EO New Jersey Oct 2014

EO New Jersey Oct 2014
EO New Jersey - Oct 2014 Management in the Digital Age PRESENTER: Stephen Lynch Twitter: @StephenLynch @RESULTSdotcom Email: Stephen.Lynch@Results.com
Agenda Management in the Digital Age The way we manage our businesses is struggling to to keep pace with the rate of change. We need to reinvent management Radical Transparency & Accountability What works and doesn’t work in terms of setting goals and holding people accountable - based on direct observations of thousands of client firms Key Performance Indicators How to define and track the key measures that will drive the success of your business model,
MANAGEMENT in the digital age
“This is a fantastic time to be entering the business world, because business is going to change more in the next 10 years than it has in the last 50” Bill Gates
18,446,744,073,709,551,615
“We’re in the second half of the chessboard”
“In short, software is eating the world.” Marc Andreessen
“Digital Darwinism” (when technology and society evolve faster than your company’s ability to adapt)
“It is not the strongest who survive, nor the most intelligent, but the ones most responsive to change”
“We are going to have to reinvent management; the way we lead, we plan, we organise, we hire, we motivate... because today, organisations are facing a set of challenges that are truly unprecedented." – Gary Hamel
TECHNOLOGY change
Taxi rides
What major technology changes will impact your industry?
SOCIETAL change
I like the people I work with. Someday I’ll meet them in person.
13% more productive 50% higher retention workplace FLEXIBILITY
company-wide goal ALIGNMENT Company goal Team goal 1 Individual goal 1 Team goal 2 Individual goal 2
Baby Boomer 1946 -1964 Generation X 1965 - 1980 Millennial / Gen Y 1981 - 2000 Key life influences Cold War nuclear threat, NASA, Vietnam, Civil rights, Drug culture, John Lennon AIDS, Divorce, MTV, Cold War ending, Heavy Metal, Personal computer, Bill Gates Internet, Always connected, Share everything online, Apple and Google Work environment Long hours, Office only Office, Increasingly working from home Office, Home, Wherever, Desires flexible schedule Work ethic Workaholic, Quality focus, Team player Clear direction, Get tasks done, Self reliant, Free agent Entrepreneurial, Variety, Multitasking, What’s next? Management style Hierarchy, Chain of command Everyone should manage themselves, Challenge people Collaboration, Consensus Personal Motivators Salary, Job title, Feeling valued and respected Money, Freedom, Break the rules and do it your own way Meaningful work, Work with creative people, Maintain personal life Mentoring Does not like feedback. Does not take negative feedback very well Does not think feedback is necessary. Will ask for it if wants it Wants constant feedback, on demand at the push of a button Internal communication Face to face meetings focused on process, Memos Face to face meetings focused on results, Emails Face to face participative discussions, Emails, Collaboration software Client communication Face to face, Phone Face to face, Phone, Email Email, Social Media, Instant messaging Career Goals Climb the ladder at one company, Job security Build transferable career with variety of skills & experiences, Build a business. Build several parallel careers or businesses simultaneously
What major societal changes are you experiencing?
MANAGEMENT must change
“We are going to have to reinvent management; the way we lead, we plan, we organise, we hire, we motivate... because today, organisations are facing a set of challenges that are truly unprecedented." – Gary Hamel
Industrial age CUSTOMIZED STANDARDIZED Network age LABOUR: obedience systems processes productivity TALENT: initiative innovation creativity passion Management 1.0 Management 2.0
18% actively disengaged 52% not engaged DISENGAGED 30% engaged 70% of employees are
[1] Renaissance Solutions Survey, 1996 [2] Kaplan and Norton, Harvard Business School Press, The Strategy-Focused Organization, 2001 [3] Strategy & Leadership Journal, May/June 1999 [4] Covey and Whitman , Predictable Results in Unpredictable Times, 2009 MANAGEMENT 1.0 is NOT WORKING ▪ 92% of organizations do not measure KPIs ▪ 90% of strategies fail due to poor execution ▪ Only 27% of employees have access to their company strategic plan ▪ Only 5% understand their company strategy ▪ Only 15% of employees know their company’s top priorities ▪ Only 6% of employees know their own priorities
GOALS & TASKS ▪ 70% of employees want regular conversations about their Goals with their manager ▪ But, only 36% of employees report their managers are having such conversations ACCOUNTABILITY & RESULTS ▪ 67% of employees want regular performance feedback from their manager ▪ But, only 29% report actually getting feedback on their results from their manager EMPLOYEES WANT MORE FEEDBACK [1] Training Magazine - July 2013
[1] Harvard Business Review, May 2014, Your Scarcest Resource MEETINGS are NOT WORKING ▪ 15% of an organization’s collective time is spent in meetings ▪ 67% of meetings are rated as “ineffective” by managers ▪ 92% of people admit multitasking during meetings (checking email, unrelated work) ▪ $37 Billion wasted on unproductive meetings per year in the USA
We leave the manner of accomplishing the mission to the soldier, allowing them the freedom to take whatever steps deemed necessary based on the situation. The leader prescribes the method of execution only to the degree that is essential for coordination
Transparency drives results
Radical Transparency
Traffic light concept RED Unacceptable performance standard YELLOW Watch closely. Need help? GREEN Target performance standard
In the past we used spreadsheets
SPREADSHEETS don’t engage people
Now we use software + multiple integrations
How do you make performance transparent in your organization?
Always aim for the STARS, if you miss… ..you’ll at least reach the moon
CELEBRATE small wins
What % of the time do your people achieve their Goals? If not “most of the time”, what do you need to do differently?
company-wide COMMUNICATION + COLLABORATION
your company’s SHARED VISION + STRATEGY
company-wide goal ALIGNMENT Company goal Team goal 1 Individual goal 1 Team goal 2 Individual goal 2
Key Performance Indicators
Projects + Tasks
See how other teams are PERFORMING
Drill down to identify ISSUES
Looks like someone is struggling GOALS MISSED?
What’s happening here? LET’S HELP…
Assign a TASK to address the issue
Good data drives good meetings
What have you learned from introducing technology change in your organization?
“Drivers” vs. “Enhancers” Drivers ● Task-focused managers ● Set high standards ● Push people to go the extra mile ● Keep employees focused on high priority Goals and Tasks. ● Focus on getting things done. Enhancers ● People-focused managers ● Build strong relationships and trust ● Give encouraging feedback ● Keep employees happy & motivated. ● Focus on taking care of people Which style of manager are you? Which style of management is the most likely to increase employee engagement?
1 on 1 Meetings
1 on 1 Meetings ● Booked in calendar every week. 30 minutes max ● Dashboard data must be updated ● Status update on Goals & Tasks Reinforce focus and accountability ● What’s happening here? Weed the garden ● What next? Capture Tasks in software & follow up ● What support do you need from me? ● How are you feeling? ● Finish with praise and encouragement
What do you need to do more of (or less of) in order to practice the 5 to 1 ratio?
MEASURE THE RIGHT KPI’s
Tropical Island Test Questions / Answers: #realKPIs || @RESULTSdotcom
… Imagine this… Questions / Answers: #realKPIs || @RESULTSdotcom
Business Model / Industry KPIs (example) Questions / Answers: #realKPIs || @RESULTSdotcom
Business Model / Industry KPIs Questions / Answers: #realKPIs || @RESULTSdotcom
KPI Tables Worksheet Table Available: http://bit.ly/KPI_Tables
The 4 Gears
KPIs - The 4 Gears Questions / Answers: #realKPIs || @RESULTSdotcom Create leads Convert leads into sales Provide product / service that delights customers Grow cash & make a profit
Outcomes are good, but what drives them? Activity Effectiveness Questions / Answers: Outcome #realKPIs || @RESULTSdotcom
Convert leads into sales Questions / Answers: $ Sales #realKPIs || @RESULTSdotcom Outcome Activity Effectiveness # phone calls # appointments booked # sales presentations % who attend presentation % who buy at presentation
Scope out your KPIs (example) Questions / Answers: #realKPIs || @RESULTSdotcom
KPI Hierarchies (roll ups) (example) Questions / Answers: #realKPIs || @RESULTSdotcom
Single Point Accountability Questions / Answers: #realKPIs || @RESULTSdotcom
Questions / Answers: The sniff test: #realKPIs || @RESULTSdotcom
Questions / Answers: #realKPIs || @RESULTSdotcom
Team / Functional Area KPIs Questions / Answers: #realKPIs || @RESULTSdotcom
KPI Hierarchies Questions / Answers: #realKPIs || @RESULTSdotcom
Marketing KPIs (sample) What it is Total Leads Lead shows the total raw number of leads being created by your marketing endeavors Marketing qualified leads Marketing Qualified Leads (MQL) tracks the number of Leads that meet the qualifying criteria as being an ideal target market customer for your offering, based on information known about the lead Sales qualified leads Sales Qualified Leads (SQL) tracks the number of Leads that have been qualified as interested in your offer, and potentially "ready to buy" within the desired timeframe Cost per sales qualified lead Cost per Sales Qualified Lead measures the average cost required to get a lead to the sales team for further contact from the sales team. It is calculated by dividing total marketing spending by the number of new SQLs generated. Sales by lead source Sales by Lead Source measures the sales generated by each available sales source (e.g. reseller, affiliate marketer, search engine, client referral). : Click-Through Rate Click-Through Rate measures the rate at which an ad or link on a landing page is clicked relative to the number of times the ad or page is shown (impressions). It can also measure the success of an online advertising campaign for a particular website as well as the effectiveness of an email campaign by the number of users that clicked on a specific link. . Cost per conversion Cost per Conversion measures the average cost incurred to acquire a lead or sale through an advertising campaign. Total Impressions Total Impressions measures the total number of times an ad is displayed, whether it is clicked or not. Each time an ad is displayed it is counted as one impression. New Subscribers Subscribers tracks the number of new subscribers to defined media content. Website Visits Visits tracks the total number of visits to a website. One visitor can account for multiple visits. Visitor bounce rate Visitor Bounce Rate the percentage of visitors who enter the site and "bounce" (leave the site) rather than continue viewing other pages within the same site. Page views Page Views tracks the total number of times a web page is viewed by visitors to a website.
Scope out your KPIs (example) Questions / Answers: #realKPIs || @RESULTSdotcom
Sales KPIs (sample) What it is Appointments booked Appointments books tracks the number of appointments made with Sales Qualified leads in the period (typically per week). Sales presentations given Sales presentations tracks the number of sales presentations your sales team actually delivered to Sales Qualified leads in the period (typically per week) Sales made Sales tracks the number of sales made, or the $ value of sales closed in the period (typically per week) Average Sale Value Average Sale Value shows the average amount spent by customers Sales Qualified Leads (SQL) to Sales conversion Sales Qualified Leads (SQL) to Sales Conversion measures the number of sales as a percentage of Sales Qualified Leads. Presentations to Sales conversion Presentations to Sales Conversion measures the number of actual sales made as a percentage of sales presentations given Cost of Customer Acquisition Cost of Customer Acquisition measures the cost to acquire a new customer. It takes into account both the marketing and sales costs, divided by the number of sales made. Sales Pipeline Sales Pipeline displays the estimated $ value of Sales Qualified Leads in the pipeline that are expected to purchase within the desired timeframe - based on existing sales qualified leads conversion rates Sales vs. Last year Sales vs. Last year compares last year's sales to this current year's sales over the same weekly or monthly period, typically expressed as a % Customer orders Customer orders shows the number of orders placed , or the $ value of orders placed Upsells Upsells shows the value of sales made to existing customers during the period.
Operations KPIs (sample) What it is Customer Satisfaction Customer satisfaction is a survey measure of how well your customers are satisfied with your product / service by aggregating the results of satisfaction surveys sent to customers. Net Promoter Score is commonly used here Lost customers Lost customers shows the number of customer accounts that have been lost due to other competition, dissatisfied customers, or any other reason. Customer retention Customer churn measures the proportion of contractual customers or subscribers who remain customers during a given time period. It can be based on the % of customer accounts retained, or % of "existing customer revenue" that is retained Customer churn Customer churn measures the proportion of contractual customers or subscribers who were lost during a given time period. It can be based on the % of customer accounts lost, or % of "existing customer revenue" that is lost. In the case of revenue churn it is possible to have "negative churn" if upsells to existing customers exceed lost revenue from customers who terminate Complaints Complaints show the number of customer complaints Support Tickets Support tickets show the number of customer requests for support Average response time Average response time measure how quickly you respond to customer support requests Deliveries In-Full and On- DIFOT shows what percentage of orders has been fulfilled successfully Time Return Rate Return Rate shows the rate at which products returned to due to damage or dissatisfaction Cost of Inventory on Hand Cost of Inventory on Hand shows the current cost of the inventory owned by the company in its various stages. The inventory stages are Raw Materials, Work-In-Process, Finished Goods, and In Transit. Inventory Turnover Inventory Turnover shows the number of times inventory is sold or used each month during the period. Inventory turnover is also known as inventory turns, stock turn, stock turns, turns, and stock turnover. Labor Costs Labor costs is usually calculated as a percentage of revenue. It includes all expenses associated with employees, including wages, insurance, taxes, and benefits
Finance KPIs (sample) What it is Gross Profit Margin Gross Margin measures difference between revenue and the cost of making a product or providing a service, before deducting overhead, payroll, taxation, and interest payments. Net Profit Margin Net profit margin is the percentage of revenue remaining after all operating expenses, interest, taxes have been deducted from a company's total revenue. Accounts Receivable Days Accounts Receivable Days (also known as Days Sales Outstanding or DSO) shows the average number of days that a company takes to collect revenue after a sale has been made. Monthly Recurring Revenue Monthly Recurring Revenue (MRR) is a measure of the predicable and recurring revenue components of your subscription business. It will typically exclude one-time and variable fees. Annual Recurring Revenue Annual Recurring Revenue (ARR) is a measure of the predicable and recurring revenue components of your subscription business. It will typically exclude one-time and variable fees. Customer Lifetime Value Customer Lifetime Value (LTV) assesses the average financial value of a customer. The present value of the future cash flows attributed to a customer during their relationship with the company Average Subscription Days per Customer Average Subscription Days per Customer shows the average number of days customers have been subscribing to the product / service Cash Balance Cash Balance measures the amount of cash contained in company bank accounts. Cash Burn rate Cash Burn rate is a term synonymous with "negative cashflow". It is the additional capital that needs to be injected per month to finance operations. For example, a burn rate of 1 million would mean the company is spending 1 million of capital per month to stay afloat. Cash Runway Cash Runway is the amount of time until your cash runs out, assuming your current income and expenses stay constant. Typically calculated by dividing the current cash position by the current monthly burn rate.For example, if a firm that's not generating profits is burning $20,000 per month and has $100,000 in the bank, it has a "runway" of five months. Revenue per employee Revenue per employee is a measure of how efficiently a particular company is utilizing its employees. Divides revenue by the number of employees. Revenue growth Revenue growth represents the percentage growth in a company's revenue, often measured over the trailing 12 months
Individual KPIs Questions / Answers: #realKPIs || @RESULTSdotcom
What’s your number? Questions / Answers: #realKPIs || @RESULTSdotcom
Individual KPIs Questions / Answers: #realKPIs || @RESULTSdotcom
Individual KPIs Worksheet Table Available: http://bit.ly/KPI_Tables
By what day each week / month will the KPI data be posted? What 1 person will be accountable to post this data? Questions / Answers: #realKPIs || @RESULTSdotcom
Review KPI performance thresholds every quarter Questions / Answers: #realKPIs || @RESULTSdotcom
#1 Regret of Business Leaders They wish they had dealt with poor performance sooner! Questions / Answers: #realKPIs || @RESULTSdotcom
“He that is good for making excuses is seldom good for anything else.” Benjamin Franklin Leaders owe it to the organization & their fellow workers, not to tolerate non-performing people in important jobs – Peter Drucker “ Questions / Answers: #realKPIs || @RESULTSdotcom
“Accountability is meaningless without consequences” … Questions / Answers: #realKPIs || @RESULTSdotcom
Review your performance thresholds Questions / Answers: #realKPIs || @RESULTSdotcom
KPIs – getting it right
A COMPLETE SOLUTION FOR SMB RESULTS focused management dashboard IDENTIFY WHAT’S HAPPENING IN YOUR BUSINESS RIGHT NOW VISIBILITY INTO WHAT DIFFERENT PEOPLE AND TEAMS ARE WORKING ON IDENTIFY WHICH AREAS ARE WORKING WELL AND WHICH REQUIRE ATTENTION UNDERSTAND WHO’S EXCELLING AND WHO NEEDS HELP
JOIN THE CONVERSATION ONLINE #RealKPIs PRESENTATION AVAILABLE POST PRESENTATION: www.RESULTS.com/slides
FOR CEOs and business leaders of fast growth SMBs WHO are trying to take control of their business, engage their workforce, and achieve extraordinary RESULTS OUR PRODUCT IS A RESULTS focused management dashboard THAT PROVIDES transparency into your entire organization from company-wide strategic goals to individual tasks UNLIKE other software providers, we offer SMBs the complete suite of tools to manage their business and engage their team OUR PRODUCT engages your workforce to accelerate your success OUR PURPOSE to end employee disengagement by reprograming management

EO New Jersey Oct 2014

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EO New Jersey Oct 2014