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Thursday, April 17, 2008

The KPI challenge

The Lawrence Group in St. Louis, MO, is cited by Verne Harnish in Mastering The Rockefeller Habits as successfully applying many key business development/marketing principals. But some of the ideas outlined in the book -- even though they would have been relevant only five or six years ago -- now seem dated, indeed.

I continue to grapple with the question of the right Key Performance Indicators for our business. You may have the same challenge. The concept is to find an easy-to-understand, totally quantifiable,and truly 'fast' measurement of performance; one which relates to all of your employees and (by understanding its impact on your business) can lead to extremely enhanced performance. KPIs, my reading shows, are generally best if they are proprietary -- that is unique to the business -- and have extreme 'buy in' from senior management/the CEO as well as employees throughout the organization.

The other challenge, I see from the examples I've been reading, is that success in one KPI might come at the cost of resolving another issue -- or might be outside your business control.

And things can become dated, very quickly. And the second challenge is measuring a meaningful KPI when relationships are small in number, multi-dimensional across large numbers of people within client organizations, and subject to change as technology and client practices evolve. Theoretically, these challenges are addressed by focusing KPIs within short term (quarterly) goals within the framework of a truly long range vision and highly ambitious goals, but the reality is finding a way to implement invites distortion and 'gaming' if you are not careful.

As an example of the challenges here, consider the example of an AEC firm cited in Verne Harnish's Mastering The Rockefeller Habits. He describes the success of the Lawrence Group in St. Louis, MO, in attracting and retaining clients -- and points out the company's success in developing intensive client-focused websites to help manage projects. The concept, I suspect, might have been a true marketing advantage at the beginning of the decade, but I doubt many AEC firms would find much advantage in 'showing' clients how to set up a website these days.

Nevertheless, Harnish observes that the AEC firm found the website development business so effective that it set up a special division to provide these services to others, with the domain name reactone.com.

If you check that domain today, you'll find it is a site for the repossession industry. And the Lawrence Group has merged with Austin Tao & Associates.

2 comments:

davinet global said...

Hi

I think this post is very good contents in internet world.

My questionsis how we use KPI and BSC together for marketing and sales?

Other material of this subject: Marketing KPI

rgs

Mark Buckshon said...

I hesitated before 'clewaring' this comment but if you avoid the ads on the referring site (I wish I could remove them!), there is some useful material here.