Most management meetings include a recital of the latest Key Performance Indicators (KPIs) for the business. As they are read out loud, some take notes and others nod their heads. A few questions are asked and once complete, the meeting proceeds to the next agenda item. Wait, what just happened? If you run a company whose KPI’s are off the charts to the good, you can stop reading at this point. For the others, this is a chance to take what you hear and see and turn these reports into actionable steps for improvement.
Leading vs. Lagging KPIs
Your KPI’s are undoubtedly a mix of both leading and lagging indicators. In their simplest form, leading indicators are those that help you predict what’s going to happen. Lagging indicators are a report of what has already happened, historical information.
An example of a leading indicator could be how well your business nurturing program is performing and how many meaningful conversations your sales team has had with new and existing opportunities. They could also be a measure of how many unique visitors you’ve had to your website in response to the content marketing efforts the company has invested in.
A report on the percentage of chargeable hours in your pressroom last week is an example of a lagging indicator. How many estimates you did and how many jobs booked in yesterday by themselves are lagging indicators.
Trends and Snapshots
The examples that I mentioned above are all important, but they need to be taken in context. Were they snapshots of a moment in time, or were they reflective of a trend that is occurring?
If the percentage of chargeable hours in the press room last week was 81%, was that good or bad? By itself, we don’t really know. Is this number trending up, trending down, or is it flat? How is it in reference to the goals that you had for the department?
Most companies have all the information they need to make good decisions, sometimes it’s just a matter of looking at it in the correct format. It’s not that different than comparing your financial performance on this month’s P&L to last year, and to your projections. Snapshots are interesting, but trends allow you to chart a course of action.
Action Steps for Improvement
Years ago, the National Association for Printing Leadership (NAPL) offered a program to track KPIs. They identified 13 vital performance indicators for commercial printers. Companies could sign up (free) and enter their KPIs into the database. They could now see their vital indicators graphed, over time to reflect changing trends. More importantly, each company could compare their results to the group. And while the company identities were anonymous, an owner could see if they were leading the pack, in the middle or a laggard.
As our industry continues to evolve, it’s apparent that many who consider themselves commercial printers, don’t really have as much in common as they once did. I like to compare the performance of a business not so much to others, but to its potential.
The results you experience should align with the investment you’ve made in your staff and equipment. For example, as you invest in building a lights out workflow, you should also raise the level of performance that you expect.
Take stock of the leading and lagging vital metrics that are important, and unique to your business. Be sure to include both a snapshot and the trends when reporting KPI’s. And finally, take action on the trends so that your results will meet your expectations and allow you to thrive in a transformative industry.
Mike Philie can help validate what’s working and what may need to change in your business. Changing the trajectory of a business is difficult to do while simultaneously operating the core competencies. Mike provides strategy and insight to owners and CEOs in the Graphic Communications Industry by providing direct and realistic advice, not being afraid to voice the unpopular opinion and helping leaders navigate change through a common sense and practical approach. Learn more at www.philiegroup.com, LinkedIn or email at firstname.lastname@example.org.
This blog originally published in Printing Impressions