As the teams are rushing to hit quotas in these last few weeks for the years (or get business ready to fall in January), you, as commercial leader, are or should be busy setting the KPI’s for next year.
This is the time of year you spend looking at Excel, pulling data from CRM and your finance team. To make sure you don’t set yourself and your teams up for failure and endless discussions, here’s a checklist for your KPI’s before you publish them.
Do you have a balance of leading and lagging KPI’s? Leading KPI’s will give you early warning signs; lagging KPI’s will be 100% clear on whether you hit or missed the target. More here.
Is it clear what you are measuring and how? Which products are you measuring, which countries, which channels? Is Services included? Spare Parts? What currency against what rate? These are things that need to be 100% clear. I’ve been in a situation where the target was EU28, the actuals were EMEA and it only became clear in November – that hurts when your variable compensation is based on this KPI 😉
Is the KPI meaningful and actionable by the team? And only to a certain extent, let’s be clear about that. Example here is lead-qualification rate which is partly a quality metric for the marketing team but also a productivity metric for the Inside Sales team. If the number is below plan, what do we do? Who owns the problem-solving and counter measure?
Do the KPI’s align with other teams downstream and the leadership upwards? It can be frustrating to work for a KPI that doesn’t align with your colleagues, your boss or the rest of the organisation.
Does the KPI relate to Company KPI’s, TTI’s or Core Value Drivers? Teams need to know and understand how their work contributes to the larger whole. If not, this can be demotivating.
Are we clear on how the data will be pulled, when and by whom to populate the actuals? Many commercial people can pull data in many ways. Have your CRM-team or Finance team pull all data on company-wide aligned definitions. No exceptions
