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Bram Lagrou: Welcome back to yet another episode in The Commercial Leader podcast. My name is Bram Lagrou. Always a pleasure to see you back, and let's dive right in When is the last time you looked at your KPIs for yourself and/or your team, and you thought like, "Jesus, this is not easy. This is not straightforward.
we're not all super clear. There's too much, there's too little. we're not really accountable," and all of these sorts of questions? Well, guess what? I hear about these challenges all the time when speaking to business leaders. Here's the thing.
I've worked with banks where every staff member or every banker, so to speak, had 12 or 13 different KPIs to track.
I have to say, way too much. Typically, the more analytical an environment, the more they overcomplicate things, is my experience. [00:01:00] I've also worked with organizations where they try to distill it to three, maybe four different KPIs and things that are within the control of a rep or a BDM, and that's probably a much better way on how to go it.
But then the question is: What exactly do we wanna measure? What exactly is a high-leverage activity that the sales rep or BDM can engage in and report back on to the group? That's really where a lot of the challenge lives. It was only last week when I spoke to one of the people that I'm coaching, where it was very clear that what his boss wanted him to report on and what he thought was really good to report on, they had two very different ideas.
And sometimes I also see that organizations are changing the goalpost on a regular basis, which means [00:02:00] for a number of weeks they measure this, then they go off and change it again and move to something else instead. And then it's basically a start, stop. You don't really build consistency over time, and we all know that, especially in B2B environments, that, it takes the lead time from the start of a conversation to the actual close, and therefore where a contract is signed, that there can be a serious delay between those two moments.
And so we have to have at least some consistency over multiple months to be able to do it justice.
And so one great resource that I've come across in the years of working with small and large organizations and everything in between is the book, which is called The 4 Disciplines of Execution.
The 4 Disciplines of Execution, or shortly called 4DX, is great because it basically [00:03:00] says that Based on extensive research across organizations, small and large, and by the way, globally, is that it's great for teams to have not more than three key activities to engage in and measure their activity on a week-to-week basis, and report back to the group in a 20-minute meeting.
Now, there needs to be a scoreboard, and then the question is, well, what do you put in there? And how do you track it? I think clarity on this is essential. Most organizations, they know they have to have KPIs, so we don't necessarily expand on the idea of it.
But I think the most common and most basic question is, what is worth measuring?
Because the fact that we can measure something doesn't mean that it's worth measuring at all, or that we sometimes might attribute more value to something that is less [00:04:00] important over something else. And I think unless people really take the time to brainstorm all the things that we could measure, and then prioritize the ones that actually do make more sense because they're of high value and high impact, then of course that requires a filtering process where you first look at what's all available to you, and then funnel it through a process that delivers the most important ones on the back of that process.
But I don't see really organizations do that really well. They will, for example, say, "Ah, you need to make X amount of calls per week," or, "You need to go to X amount of networking functions a week," or, "You have to, follow up on certain amount of calls per week." Well, once again, all of these things might be important, but based on the products and service that you have on offer, and the sorts of clients you work with, and the number [00:05:00] of leads that you might already have coming in ongoingly, the activities that a sales rep can engage in have to be purpose-built for the organization.
And so assuming that what your organization should do is the same as what another one is already doing is not necessarily a great idea. I've noticed that every time when we, for example, run WIG workshops, wildly important goal workshops, which again, you can also read about in the book The Four Disciplines of Execution.
If you run a workshop like that, it's designed to pick the brain of all of the people in the room. So if your whole sales team is in there and you as the commercial leader participate, sometimes as a sales leader, we might have a preconceived idea that we already know what we should focus on. And I see sometimes that some of the people that I've worked with, [00:06:00] they would have initially said, "You know, Bram," before the workshop starts, "I really wanna get to this outcome there," and having the team buy into doing it this particular way and using these KPIs and so on and so forth.
The conversations that I had on the back of that was, "Let me ask you, are you really locked in into this outcome that you kind of want me to manipulate your team into? Or are you open for me to run the workshop really with an open slate and solicit all the great ideas, actually good and bad ideas that people might contribute, to potentially come up with something better than you have in mind right now?"
And typically, what I see is that the great leaders, they understand that they only know what they know, and sometimes that yes, they built a capable team, they hired excellent people, that they also might have a [00:07:00] good say and be able to contribute an idea that they hadn't thought about themselves. So great leaders, they're willing to be flexible.
They're not really tied to a specific outcome in advance. And so every time when we then go in with a more open-minded commercial leader, we have gotten a much better result than what the leader had themselves planned for in the first place. So be open is my suggestion to you that when you run a workshop, have somebody who is not involved in the day-to-day operations lead the workshop.
Help the people go into directions where, you know, question it anymore. But sometimes the most dumb-appearing question or the most simple question opens up an area that we wouldn't have gone into unless the question was asked in the first place, and that's where some of the great value [00:08:00] often lies in my experience.
Now, that again comes back to what sort of KPIs are really worth taking note of? And it really is not as simple and clear-cut to say what it is. That exercise has to be run. You have to put everything on the table, and then filter through what really is of high value for your business.
Your marketing and your sales here, of course, come together, and so it's important that you have the right people in the room when you take this exercise for a week session.
But obviously, any KPI is only as good as also clarity on the goal. What is the goal in the first place? 'Cause any lead indicator, any lead measure that we distill it back to obviously has to support the ultimate goal.[00:09:00]
So whether it is growth of a certain type, or it is number of customers, or it is average spent, or net promoter score, or any of those key things up there We always reverse engineer. Start with the end in mind. So getting clear about a goal that is not just aspirational, but it has also some level of realism built in from the get-go, where it's almost like a 50/50, split between hitting it and missing it.
Like, it's gotta be realistic so that the team believes that they actually can do it. Some goals are just way too far ahead, and if people aren't really buying into the goal that they selected , you can already imagine how demotivating that might be on the team, and why they might come up with all sorts of excuses [00:10:00] why they aren't making the progress
And this is, again, now also a really interesting one.
How often are the goals And potentially also the lead measures as in the KPIs are selected at the top and then kind of filter down to the ranks below. Which means the ivory tower decided, and then it's up to the troops to go and fulfill. In this day and age, I can only say that that measure is very dated and that that approach is probably not the best way to engage your staff wholeheartedly. go back to the WIG session, the wildly important goal session. There you get your team to select the goal to strive for, the wildly important goal, and it might be two different ones or it might be level one and level two, the hairy audacious goal that Jim Collins spoke about, [00:11:00] right? So the wildly important goal and the hairy audacious goal, they kind of have that same thing, but getting clear about something that is both motivational, aspirational and, has a level of realism built in but also gets people to stretch themselves out of the comfort zone so that it's not like an easy win.
They will have to work for it. And there's a level of innovation required in order to do it because if we keep doing the same as we did last year, well, we might not hit that aspirational goal. So it's important that good workshops engage all of the stakeholders here and they're well orchestrated and working towards the same thing so that the goal and how we're gonna get there is workshopped together in the same time with the same people. I've found that every time when that process has been run really [00:12:00] well that the buy-in is guaranteed because people selected their goal, and they also selected how they are going to do it, what sort of activities they will prioritize over others, to how much level four, as in what's the metric they place on it, how many calls, how many hours they will spend on it per week, how many quotes they will, respond to, how many options they quote per quote, and so on and so forth.
once it's clear what the goal is and what the lead measures are, then we get clear on a number that we put on top of them, and then we start reporting back to the group using a dashboard that is purpose-built and where everybody is feeding their data into. Especially if that dashboard then reports all of the names against the key metrics that we agreed on as a team, you start finding that as people report on it on a week-to-week basis, people really rise to the challenge.
Because if it's like a traffic light system, [00:13:00] nobody likes falling behind or staying in red multiple weeks in a row. Because when that happens is they feel like they're letting the team down. If that happens for too long, they will either be asked to go or they will select themselves out.
And this is, of course, the beauty of these scoreboards. But the question that I have now for you is, is it possible that, one, your KPIs have been chosen from the ivory tower, and other people are now expected to buy in? That is not optimally designed. Two, is it possible that also the KPIs and the lead measures have been selected by someone senior, and other people are expected just to follow suit?
Third one then is, is it possible that there's overwhelm of number of metrics that people need to be accountable for on a day-to-day basis? Because if they have to report on four, five, six, seven, eight, [00:14:00] nine, 10, 11, 12 different things, it's overwhelm. You cannot expect people to hit all these things to an excellent level if there's that many things to measure.
It's been proven, tried, and tested that more than three measures to report on a week-to-week basis is drowning the team in complexity, and none of those measures will be hit with excellence. However, trimming it back to the top three, if not two, is ideal. That's where people can produce excellence on all of the metrics because all of their effort and energy is focused on those two or three things on a weekly basis.
As we are clear on what those things are, and they are indeed of high value and high impact, and it is within their control as a sales rep or a BDM.
That's when [00:15:00] putting one rep, two reps, three, four, five, and six across a whole team of multiple people, you can see that if they all are pulling in the same direction, that every single call, every single visit, every single quote, every single, conversation and meeting and demo, they all are building momentum over time.
And it also helps from a time management perspective for people to always do the things that are necessary and of high value. They might not have time for everything that is on their to-do list, but at least if it's all compacted and they know what has to be done, what are the non-negotiables, and what is of high value, they can do it week after week, and that way the whole team builds momentum over time.
As you see the weeks and months pass by, you see how that activity is building up [00:16:00] and how it's translating into results on the same scoreboard. And then what I've witnessed several times in a row with multiple teams in all sorts of industries, is that people start seeing the dots.
As they've done certain activities on a week-to-week basis, they started seeing then how that either helped or hurt the ultimate goal. As they did it, it helps, and as they fail to do stuff, or not at the level that was required, they start seeing the connection between inputs and outputs.
And as the penny starts to drop inside, then obviously the whole team rallies behind the activities that are making the difference.
So today's topic was all about KPIs. What sort of KPIs? And it's not always as clear-cut to just borrow it from somewhere where we've seen that it worked before and kind of implement it in one organization.
It's [00:17:00] worth taking the journey of exploration with an open mind, and then trimming it back to what makes most sense given the results we wanna produce and the industry and business we're in.
I'd love to hear more from you about your experience in setting KPIs and ultimate goals, and how do you actually get the buy-in with your team.
So any time when, you would like to comment, please feel free. If you would have a question, please also add that one here. Otherwise, I look forward to seeing you again in our next episode, and I do appreciate you always tuning in with us. Thank you so much. My name is Bram Lagrou, and I look forward to seeing you with the next Commercial Leader Podcast.
