January 31, 2017
Planning & Strategy  |  6 min read

How to Get the Best Out of Your People Starting with Key Performance Indicators

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Tom Lombardo

Today’s employees participate most when they have a high-level understanding of your business and how their job fits into it. This attitude is new. Old-fashioned management philosophies based on narrow assumptions of self-interest simply don’t apply to today’s workforce. Today, people want to work for an organization that they believe will succeed; they want to succeed themselves. They want to be around other people who also want to succeed.

Taking advantage of this attitude is not easy, although it might seem like it should be. A lot of managers hit one problem right away: to provide employees with a high-level understanding, they usually need to disclose information that they used to keep private. That can be difficult, especially since it can backfire so easily. If you reveal too much, you can distract or even distress employees. Reveal too little, and you miss the high-level benefits. Getting it right has become a critical aspect of business development for organizations of every size.

The best way to solve this problem is to define success for your company and for each employee. Success may have several dimensions, but an objective measure ought to be at its core. When objective measures are well-defined, they map a person’s daily work to the business context that makes it important. That way, the responsible person can take ownership of their job wholeheartedly. Their work matters; they know why, and so do you.

Metrics that matter

Such an objective measure is often called a Key Performance Indicator (KPI). It’s a metric. It’s one number. Selecting which number, out of the morass of numbers most executives have at their fingertips these days, is both a science and an art. On the science side, since you know what you expect a given department or team to accomplish, you’ll choose from throughput metrics that correlate pretty well to financial results.

The artistic part is more important—and more difficult. The responsible person needs to control their metric completely. That’s crucial. While the KPI telescopes up to the big picture and explains why their job is important, it’s also entirely in their own hands. If it goes up or down, it’s because of them. Engagement, in today’s workplace, requires accountability like this. When you disclose the right number, in its business context, you engaged the best intentions from your best people. You empower them to prove their worth, and you can expect them to feel better about themselves because of it.

But there’s a pitfall to avoid: Offering rewards or compensation for hitting KPIs will undermine the benefits. The moment you attach a material reward to a given metric, its business context is shattered. Instead of moving the metric to succeed and to help the company succeed, you’ve turned it into a game. Now it’s all about winning, and you’ve already lost. You need the KPI to remain firmly rooted in its business context, and so instead of a reward, you offer something far more powerful.

A culture of success

Before we get to that, let’s look at an example of a KPI in action. Say we have a logistics company that specializes in coordinating trade show appearances. They have acquired an arcane body of knowledge that enables them to ship and interact with venues far more efficiently than others. They know they have this expertise, but it’s difficult to explain, and it’s especially difficult to target the individuals within a company that might hire them and become an advocate because their titles are all over the place.

So the marketing department—two people—was asked to solve this problem. They decide to write a guide that gives away some, but not all, of their expertise. Then, they’ll use an AdWords campaign to target people trying to solve complex trade show situations. They’ll offer them this free resource, and have sales follow up to see if they want professional services.

As you can imagine, these two marketers will have a great many metrics available. Click-thru rate on the ad, conversion rate on the landing page, successful downloads, delivery rate for the follow-up email, its open rate, and so on. They’re all relevant, but since we know what success is, the metric that matters is easier to identify. Success is finding people who might hire us, so the proper KPI would be the number of people who actually download the guide. The prospects who do that have an urgent need for our knowledge. It’s likely they’ll have a need for our services as well.

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Your most important asset

For you and for everyone else in your company, this KPI sums up what you need from your marketing team. And it brings us to the one thing that has more power to transform your corporate culture than anything else: recognition. Recognition is the most desirable currency in the workplace today, especially for millennials who have been tallying “Likes” on Facebook their entire lives.

Recognition, used well, can create a culture of success. Since your KPIs are objective measures rooted in solid business objectives, there’s no denying when they move, and there’s no denying who moved them. When you publicly praise the team that moved their KPI, every other team knows that they have a chance to get recognition like that, too. Your people get an inspirational example of teamwork, and you establish a positive feedback loop that’s perfect for engaging today’s unique employees.

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 Tom Lombardo.png

Tom Lombardo is the content strategist and editor for RESULTS.com. Lombardo has more than a decade of experience writing copy for the software industry, but it’s his other adventures—teaching elementary school, being a financial advisor, trekking through remote parts of China—that have made him passionate about the renaissance in business management taking place around us right now. 

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