The 4 P's of Leadership: Goals from Top to Bottom

You have created a real Business Plan based upon the strategic situation that you documented in your SWOT.  Great.  Now what?  The answer is to put that plan into action.  This will turn the near term parts of the Business Plans into actions on either you Products/Projects or your Processes.  Those actions need to have Goals and Objectives to be met.  That way that they can be monitored and course corrected.  Depending on the size of the organization this can be a simple or a complex exercise.

But no matter what, everyone needs to understand how they fit into the plan.  In large Businesses, this is cascaded down through different levels of Management.  In smaller Businesses, this can be a direct conversation.  Again, in either case there are 2 questions to be answered:

- What part of the plan am I responsible for and how will you know that I am delivering?
- What are the actions I need to take to execute my part of the plan and how will you know that I am doing them?

The answer to the first question is what is called a KRI or a Key Results Indicator.  We may track many things but within a Business Plan there will not be more than 3 to 7 measurements that are critical to the success of the Business.  Revenue, Gross Margin Percentage and Profit are three Key Results for everyone.  Any others are specific to the Plan and the Business.

But it is action that makes a Plan work.  And that is the answer to the second question.  It is called a KPI or Key Performance Indicator.  KPIs are trackers of action.  The idea is that if everyone performs the actions that can be measured by their KPIs then the Business Plan (and thus the Business) will succeed.  Let me give you a simple example that can help explain this.  Let's say that you want more Revenue.  You can do one of several things:  You can get more Customers;  You can sell Customers more things;  You can charge Customers more;  or You can sell Customers things more often.  That is pretty much the range of ways of raising Revenue.  If you are going to do one or more of these things, the Business will have to change (however slightly) for this.  The actions that you take to do this should be measurable. For Example: I will call on 6 prospects per day instead of 5.  The beauty behind a KPI is that it defines the action that you take, so you can control it. 

Many Business Owners and Executives struggle with KPI development.  This is something that I can help with as KPIs are critical to the success of a Business Plan in action!

Jim Sackman
Focal Point Business Coaching
Business Coaching, Leadership Training, Sales Training, Strategic Planning

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