How KPIs can help build a better team
There is a temptation in the business world to assume that key performance indicators (KPIs) are the sole purview of “organizational leaders”: CEOs, presidents, board members and other C-suite executives who make important strategic decisions.
The reality couldn’t be further from the truth.
KPIs, the principle metrics that define strategic success and act as a yardstick for areas that might need improvement, are an essential tool for developing your team and achieving high-quality organization-wide results.
They might even offer an innovative solution to the intractable problem of employee engagement.
The problem with employee engagement
Employee engagement is something with which many organizations are struggling. Just 33 per cent of workers in the United States (and a measly 15 per cent worldwide) define themselves as being “involved in, enthusiastic about and committed to their job and workplace” at work, according to Gallup.
This is profoundly impacting many businesses’ bottom lines. To cite just one statistic: Organizations with a highly-engaged workforce see an average 20 per cent increase in sales, Gallup says.
Unlocking the power of employee engagement
Employee engagement is one of the most elusive – and misunderstood – concepts in the business world today.
Many executives are struggling to cope in a world where employee expectations seem to soar by the day. Workers are more mobile than ever before, moving between jobs at a pace that would have seemed impossible only decades ago. In a world where the other side of the fence is as close as a search on Glassdoor.com and articles about what workplace culture should be proliferate on LinkedIn, it’s also more informed than ever.
Catered lunches or a foosball table in the break room might be enough to cut it in some workplaces, but these are at best temporary fixes.
So how, then, can managers breathe life into a disengaged workforce?
There is, of course, no one solution. But one area that should be a bigger focus is informing employees about, and getting them involved in developing, your organization’s purpose.
Connecting employees to your organization’s purpose
There’s a story (which may or may not be true, but we’ll leave that aside for the time being) that frequently makes the rounds on blog posts about employee engagement. It relates to a visit John F. Kennedy made to NASA during the 1960s. The president approached a man working at the facility to ask what he did for a living.
“Mr. President,” the janitor replied, “I’m helping to put a man on the moon.”
This response is frequently held up as the pinnacle of employee engagement. What business owner, manager or director wouldn’t want each and every one of their employees to feel this level of connectedness with their organization’s purpose?
Part of this, of course, comes with defining your organization’s mission. “Making money” isn’t enough. If you want an employee who is truly engaged, you need to find the unique quality that should make your employees want to get out of bed in the morning. (And no, “getting a paycheque” isn’t going to cut it).
Once you’ve decided on it, you need to find a way to show your employees how they connect to it.
That’s where KPIs come in.
The strategic advantage of developing KPIs
Ask any employee why they don’t feel engaged at work and you’ll probably get some variation on the same theme.
- They feel disconnected from the organization’s larger purpose.
- They fail to see any impact their daily efforts – the activities which occupy most of their time – have on larger organizational goals.
- They don’t understand the strategic direction of the organization.
These are in some ways distinct problems. But in other ways they all stem from the same issue: Poor communication, about strategy, between management and lower-level employees.
KPIs help solve this problem.
KPIs are, by their very nature, strategic. Because they differ from metrics, they help companies to really focus in on what’s important. Not everything can be a KPI. KPIs force you to focus in on those metrics that really underscore the end goals of your organization.
KPIs force an organization not just to measure how their strategy is performing, but to decide what their strategy is in the first place. They show employees a lot about what actually matters to management in the first place.
For example: Profit for a charity would be unlikely to qualify as a KPI. Why? Because a charity is a charity – it exists to achieve some sort of larger impact beyond simply turning a quick buck. An organization like that would be far more concerned with the amount they’re investing in scientific research, maybe, or perhaps the number of laws they were able to change.
Wouldn’t it be nice if your employees could see the end goals towards which they are working?
The role of KPIs in employee engagement
Here are the three main ways that adopting some KPIs can help your organization build a better team.
They get everyone pulling in the same direction
One problem with which team-builders perpetually struggle is bringing together the disparate elements of an organization to focus on key goals. Sales is worried about the minutiae of drawing in new clients and converting them into customers. Your product development team is focused in on the latest technology and trying to get it to market. Your human resources team is concerned with filling any openings and keeping your workplace engaged.
Adopting some KPIs can help bring it all together.
By focusing in on the key metrics that really underscore business success, you’ll be able to show your employees the role their work plays beyond just what they do on behalf of their particular departments.
They help connect employees’ work to organization-wide goals
KPIs are a great way to communicate strategy to your employees. They help wade through the at-times messy, cryptic and ambiguous world of tactics and connect them to the end goals of your organization.
Many of us have experienced this. We get so caught up in our own little work bubbles, trying as hard as possible to ensure we stay on top of our own specific set of tasks, that we frequently fail to see why we’re doing it in the first place.
Is it any wonder that frustration and, eventually, disengagement sets in?
KPIs help cut through this muddle. They take a step back from the chaotic world of tactics to identify the end goals towards which everyone is working.
More effectively reach key goals
Micromanagement creates a lot of problems for employee morale. But one of the worst is the brake it puts on employees’ creativity.
Say you’re a manager who’s in charge of the launch of a major new product. That you want to make the product launch a success should be self-evident. But there’s a big difference between telling your team about the sales numbers you’d like to achieve and diving right into the nitty gritty of what you want the website to look like, which marketing channels you’d like to use and even when to send out social media posts.
Some managers might think they are just doing their job or even being helpful with employees by offering their “suggestions”. In reality what they’re doing is choking off their workforce’s creativity and likely frustrating them to no end.
No one expects managers to stay completely hands off with what their employees are doing. But the line between setting an end goal and telling your employees how to get there is a fine one.
The advantage with setting KPIs is that they allow you to set an expectation for what you want accomplished, while leaving the specifics up to the creativity and ingenuity of your team.
How deciding on KPIs can take your employee engagement to the next level
Want to take engaging your employees a step further? Engage them in a discussion of what your KPIs should be.
This will serve a few benefits, including:
- It starts a debate about strategic direction: You’d be surprised about how few organizations actually articulate their strategic direction in a clear, codified manner. Instead employees – including some fairly senior managers – are left to read between the lines to discern their organization’s strategy. Make money? Sell widgets? “Make a difference”? Establishing KPIs helps start a discussion about strategy. It forces you (and your employees) to ask the question: “OK, what is it we’re ACTUALLY trying to do here?”
- It helps to establish how KPIs connect to strategic goals: Setting out a bunch of KPIs for your employees and saying “here, achieve these” isn’t good enough. Without context, KPIs are just a meaningless jumble of digits. Engaging in an exercise like this one will allow employees to not only know what the KPIs are, but to see how they connect to an organization’s end goals.
- It engages employees directly: People like to be listened to! If nothing else, taking the time to hear about what your employees to say will have inherent engagement benefits.
Looking for some ideas on what KPI's to track and monitor, then head over to our KPI Examples Library