Start by making sure that “hitting your numbers” drives the right behavior.

By MARK RIFFEY for the Flathead Beacon

Are you holding your team members accountable for their work based on key performance indicators (KPIs), key process areas (KPAs), and/or key result areas (KRAs)?. It’s common for firms to weave these metrics into job descriptions so that each employee is clear that “hitting their numbers” is central to meeting the progress expectations of a particular role.

All the numbers are connected

If marketing hits their numbers, they’re generating at least the minimum number of leads that sales needs to maintain their monthly sales quantity. This assumes that they have sufficient advertising budget, the right people in “skill positions”, and the company’s chosen market is large enough to consistently produce those leads month in and month out (a KPI for upper management?). Sales has to hit their number using the leads marketing provided to them so that the company’s finance team can make its monthly goals. At the least, this means making payroll, paying the bills, retaining some earnings for future purchases, and hopefully generating some profit.

You need manufacturing (whatever that means for you) to hit their numbers so that the delivery promises made by the sales team (hopefully in cooperation with manufacturing) can be met so that delivery / deployment / installation dates are achieved. Customers don’t like missed deadlines, often because they’ve made their commitments to their customers based on delivery dates you promised them.

Your customer service / support team has to meet response time and ticket closure numbers so that customers aren’t waiting too long for the help they need. A customer who is dissatisfied with service and support might decide to hold your invoice for an extra week, or month. That impacts your financial team’s numbers.

If anyone misses their numbers, it can impact other teams and make it difficult (if not impossible) for them to hit their numbers. That makes for a not so awesome management meeting between team leaders. Do you have a KPI for finger pointing? Is your leadership solid enough to prevent that train wreck?

What do the numbers mean?

Avoiding that train wreck is critical to the morale and productivity of your team. Poorly chosen numbers, or numbers that don’t reflect your culture and values are eventually going to create trouble.

If your KPIs (etc) are chosen well and carefully explained to your team members, they will reflect the desired output and behavior of your team members. Collectively, the numbers reflect a team effort to achieve suitable progress.

“Chosen well” is critical. It’s not terribly difficult to pick a number that seems to identify a desired level of performance, only to find that someone has abandoned a cultural expectation in order to hit their number.

These numbers are intended to make it easy for your team to understand the most important parts of their role and to know what level of productivity is needed to support the company’s needs – ultimately the needs of another department or team. They also need to make sense.

Quality matters

A KPI of “Make 50 sales prospecting calls a day” might seem reasonable, but does it make sense? 50 calls in an eight hour day requires making six calls per hour all day, every day (plus two more). Does your marketing team produce enough leads to satisfy this need each month? 20 business days a month means marketing has to generate 1000 new leads every month per salesperson. Alternatively, your sales team has to do their own lead generation (Do they have the tools for that? Do they know how to use them effectively?)

Averaging 6.25 calls per hour means that your sales team averages no more than nine minutes and 36 seconds learning about each prospect during each call. Time consumed by travel, meetings, prospecting, follow ups, trade shows, etc might shrink those sales calls further.

None of this speaks to quality. If hitting numbers is all that matters, 50 calls is 50 calls, no matter how qualified the lead. The quality of leads & sales calls will likely decline as the deadline approaches. The It’s tough to create a relationship and assess a prospect’s needs in under 10 minutes. Using that time on a poor lead is doubly costly.

Now imagine that you’re expected to make 100 sales calls a day, because “that’s what ‘real’ salespeople do”. What will suffer?

Unfortunate performance measurement choices can negatively impact any department. Be sure the numbers you ask your team to hit make sense holistically for the entire business. Accountability for that starts with you.

Want to learn more about Mark or ask him to write about a strategic, operations or marketing problem? See Mark’s site, contact him on LinkedIn or Twitter, or email him at mriffey@flatheadbeacon.com.