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Guest post by: Kevin Kragenbrink Become an Author

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Mike came out of the meeting with his financial director confused and a little angry. The second quarter reports for sales and production had just been completed and once again, the numbers did not come anywhere close to Mike's projections. "I just don't get it," he said. "I have been doing this work for years and I know those numbers are not out of reach. If I were doing this myself, I am sure I could make them happen. Why can't I get my people to get it done?" As I listened to him, I could feel his frustration and pain. When he finished, I asked him to describe how the people in sales and production know what they need to do to meet their goals.

"That's easy," Mike said, we have regular planning meetings and I have given them their targets over and over again. They know that we need to have sales at $275,000 per month and that production needs to produce at least 8200 units per week. I don't see what I am missing."

Mike had done an excellent job of defining the results he wanted. His problem was not in the goal, but in the measurement system. He was measuring results, but he was not measuring the regular behaviors and activities that his people needed to do to make those results happen. The rule of business here is that people respond to what you measure. Here is what I suggested to Mike.

Setting and tracking key impact numbers at the department level is one of your most powerful tools to motivate your managers and employees to succeed. Key impact numbers are, in most cases, the numbers behind the numbers. That is, these are the behavior related numbers that work together to produce the results you want to have. To make these numbers work, the CEO needs to set goals or establish the standards for success. The manager or employee is responsible for tracking and reporting against that goal or standard.

Tracking their own numbers will allow them to see where they actually are on a regular basis. With very little involvement from the CEO, other than keeping that number in front of them or having them report the number to you, they will always know where they stand with regards to the goal you have established. As you develop and implement these measurement systems, your team will begin to work more effectively to produce the results desired.

Here's a way to get started. Think of one department in your company right now that could be improved by better measurement of success related behaviors. Identify one key impact number in that particular department that they could track on a regular basis and feed up to you. Set a standard or a goal for what that number needs to be and then encourage, support, and train your people to achieve that standard. The form of tracking will depend on your company and the department. In sales, for example, you could measure number of sales appointments set by the day or week. Maybe your team would benefit more by measuring your pipeline values regularly. In your world, you might want to start with measuring the number of customer's that have called in with complaints or problems and track the reasons for their problem. You may want to measure the number of pieces coming out of a certain department in production. Maybe you need to track gross profit by individual job. Every company and each department will be different, but the principles are the same.

The key to success is to have the people responsible to produce the numbers take ownership of the measurement and reporting of those key numbers. If you do this well, you will be amazed at the impact it has on your business. Remember, people respond to what you measure.

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