If there is one thing I learned in my nearly 25 years in corporate life about execution leadership, it’s this: Leaders cannot achieve their grand visions and strategies without a relentless push to execute brilliantly.
The best way to do this is with the right metrics to measure, monitor and manage. Metrics that are not necessarily the “bottom line” ones – such as Net Profit, Total Revenue, Earnings Per Share, or Total Customers.
No, these are “feeder” metrics – numbers that, if they are managed well, will ensure that the “bottom liners” are stellar.
These metrics, in total, bring you this level of satisfaction: “your company has satisfied and happy employees bringing the right potential customers into the pipeline, converting them in the appropriate numbers and at a good price, and then retaining them with high quality and cost-effective world-class customer service”
That’s operational execution in a nutshell, isn’t it?
But to get to that statement, a leader has to SEE it in the numbers, in the form of a solid metric set (this set is ideally suited for a service business that has recurring customer revenue, but it can easily be modified for any other business):
- Prospects Brought in the Pipeline (or Sales Funnel, or what ever similar word you’d like to use)
- Prospects Converted (aka Sales)
- Sales Conversion Percentage
- Average Revenue Per Sale (or Monthly Recurring Revenue Per Sale)
- Customers Lost (that is, had either discontinued service, or stopped being a customer based on some time frame)
- Customer Retention Rate
- Average Customer Life
- Net Promoter Score (For more on this, read here and here)
- Process Error Rate (or Fault Rate – there should be a way to measure each time a customer reports a problem)
- Operating Margin
- Employee Turnover Rate
- Employee Net Promoter Score (that is, would your own employees recommend your company as an employer to their friends and relatives?)
After reading through these 12 metrics, go back and read the execution statement – these are the best metrics I’ve found to “cover” it, and then prove it to be true.
And…while it’s one thing to create the metrics, it’s a whole other ballgame when it comes to actively measuring, monitoring, and managing them.
That’s where the relentlessness comes in. These metrics must permeate an organization – in fact, some of them should be generated DAILY. Employees should be well versed in why they exist and why they are important. They should be reviewed and discussed regularly. Targets should be set. The appropriate accountability standards against those targets should also be set, and maintained.
Measure, measure, measure. Monitor, monitor, monitor. Manage, manage, manage. Relentlessly.
It’s THE best way to push forward with execution – emphasis on the right metrics that conform with your “execution statement”.
Of course, don’t forget that as a leader, you need to make all this number stuff interesting, exciting, and yes, even fun. That’s another big challenge, but believe me, it can be done. Who doesn’t have fun winning?