Key Performance Indicators

5. The Power of Drivers

Monitoring your sales, for example, will not necessarily help you improve your sales performance.

By contrast, understanding the drivers behind the sales of your business can provide a breakthrough.

The simplest way to explain drivers is by using examples, such as those below.

5.1 A management consultancy had a disappointing level of monthly sales for years, until it realised that man-hours sold per consultant per week was the key driver.

• Once this was monitored, it became crystal clear which consultants were earning the revenue. Attitudes changed overnight, and sales increased significantly.

5.2 After a period of stability and high profits, a specialist travel agency realised that staff turnover was a driver.

• An experienced sales person was found to be three times more productive than a new recruit.
• The recruitment and training process for new sales people was a major burden.

5.3 An engineering company found that the defect ratio was a driver.

• Defects led to goods being returned, extra work to rectify the faults, delays in payment, and lower prices being achieved.

5.4 Drivers vary enormously. For example:

• Sales leads in a capital goods business.
• Sales per square foot in a retail business.
• Market share in a market where only the big will survive.
• Machine downtime in a factory.
• 'First time fix' in a maintenance business.
• The morale of employees in a nursing home.