My Company’s Journey to Discover Our KPIs

One of my favorite films, when I was growing up, was The Wizard of Oz. Of course, most of you are familiar with Dorothy and Toto following the yellow brick road to meet with the mighty wizard so that she could return home. But for all of the hype that surrounded this great sorcerer, it turns out that he was simply a clever man behind a curtain. With that in mind, I want to give you all a peek at what takes place behind the curtain in our business, how the sausage is made, so to speak. Over the next few weeks, we’re going to really look at what makes our businesses work. Today, I want to share our team’s journey to discover KPIs.

Discover KPIs? No Problem!

Every January, we close the office for a few days to get away and conduct our strategic planning session. This consists of 3-4 days in an offsite location where we are free from the distractions that can occur in the workplace. Over the course of this retreat, each team member contributes to the process and is tasked with homework on their individual areas of responsibility.

This year, my assignment was to identify, strengthen, and condense our company’s KPIs. In a moment of arrogance, I boldly proclaimed that I would have this done in 45 days. I mean, I’m the guy who will charge hell with a water pistol. Discovering our KPIs would be no problem. Well, more than 20 books, countless websites, whitepapers, and podcasts later, I had to admit that I had bitten off more than I could chew in that timeframe.

I want to share this experience with you because understanding what helped me in my journey of discovering KPIs in our business may be of great value to you. So, without further ado, let’s explore some of the resources that I found helpful.

Recommended Reading

These are some of the books I read while discovering the KPIs for team. This isn’t an exhaustive list, but it is made up of the books that helped me the most. As I go through this list, I’ll share a little bit about why I read them and what I gleaned from their pages.

1. Business Model Generation by Alexander Osterwalder. I began with this book because I wanted to double-check the model of our company. Basically, I was looking at the business’s operational throughput, trying to gain some perspective on our strategy. This book provided some framework on strategy. If you know where you’re going, you know how to measure.
2. The Consulting Bible by Alan Weiss. This one was industry-specific to our business. However, you could exchange your industry, applying the principles to your own business. I chose this book because I am trying to narrow down the critical success factors for our team. As you know, our team’s business is consulting in nature. We consult on personal finances for business owners while also consulting on the business’s value. So, I used this book to look at our operating systems to help identify those critical success factors within the business.
3. Leading Exponential Change by Erich R. Bühler. This was a powerful book. So many business owners would be happy with a 5% ROI or year-over-year increase. In 2020, we had almost a 100 percent increase in our revenues. When you’re dealing with this type of exponential growth—not just multiplicative—you must approach things a little differently. You need to be nimble. Agile. You must track things more quickly than you would if you were experiencing steady growth. If I’m honest, such exponential growth concerns me. Because of this, I want to ensure that we measure the right things. That’s why I read this book.
4. Key Performance Indicators by David Parmenter. I spoke about this book at length in my last entry. It may be the single greatest book on KPIs that I have read. David really offers some excellent insights into what KPIs really are. He actually wrote this book to accompany and enhance the balanced scorecard methodology. David’s book introduced me to critical success factors, key result indicators, and the idea that not all performance indicators are KPIs. In short, this book is a must-read.
5. KPI Checklists by Bernie Smith. Do not purchase this book on Audible. It will only tick you off that you missed out on the incredible resources within the printed copy. Once you begin to discover KPIs in your business, this book provides you with some great checklists and information on measuring and tracking them. Overall, this is just an efficient “how-to” guide. I highly recommend that you pick this one up.
6. Key Performance Indicators by Bernard Marr. This is an academic book. It’s not one that you’re going to read every single word in. For example, let’s say you’re looking at customer lifetime value. He explains this as “the strategic perspective is the customer’s perspective.” Marr, then, follows this up with the key performance question, “How well do you understand the financial value of our customer relationships?” He then explains why it’s important, how to calculate it, how to collect the data in a cost-effective way, and the target-setting benchmark that you can use. Essentially, this book tells you all of the details that you can use to build your KPIs.

What’s the Purpose?

My reason for entering into all of this research was to nail down the 3 to 4 critical items that I need to check (on a macro level) to know exactly how our business is performing. Basically, if I’m off hunting in the mountains for a month, I want to be able to look at these items and tell what’s going on with our team. Over the past month, I’ve looked at these items in the context of the 8 key areas (Planning/Leadership, Sales/Marketing, People/Operations, Finance/Legal).

RELATED READING: Driving up your company’s value with the 8 Key Areas of Business

Over the next few weeks, I will be sharing some of the particulars of our team. I’m doing this so that you can see the authenticity in what I teach. But, I’m also doing this so that you can see some of the frameworks or processes that go into this so that you can work within your company. If you’re reading this and thinking, “Justin, I don’t have the time for this. There’s no way I can read 20-30 books in a month to discover the KPIs in my business,” I get it.

I understand that your time is limited and precious. But that’s where the value of hiring a consultant really comes into play. You bring them in to apply their experience to help you avoid making common mistakes or even expedite the process, enabling you to focus on growing your business.

Wrapping Up…

Friends, this has been such an eye-opening experience for me. There’s still some work to be done, but I am grateful to share this process with you, giving you a glimpse into my life as a business owner. Hopefully, through my experience, you can learn how to quickly and efficiently discover, implement, and measure your own KPIs. Or, perhaps, be able to decide that you really don’t have the time or patience to do it all on your own.

Life is hard, but life is good. I’ve certainly learned that discovering KPIs can be frustrating. However, it doesn’t need to be. With a great consultant and a little research, you can make discovering your KPIs, at least, financially simple. Let’s go out and make it a great day!

Don’t have the time to research and solidify the KPIs in your business? Save yourself a ton of time, energy, and money by hiring an experienced business consultant. Reach out to our team. We’d be happy to help!