Performance indicators can quantify your success

THE MANILA TIMES
Business Times p.B8
Friday, March 19, 2004
http://www.manilatimes.net/national/2004/mar/19/yehey/business/20040319bus13.html

LEARNING & INNOVATION
By Moje Ramos-Aquino
Performance indicators can quantify your success

In my time, you can’t pass high school without falling in love with the English poet Elizabeth Barrett Browning. Remember these lines?

“How do I love thee? Let me count the ways.

I love thee to the depth and breadth and height

My soul can reach, when feeling out of sight

For the ends of being and ideal grace.

I love thee to the level of every day’s

Most quiet need, by sun and candlelight.

I love thee freely, as men strive for Right;

I love thee purely, as they turn from Praise.

I love thee with a passion put to use

In my old griefs, and with my childhood’s faith.

I love thee with a love I seemed to lose

With my lost saints,—I love thee with the breath,

Smiles, tears, of all my life!—and, if God choose,

I shall but love thee better after death.”

In business, it is not enough that you passionately want to succeed, you also have to define and quantify success. Otherwise, you’ll never know you have already succeeded.

So how do you succeed in business? What tells you that you have reached the peak, save for common signs like your big fat bank account or moving to a bigger office to accommodate increasing number of employees and stocks or opening new branches? These are what you call Key Performance Indicators or KPI. These will bridge the gap between your strategy and your operational effectiveness.

In previous columns, we proposed that People Development be one of your Key Result Areas or KRA (the areas in your organizational life in which you must achieve significant results in order for you to accomplish your Mission using your values toward the path of your Vision within your planning horizon).

Under this KRA, your Strategic Goal or SG (long-term results you want to achieve) might be: to develop and nurture competent and effective leaders across the organization at all levels.

Your KPI, then, is competent and effective leaders across the organization at all levels. By this you mean employees who, according to Jim Collins, exemplify any of the five levels of leadership wherever they are in your organization.

In his book Good to Great, Collins defined Level 1 Leadership as “Highly Capable Individuals who make productive contributions through talent, knowledge, skills and good work habit and Level 2 as Contributing Team Members who contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting.”

Collins’ Level 3 leaders are “Competent Managers who organize people and resources toward the effective and efficient pursuit of predetermined objectives. Effective Leaders are Level 4 and they catalyze commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.”

Finally, “Level 5 Executive who builds enduring greatness through a paradoxical blend of personal humility and professional will.”

So you’re now clear that your leaders are not just those who hold leadership titles like team leader, foreman, crew chief, supervisor, manager, vice president, AVP (alalay ng VP), president, CEO, COO (child of the owner), SOB (son of the boss).

How do you now measure this KPI across the organization? Let me count the ways. KPIs can be expressed in percentages, ratios, absolute numbers, and others.

For example in your marketing, you have employees who are multi-skilled, able to make decisions within their area, team player and who exemplify your corporate values. Other forms of measure are number of repeat customers, number of praises and complains, amount per transaction, sales volume per employee, etc. Also absenteeism, tardiness, accident rate and others. For your fiscal measure, you may use pre-tax profit, shareholder equity, among others. KPIs or quantifiable measurements will vary according to the nature of your business.

The caveat is that not everything that can be counted counts and not everything that counts can be counted.

ASTD 2004. The annual conference and exposition of the American Society for Training and Development will be held this May 23-27 in Washington DC, USA. One of the highlights include three keynote speakers:

Henry Mintzberg, professor of management at McGill University in Montreal, Canada, will present a new way to create managers, calling for a revolutionary shift in management development. Mintzberg’s discussion is based on his forthcoming book, Managers not MBAs.

Richard Teerlink, former chair and CEO of Harley-Davidson, Inc. and author of More Than a Motorcycle, will talk about the principles, innovations, and creative responses that were responsible for Harley-Davidson’s reinvention and miraculous turnaround. His philosophy centers on the idea of people being the only sustainable competitive advantage.

Candice Carpenter, founder of iVillage.com and author of Chapters: Create a Life of Exhilaration and Accomplishment in the Face of Change, will examine personal and professional change in a radically new context and offer a powerful prescription for managing change designed to alter the way we live and work.

For complete details please visit www.astd.org and for assistance in registration and travel please call Nara Hibalora at 715-9332.

Moje, president of Paradigms & Paradoxes, consults on Strategic Thinking & Planning, Human Resource & Organization Development and Innovation initiatives. For feedback, please email her at moje@mydestiny.net.