your business forward with from analysis. Not measuring leads to not managing, and may cause you to miss out on important turnaround opportunities!

Sam Palazzolo

PS – If you/your organization has challenges as a result of Turnaround Management activity, please don’t hesitate to drop me a line and request future post titles! Here are a few other titles that are currently in the works:

 

 

Leadership Challenge – Is It Possible to Emerge From the Darkest Hell Healed and Restored?

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We recently participated in a leadership roundtable discussion.  The focus was on the many leadership challenge moments that leaders face running their organizations.  Whether the leader is in charge of a startup, with its many ups/downs associated with daily (sometimes hourly) survival or the leadership challenge of running an existing organization (sometimes no easy feat regardless of how long they’ve been in business!)  There were many topics considered for discussion:

  • What’s the best way to develop the strategic plan (and how to get that strategic plan implemented)?
  • Best practices when it comes to dealing with moments of change
  • How to ensure that all (both leaders and team members) have the same organizational vision through communication
  • Implementing recruiting strategies for A+ candidates (A version of the Top Grading methodology)
  • Ensuring that the organization continues to be agile/innovative
  • Creating a “High Potential” program for future organizational leaders

As you can tell, the topics were those most pressing to the leaders gathered.  Questions were asked/answered, and an overall tone of satisfaction permeated the meeting room. That tone though shifted abruptly when one of the leaders in attendance asked the following question:

“Here’s a leadership challenge for you… Is it possible to emerge from the darkest hell healed and restored?”

If you’ve read Malcom Gladwell’s recently released book, David & Goliath, then you know the story presented in Chapter 5 – Emil “Jay” Freireich. The story is of Dr. Freireich and his tumultuous search for a cancer cure for cancer. There is also presented in this chapter a theory regarding direct hits, near misses and overall misses (Think the London bombing that occurred during World War 2 . The theory being that those who received direct hits, as morbid as it sounds, don’t really count for “after bombing” feedback.  Those that achieved overall misses still laid in wait/fear for future bombings (a very small minority).  Finally, those that achieved near misses and lived to tell the tale found that they were not only resilient, but encouraged and grew in their resolve to overcome successfully future bombings!

With this knowledge in mind, we shared the story and similar story that those leaders who have experienced truly dark spaces (The ones they don’t tell you about in MBA school) often times have similar resiliency and resolve to overcome! The pressing leadership challenge therefore doesn’t really appear to present itself of much of a challenge at all (albeit those effected might tell a slightly different tale!)

What’s the Point?  So what’s the point? Can it be as simple as “that which does not kill us only makes us stronger!” Based on the research of Malcom Gladwell adn Dr. Freireich, we think that not only is there a high resiliency that would allow one to overcome obstacles but also succeed.