Breaking down strategy KPIs to ensure strategy is effective and works
This final out take from an hour of discussion recorded exclusively for our Pivotal Marketer Community on Facebook (where the full recording is available) sees Mike Baxter strategy expert and MMC’s Rene Power covers key performance indicators for strategy and the three things KPIs should cover.
It’s the fifth and final in a series of serialisations on strategy. Scroll to the bottom of the post if you want to see them all in order.
So, yeah, application into this marketing space, I think is really important. Now there’s one I’ve come across called, is it AMP, A-M-P?
Again, thinking about this one and how it might work for some of the marketing focus people in the group?
Yes. So this is a way of evaluating key performance indicators. And there’s quite a few things that could be said about key performance indicators before we get into what makes a good one. So a key performance indicator is three words, but it’s also got three quite important messages.
Number one, it must be key. There’s no point in having a performance indicator, if it’s not key. And key means that are not hundreds of them. Key means there is a handful of key performance indicators, and these are a few like the litmus indicators of everything else that is going on in the business.
So key is quite an important word in key performance indicators.
It must actually relate to performance. It must be closely bound up with what we actually do. So if it’s to key performance indicator that affects you and I, then we must be quite clear that both you and I are able to do something that is going to change it.
So it’s got to be within our control and it’s got to be an indicator. It’s got to be a measurement. It’s got to be a good metric. It’s got to be something that is robust, that doesn’t widely fluctuate despite what we’re doing.
So those are the basics about key performance indicators. Think about the three words that make up key and performance and indicator.
But once you’ve got past that, then there’s another layer if you like, which is that they’ve got to be actionable, they’ve got to be measurable and they’ve got to be purposeful.
We’ve got to be able to move the metre. And there’s no point in having a key performance indicator that I am responsible for if I don’t have within my power, in other words, within my own actions and possibly the actions of my team, if I’m a team leader or the actions of my department, if I’m a department head.
The actionable part must mean that we have got not just the capability to move this indicator, but also the authority and perhaps the resource to marshal enough effort to move it.
So measurable. We’ve got to make sure that we understand what it is actually measuring. Is it a leading indicator? In other words, is it something that is indicating progress in the right direction, but we don’t care what it’s measuring.
What we’re actually measuring and the leading indicator is not what makes us money, or it doesn’t sell products, or it doesn’t make us profit.
But it’s an indicator of good stuff to come down the road, or is it a lagging indicator? And a lagging indicator is a measure of the good stuff that we wanted to achieve.
So it is a measure of good sold or a measure of money made or profit realised. So when you think about measurable, it’s not just has it got a kilogrammes or pounds or customers are bounced rate metric attached to it, but what does that signify in the business world? Is it a leading indicator? Is it a lagging indicator?
And then finally, it’s got to be purposeful that it’s got to lead me to get somewhere. It must be clear that if I do achieve my target on this key performance indicator, that it matters because how many key performance indicators do we hear about in business and you achieve them and you think, well, what did that do? It hit the target, but did it move anything else?
Did anyone else in the entire organisation care that I hit my target and you really need to build up a critical dependency? The action that I take should ripple out across the entire organisation and should make a difference to others.
So if key performance indicators are not purposeful, they’re no good. So if the not actionable the no, if the not measurable the no good. If they’re not purposeful, they’re no good. And if they’re not key or performance or indicators, they’re also no good.
It’s really interesting when you start thinking about this and applying it in all areas of a business, obviously we’re more focused towards the marketers in this group and helping them bring more value to their organisations and elevate the perspective of marketing within their organisation.
But you start thinking about things like HR and people strategy and job specs. How many jobs specs have you seen in the past where you replace key performance indicator for key elements of the role of the 65 things that they’ve got to do in this job.
Which actually are the most important needle moving vision driving things versus the things that just need to be done day in, day out for the good of the business and the good of the customer?
So you can start to see how, if you haven’t got this thing nailed at the top, the impact on an organisation could be quite stark.
Or even if you have, but the as you said, the adoption into each of those areas that didn’t have been understood it, and then applied themselves to it in the right way can be profound I’m sure.
I’m not sure that this is in the Guinness Book of World Records, but as far as my own personal world record is concerned, I met one poor unfortunate man who walked in a very, very large organisation who had 201 key performance indicators.
And I said, oh, how big is your team? And he said, no, no, no, they’re mine.
So anyone who’s listening, if you’ve got anyone better than that, I want to know about them because I really want to keep this world record going. So 201 is the one to beat, and I’m sure the person who has those 201, if they ever listened to this podcast, they will say, oh my God, that’s me.
That’s insane. I wonder with a lot of the work that you’ve done over the years, how often were you brought in to look at an organisation and how as an entity or how often were you brought in by somebody in a senior role like that guy, who’s like, I need some help to kind of get people thinking about approaching this in a different way?
Strategy and people
Yes. I do tend to make a point of steering clear of roles that involve lots of therapy because it’s not my strong suit. However, most of the time I am brought in for something that is not a great deal to do with people or organisations, because the issues there are either seem to be completely intractable – “or they’re just awkward people or I just don’t get on with them” – it’s not often translated into those.
That is something fundamentally wrong with the organisational structure or the way that the departments and teams are designed.
So very often the blame is laid at the feet of a piece of technology.
We can’t get this technology to work or we don’t have the data to do this. And the number of times that I’m taken in to try and resolve a problem that is seemed to be rooted in technology.
And it turns out not to be rooted in technology at all. It turns out to be, to do with the way the people are using it or not using the technology and how the organisation is passing the data from that technology from one party to another.
So very often organisations tend to be happier, in my experience, blaming something inanimate as being the source of their woes and just treating the people problems that they have as either intractable – I can’t do anything about them – or so hard that they don’t even know where to begin to try and tackle them.
So I think that things are changing. People who were traditionally considered to be HR people and are now usually thought of as people teams are being much more strategic.
So the professionals in this area, the people focus professionals are becoming much more involved in strategy and recognising that we’ve got to get people behind the strategy, if it is going to have an impact as we talked about earlier.
Brilliant, okay, we are coming up on the hour. We’ve been dealing with questions as well as we go. And any other questions or comments for Mike do drop them into the chat and we’ll pick up on those in the next minute or two.
Key takeaways from this session on strategy
I’m thinking of takeaways [from this whole series of posts – check footer for further reading and videos] for these guys and I’m thinking there’s maybe an opportunity for them to go away and try and find if they don’t know what it is and understand what the strategy is in their business.
First of all, we got a good one, if it’s clear and where that function might fit within that in terms of if you know the things you’re doing on a daily, weekly, monthly, annual basis feeding into helping the business go in the right direction. I think that’s probably a good place to start because then that’s where you’re going to add value to the business in your own way.
So yes that’s definitely one, I think the second one is to look at those models we’ve talked about today, the house of strategy and the AMP, which is what as I said, I stumbled across that one. I thought that was a really interesting way to look at because it covers quite a lot of ground, doesn’t it. It covers prioritising the right stuff, the important stuff and making sure that it’s stuff that is adding value to the greater strategy. And then a third one I guess we have to put a link in the chat. If you want to get access to those models you have some of them freely available through the website.
Yes. So I’ll come back and say a little bit more about models in a moment because I think people don’t necessarily get it when we talk about models about what these models actually are and what they’re for, but just before we get there, yes jump onto the website, G-O-A-L, atlas, A-T-L-A-S.com. And you will see a sign page on just about every page of the website.
So if you sign up there, you will get links to all the models as soon as they’re produced. There’s also a page with all of the strategy models there.
All of the models we have decided we are releasing on Creative Commons. So you can download the images. You can put them into your own PowerPoint presentations. There are PDF templates that you can fill in. So it’s like a little resource pack on these models. So yes, by all means, sign up to them and get all the models in Creative Commons.
If they want to go deeper, the book is available on Amazon, isn’t it?
It is available on Amazon and that kind of glues them all together. But let me just say a little bit about what the models are, because we kind of touched on it a bit, but when we talked about both the house of strategy and the AMP model, you can use it in two really quite different ways.
Firstly, you can use it as a diagnostic tool.
So if you’ve got vision and mission and strategy, you can analyse them using these models. You can take them and you can tease them apart. And the models will help you tease apart vision, mission, volume, and strategy or the AMP aspects of KPIs.
So it’ll fulfil a diagnostic role, but the more exciting one for me is that it will actually help you create. So it will actually help you devise a vision, mission, values, and strategy that are coherent.
And most of the models have these kind of two sides to them. They can be used as a sort of diagnostic analytic guide. How do I take this thing and tease it apart and try and make sense of it in a way that I can communicate back to my boss or to my team.
And secondly, how can I create stuff that is coherent, it is systematic. It is evidence-based, it is structured. And I can show it in a picture that actually could go on the wall or I can put it in my PowerPoint presentation and say here’s how I’ve analysed it. Here’s how I’ve created it. Here is what I think the answer is to this particular problem.
So that’s what the models are. They’re visualisations of how to analyse something and how to put something together.
Brilliant. So it’s goalatlas.com. And you look for the sign up button on that. And then there are emails that will give you various downloads and things.
Mike it’s been an absolute treat for me. I’m working with a couple of clients at the minute where we need to go back to basics on some of this and really think some of this stuff through.
So I’ll be one of your first sign ups for sure. And some great takeaways in that. And I think there’s some good things we can come back to and revisit over the coming weeks and months in this group. It’s nice embryonic group at the minute. It’s just taking shape and it’s going to grow and grow and more people are going to get more comfortable with this sort of content.
But it is the Pivotal Marketer Community if you’re going to be a pivotal marketer. These are the sorts of things that we need to be thinking about and acting on in our businesses because they will be the things that differentiate you as a pivotal marketer from dare I say an average one.
So it was a pleasure, Mike and hope a few of you go along and download those things and follow Mike on LinkedIn. And I’m sure all the other places as well. Thanks very much for your time today.
Great to talk to you. Cheers now Rene.
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Recommended further reading
- Part 1: Understanding what strategy is and how to create strategy that means something to people who have to implement it
- Part 2: Defining strategy and ensuring it is consistently implemented
- Part 3: The difference between strategy and strategic plans (and the impact on marketing)
- Part 4: Getting creative with strategy and understanding the key elements
- 10,000 hours to become an expert
- Why the T-shaped marketer is a critical thing to understand for your career and development
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