Strategy 4 Saturday (<4-minute read)

• • Houston, we have a problem 
  • What are the Top 10 Business KPIs
  • CEO KPI Perspective
  • Houston, what have a KPI solution
  • Measure Success Podcast | Homeboy CEO | Thomas Vozzo
  • Coming up this week | Sr. V.P. Opportunity International | Mark Lutz
  • Read all our Blogs on our 40 Strategy Website 

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(Picture: PTS Advance, Strategic Facilitation in Houston)

Houston, we have a problem…

This past week, I was facilitating with PTS Advance on their strategic plan in Houston. This is a well-run company with an excellent, high achieving leadership team. They have had great success in the past; and now they are focusing on continuing their exceptional growth for their next 3-year plan. When asked about their KPIs, they identified over 20 KPIs that they wanted to track for success. But when we tried to identify what is the MOST IMPORTANT KPI, that’s when the magic started to happen… 

What are the Top 10 Business KPIs

On my flight back from Houston, Google provided me with 38,700,000 results in .38 seconds. Not bad from 30,000 feet.

I read through the top 10 Google article results and documented over 150 KPIs! Imagine how many more KPIs there will be after reading through the other 38,699,990 results. (Just kidding!)

The results included reputable sources such as Forbes, Investopedia, and Quickbooks. The entire list is included at the end of the blog with source links.

The point of this exercise is that there are lots of opinions from reliable sources regarding the most important KPI. However, I documented the number of times () that the KPIs were repeated in the Top 10 Articles to calculate the Top 10 Business KPIs.

Top 10 Business KPIs:

1.       Sales Growth (7)
2.       Profit Margin (6)
3.       Website Traffic (6)
4.       Market Share (5)        
5.       Click-through Rate (CTR) (5)
6.       Customer satisfaction score (CSAT) (5)
7.       Customer Lifetime Value (CLV) (4)
8.       Customer Acquisition Cost (CAC) (4)
9.       Net Promoter Score (NPS) (4)
10.   Employee Satisfaction (4)

If you are interested in receiving the list of the Top 150 KPIs, send me an email at carljcox@40strategy.com.

Source documents:

Manobyte.com 

Databox.com

Investopedia.com

Slingshotapp.io

Freshbooks.com

Forbes.com

Planetcompliance.com

Quickbooks.intuit.com

Socialchimp.com

Onstrategyhq.com

CEO KPI Perspective:

What would a CEO think regarding this Top 10 KPI list? Depending on what type of company you are running, you would probably say there are some missing metrics.                  

If you are working with a company who has private equity investors, they are most likely to say EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. This “gold-standard” measurement attempts to identify operating cash flow while ignoring interest, taxes, fixed asset depreciation, and intangible assets. One of the problems with EBITDA, is that you can have positive EBITDA while having negative cash flow.

If you are working with an entrepreneur who does not have outside investors, they are most likely to say how much cash they have in their bank account. Every good entrepreneur that I know has a very good understanding of their bank account, even though they may not know what their profit margin is.

If you are working with a publicly traded company, the CEO is most likely to say, EPS, or Earnings Per Share. These are the infamous quarterly results that you hear on CNBC with Jim Kramer.

Houston – We have a KPI solution!

What is most important is that you identify the KPIs that are going to have the greatest impact on your business. I like to say, this is how we bring the “K” or Key back in the Key Performance Indicator.

For PTS Advance this past week, we asked this key question, what is the most important lagging indicator for your key focus areas or strategic pillars? Second, what is the most important thing that you can do (and have primarily control) that will have an impact on the outcome? These are leading indicators.

It was through this exercise, that we were able to narrow our focus from x KPIs down to 10 KPIs. And for this client, this was their Top 10 KPIs.

If you are interested in identifying your Top 10 Business KPIs that are unique to your business, email carljcox@40strategy.com to schedule a call. 

(Picture: PTS Advance)

Pictured below, Family in Las Vegas to celebrate birthday (and game)

Measure Success Podcast  Thomas Vozzo | What CEOs can learn from a gang rehabilitation nonprofit  If you’re a CEO or organization leader… Do you ever feel like you get stuck in a “corporate” bubble?  KPIs. Board meetings. Quarterly revenues. Stuffy corporate leadership seminars.  But this week, I want to share a little advice from perhaps an unexpected source:   A gang rehabilitation nonprofit.  On this week’s Measure Success Podcast, I talked with Tom Vozzo — author, speaker, and Fortune 200 executive turned nonprofit CEO at Homeboy Industries, the largest gang rehabilitation and re-entry organization in the world. From team culture to leadership and successful business ventures, there’s a lot he can teach organization leaders — or any individual who wants to make the world a better place.  This episode is also a special “giving back” episode where we spotlight a charitable organization in advance of the holiday season.  Tune into the full episode at the link below or wherever you get your podcasts for more on what Tom has learned during his stint as a nonprofit CEO (and why those lessons are different from the corporate world), the genesis of Homeboy Industries, the simple solution to poverty in the U.S. that not enough people recognize, and much more. As our podcast and blog are free for you, here is the link to share with someone else to sign up.  Mark Lutz I Holiday “Giving Back” Episodes: How a Nonprofit Uses Micro-loans to Eradicate Extreme Poverty  Running water. Sanitation systems. Electricity. A car to drive to the store. Enough food to feed your family.  These are all things we’ve likely taken for granted at one time or another — and they’re things that so many in the world live without every day.  But thankfully, there are organizations like Opportunity International doing significant work to make a difference in those lives and eliminate that level of extreme poverty worldwide. And next week, as part of the Measure Success Podcast series of Holiday Giving Back Episodes, I talked with the VP of that organization about what makes this nonprofit so impactful — and the tangible difference they’re making in people’s lives globally.  Mark Lutz is the Senior Vice President of Global Philanthropy at Opportunity International. He joined the organization in 1986 and grew private annual revenue from $1 million to more than $40 million. Mark grew up in South Africa with his missionary parents. Living for 20 years under apartheid shaped him to become an advocate for justice. He’s also the author of “UnPoverty: Rich Lessons from the Working Poor.” Tune into the full conversation at the link below or wherever you get your podcasts for more on Opportunity International’s unique method of making a difference in impoverished people’s lives, personal stories from Mark’s book that display the valuable lessons he’s learned from those living in poverty, success stories from the entrepreneurs Mark’s organization has worked with, and a lot more. As our podcast and blog are free for you, here is the link to share with someone else to sign up.