Barriball says he and his management team create scoreboards throughout the company. Each department has at least one—and each is tied to a greater company-wide goal such as revenue or profit.
“We score things like safety, equipment uptime, crew efficiency and gross margin,” Barriball says. Cycle time is another important area. “We’re always looking at routing times, and the time it takes to convert a sales lead into a proposal into a sale.”
A key philosophy of the Working Smarter Training Challenge is to be “hard on processes, soft on people.” Barriball illustrates, “If one crew is consistently below their target, why is that? Do they need more training? Does a certain process need to be improved so the crew can become more efficient? On the other hand, if one crew is consistently above average, what can we learn from them? Can the other crews implement some of the things this over-achieving crew is doing?”
Employee Measures. This leads to the final and most-leading of leading indicators, employee measures. Are your employees happy to be working at your company? Do you have a good training and development program in place? Does your company provide the opportunity for career advancement? These are questions you must continually ask.
A Fresh Look at Your Financials
All of this attention on leading indicators does not mean that key lagging (financial) indicators should be ignored. In fact, Barriball says that if you are only looking at your P&L when your accountant prepares it during tax season, you’re doing yourself and your company a disservice. Barriball’s best advice is to look at the key financial information monthly (sales, profit margin, expenses, cash and receivables). Then, look for trends.
Finally, Barriball says it’s important to compare what you’d actually spent to what you’d originally budgeted. Likewise, it’s important to look at what you actually sold vs. what you thought you’d sell. Monthly financial indicators are going to tell you how your company is performing. But then it’s up to you and your managers to maintain your focus on those leading indicators that lead to even better performance.