© Copyright Gazelles Systems, Inc. 2006-2011 1 Metrics Targets, KPIs & Critical Numbers Execute For Growth

© Copyright Gazelles Systems, Inc. 2006-20111

MetricsTargets, KPIs & Critical

Numbers

Execute For Growth


Metrics1. Targets: Future Goals

2. KPIs: Key Performance Indicators

3. Critical #s: Drive Priorities


Leading vs. Lagging Indicators

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Leading indicators GUIDE you.

They give you a glimpse into the

future and help you see where you

need to make adjustments.

Lagging indicators REPORT the

results. They let you know where

you ended up. They are driven by

your leading indicators.


Targets

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A handful of goals/results that you

set and strive to achieve over a period of time.

Examples: Annual Revenue, EBITDA,

# of CustomersAre always Lagging Indicators


KPIs: Key Performance Indicators

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Ongoing metrics that track and measure the health of the company

over time.

Examples: On time delivery, Client

Health Indx, Net Promoter Score, QualityCan be Leading or Lagging Indicators


Critical #s

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Metrics designed to drive a company priority that will

be highlighted for a specific period of time for the purpose of making an

improvement in the company.

Examples: could be any of your KPIs

or something newShould always be Leading Indicators


KPIs & Critical Numbers should:

• focus us on the right things

• provide insightful information on

important areas of the business

• show us where we need to make

adjustments, before it’s too late

• be Leading Indicators whenever

possible

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How to Find Your Leading Indicator

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1. What is your desired outcome?

2. What causes that outcome?

3. Ask How/What/Why 4 to 5 times.

Begin with the end in mind then peel back the layers of

the onion


Example

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1. What is your desired outcome?• $X Monthly Revenue

2. What causes that outcome?• Monthly Revenue is caused by closing deals. To create $x Monthly Revenue, we

must close 20 deals

3. Ask How/What/Why 3 to 4 times.• How: We close 20% of strong leads, so to close 20 deals, we need 100 strong leads.

• What: To get 100 strong leads, we need to generate 500 qualified leads.

• What’s the criteria for a qualified lead: prospect who has accepted a meeting and has

a budget

• How can we generate 125 qualified leads every week?

KPI = # Qualified Leads every week


KPI Examples

Employee• Turnover

• Strengths Survey Index

• Employee NPS

Customer• NPS - Net Promoter Score

• Client Health Index

Shareholders• Price/share

• # Months cash runway

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Make / Buy/ Deliver

• Quality / Bugs

• Supplier mistakes

• On time deliverySell

• Sales actual vs plan• # Qualified Leads

Records (Finance)

• A/R Days

• Cashflow

Relationships/People Productivity/Process


Red/Yellow/GreenSuccess Criteria

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• Green: Success: what’s our goal?

• Red: Unacceptable: When do we have

a real problem?

• Yellow: Between Red & Green: this is

your warning sign – time to act before

Red

• SuperGreen: Time to Celebrate!


Use the KPI Creator Tool

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1. What is your main business

problem?

2. Desired outcome?

3. Questions?

4. Leading Indicator with R/Y/G

5. Corrective action plans for

Red & Yellow results


Pitfalls to Avoid

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1. KPIs for KPIs sake…. “not sure who

uses this, but we’ve always measured it.”

2. Running the business with all

Lagging Indicators…. and thinking

you can effect the future

3. Too many KPIs in one category Limit to 1 - 3 max

Documents

© Copyright Gazelles Systems, Inc. 2006-2011 1 Metrics Targets, KPIs & Critical Numbers Execute For Growth