If your firm is anything like ours, you have tried several different approaches at measuring your performance over the years. As a type of professional services firm ourselves, only our senior associates were typically engaged and aware of our financial performance. But even we weren’t confident that the right things were being measured and reported – until recently. Last year, we were introduced to two separate notions related to driving a professional services firm towards its goals that lit a fire under us:
- A regularly scheduled “huddle” where designated associates are assigned a key performance measure on which to report. The associate reports up-to-date numbers on their assigned metric, their forecast of how they expect the firm to perform on this measure over the next defined time-frame, identifies issues impeding success and identifies next steps towards addressing these issues. The reported metrics are directly tied to the key performance indicators as identified in the strategic plan. The thinking behind the regularly scheduled huddle is that keeping your associates accountable for reporting these numbers on a regular basis keeps indicators top-of-mind and assures that threats to achieving the desired level of performance in critical areas are quickly addressed and rectified before they get out-of-hand. To learn more about huddles and instilling a more performance focused culture at your firm, please visit our friends at Ownership Thinking: http://www.ownershipthinking.com/.
- A “forward-facing” dashboard that reports the performance of leading indicator type metrics. We were first introduced to this concept through a Vistage meeting (http://www.vistage.com/ ) that featured Mitch Gooze from Customer Manufacturing Group (http://www.customermanufacturing.com/index.shtml). Where most dashboards are more rear-view mirror like tools that show you where you’ve been, the forward-facing dashboard tracks your progress on the activities that directly contribute toward achieving your desired performance on key metrics. These could range from website analytics to sales funnel measures to the total value of your outstanding proposals. The key is finding the right leading indicators for your firm.
We combined these ideas into what we call our “agency scorecard” meetings. The format in which this information is presented can be varied. We hold our scorecard meeting on the first and third Monday of the month. Being a creative and somewhat informal marketing agency, an Excel spreadsheet on a large flat screen monitor didn’t feel right for us. We know because we tried it and the creative team almost revolted. So we moved to a more free-form blackboard wall our creative team designed specifically for this purpose. During the scorecard meetings the associates step up to the board with a piece of chalk and an eraser and report their numbers and provide their explanations. We placed this board in a main corridor of the agency so everybody sees it every day so it stays top-of-mind.
There are three considerations when implementing such a performance-focused discipline:
1. What are the key activities in which we engage that determine our future success?
This should be a mixture of short term measures like deal pipeline or percentage of backlog revenue and longer term measures like number of scheduled business development meetings. The key is that your tracking the right activities that drive your short and long term success rather than the ones that track where you’ve been.
2. What format should the huddles take that is right for our firm?
Maybe a spreadsheet on a large monitor fits your firm just fine. Embedded in this step is determining who should be attending your huddles and who should be reporting what metrics. If you’re an accounting firm with a couple hundred associates, you probably don’t want everybody in the huddles. If you’re a small A/E/C firm, perhaps it’s an all-associate meeting. There’s no one size fits all solution. It’s more about getting the right people together to report the most important leading success indicators on a regular basis so that your key associates are aware of the firm’s performance on success-driving activities.
3. How often should your huddles be held?
We settled on twice a month for ours since we felt our metrics don’t change a lot from week-to-week. Monthly meetings were too infrequent to keep our key metrics as top-of-mind as we would like with our associates. The dynamics of your business may dictate a different frequency.
One last note – your huddles should be short, no longer than 30 minutes. If they become too onerous, your associates will dread them. They need to be short and sweet and if you find yourselves getting sidetracked into a discussion about addressing an issue, schedule a separate follow-up meeting.
What comes to mind as forward-facing metrics for your firm? Please leave a comment and let us know.