Leadership Puzzler: What Should Be Measured?

leadership puzzlerOne of my clients has been struggling with the dashboard question for a while. What to track? What makes a difference? In addition, he had a couple of partners whose interest in the “numbers” was less than enthusiastic and they simply wanted to get the work done. The CEO tried several versions without success, meaning that they didn’t really tell him anything about his business that was predictive. Meanwhile, sales just continued to bump along at a steady 5-7% growth rate, with the same challenges continuing to come around like clockwork. His partners could not understand why he was even looking at his dashboard since things were good in their minds. After a year of trying to find the right indicators, he was about to give up, when he had a thought that maybe he needed to find out what other people might want to see.

So he sat each of his partners and senior managers down and asked what they looked at each month to tell them if they were on or off track. He was actually surprised at what he heard because a couple of the indicators were in the heads of his managers, but nowhere in his spreadsheets! His sales manager said he knew if the number of leads coming in during a given month were “X,” in two month’s time sales would be a multiple of that. The CEO had wondered if the money he spent on sales leads worked and here was his answer, so he started tracking sales leads and the ratio of closed sales to leads. As time went on, he started tracking the size of the sale and several other factors to see if he could find identifiers for the ideal customers.

He found similar insights in the conversations with the installation and engineering departments. Next, he had each leader create his own dashboard with his help and then aggregated them into a single one for the company. Now each of their senior staff meetings starts with an explanation of anything that is out of the ordinary on the dashboards, what they should do about it, and then on to new business. Meetings are never longer than an hour and the team leaves energized and feeling it was a productive meeting. Interestingly, their growth rate has increased to 15-18% on average over the last 12 months. I suppose there were several factors that led to this, and you can’t say it was just the dashboards, however, I believe it was about 95% of it. You can’t affect your productivity or sales levers without first knowing what they are.

photo credit: WingedWolf via photopin cc

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