Dec 29, 2023
During a recent EBFACAFAM ( Employee based fraud anti corruption and fraud awareness meeting ) Hold on!! I am just kidding.
At some meetings when I go to a company to consult or implement a program for anti corruption and employee based fraud prevention I am often asked if I can offer any other business assistance. Such as create and setup a system to report on the latest set of Acronyms of the month.
Let me say being on the sharp end of the stick made me very aware of the way certain things work in a company and how data can be paramount in how a company grows responsibly and can ensure it is making solid, qualified and quantified decisions also.
Many will have a “wish list” of acronyms. The first thing I do is determine where they are getting the list from? I also need to make sure they know what they are and what they are usually for.
I try to do this without insulting anyone or making anyone feel , well dumb…
I need to know if they have anything like this in place and where will we find the data needed to properly run reports and feed these hungry acronyms ?
Who is asking for them and what will they be used for?
Is the objective and goal clear? Is it simply fluff for colorful spreadsheets and dashboards for a quarterly board meeting or will it be used going forward.
Nothing worse than generating. Or trying to generate reports from non existent data or poor data. Well maybe when it’s setup and never used , only shown at the quarterly meeting for smoke and mirrors! its like washing and vacuuming your car and then someone sitting in it with muddy boots!
So I say , ask early and be specific to save the headaches later.
First of all , does the company have access to data needed for what is being asked for? If not, we need start with that. We may be limited, but at least going forward we can utilize it .
If there is data, can to be counted on ? What will you do with the results?
Again , don’t forget to ask the question. Is it for a Dog and Pony show or is it for a beneficial use with buy-in from the teams?
KPI’s or KEY PERFORMANCE INDICATOR
A KPI is a quantifying calculation or measurement of how a company performs. It can report on how either a project, an overall division of a business or even how a specific group or section of the company is performing.
The way it works fundamentally is by comparing performance against a set of goals and/or objectives.
Sometimes a KPI can assist individuals or investment companies decide if they
should invest in your business or if they are already involved, if and when they should plan to sell.
A KPI is a goal that you work towards achieving. In most companies, KPIs are usually tracked daily, monthly, or quarterly.
Let’s say ,the goal for the new year is to add 1000 new customers for your Window Frame Division (WFD). So, in this particular case, the tracking goal simplified is : Number of new customers for WFD sales.
A KPI done efficiently can be very beneficial. There needs to be a specific , clear cut goal. If you can get the buy in from employees , it can boost employee motivation and even morale in some cases.
Adding incentives when milestones are reached is good for team building. They can also analyze historical patterns or trends. Over time , Knowing what may be on the horizon based on past trends can add a sense of security and the feeling of being in control. Good reliable data in a KPI can expose strengths and weaknesses to see what needs to be worked on and what is in line with your objectives.
Going one step further , adding a SWOT (Strengths, Weaknesses, Opportunities, and Threats) inside a KPI can show you what areas you need to put more effort into s a technique that summarizes all major aspects of any business.
When having a SWOT in say a customer satisfaction survey on a KPI can expose areas you had no idea were weak. This can result in customers not being satisfied. without the report, you would never know and lose business potentially.
Example of a SWOT
Strength: List all the positives or promoters and what they like about your product Weaknesses: List all the negative comments and you may unveil your customers specific issues
Opportunities: Task the team to improve on the area of the company that raised negative reviews . Improve a product and make it a goal to satisfy these customers in the future. Let them know, it ships you care and may win you loyalty as a result Threats: If there are online reviews. Pull them for the report and determine if customers will leave to use a competitor or not.
If you have a rich and wise database, I mean it is large and been around for a while with data that is clean and correct.
You can and will see patterns over time. You can see customer satisfaction getting better in areas and possibly worsening in others .
If you have an E-commerce presence perhaps knowing when and the amount of times a shopping cart is abandoned or left with items in it but the sale not finalized can give you an actions to take? Maybe it is simply the shipping module is confusing. At least you know and can fix that.
Have you ever got an email after you abandoned a cart?
See, it can work very well in this case where you have an active potential sale in that abandoned cart and if you can contact the customer quickly and turn it into a sale . Well, that is amazing!
These two get confused with each other sometimes . OKRs are metrics that align with bigger picture objectives in common with key results. KPI’s are usually stable. Whereas OKRs are bolder, and used normally for big-picture targets. To try to simplify : OKR is a tactical plan within which KPIs are a group of calculations and measurements OKRs are used best for a management framework used to set goals and identify calculable metrics in order to track the companies progress toward hitting the targets and succeeding.
Here is a loose… OKR Example for a marketing group within a company.
Objective: Increase a specific brands awareness Key Results
KR#1: Get the new customer loyalty and client referral program up and running by July 1
KR#2: Increase the average click-through rate by 22% by end of first 3 months ( end of Q1)
KR#3:Increase the overall amount of reposts on blog or specific social media platform reposts.
KR#4 Use more content—text, videos, images, reviews, etc. provided by users / customers for better word-of-mouth marketing sometimes called User generated content. It refers to content that is created by people, rather than the actual brands themselves
I read somewhere that OKR’s are a proven goal-setting method that, when used properly, can increase collaboration, empower and motivate team members to hit sales targets and drive revenues.
Both KPIs and OKRs are heading in the same direction. To achieve overall company goals, what separates them is that KPI’s are more realistic and achievable goals that one can measure.
EBITDA(Earnings before interest, taxes, depreciation, and amortization)
Easy for you to say! EBITDA is a calculation of corporate profitability. It is calculated by adding items like interest, tax,amortization, depreciation, and expenses to a companies net income. It can be used to compare two companies in a similar industry or sector. A higher EBITDA margin normally shows that a company is more efficient. It reveals that it can produce more earnings overall while putting a cap on operational expenses.
Did you know that EBITDA can be a KPI in itself . It would be better for businesses that possibly have larger amounts of depreciation and amortization. Companies with more capitalized assets or capital-intensive organizations . Net Income reporting may be a better KPI for companies with lower capital levels or those in a growth phase. EBITDA is a good way to measure operational efficiencies in a business and how it weighs up to its competitors. An EBITDA margin is usually calculated by dividing it by the companies total revenue.
Ok , thats enough.
MHHN ( My Head Hurts Now)