In a new series, home improvement industry leader Brian Gottlieb will share quick tips and must-knows for home improvement business owners. In this first episode of Mentoring Minute, Gottlieb talks KPIs:
Transcript:
At the heart of every organization is something known as a key performance indicator or KPI.
So what is a KPI and how does it relate to the home improvement industry?
The Meaning of KPIs
First, let's start as if we're in the hamburger business: Suppose you have a little hamburger stand and during lunchtime you hope to flip 500 hamburgers between the hours of 11 am and 2 pm.
One KPI you might want inside of your hamburger stand is staffing. How many people do we need during these hours in order to keep up with customer demand? And maybe at the end of the day you hope to sell $5,000 worth of hamburgers. A KPI for that would come in when closing out the cash register: when I count the money in the drawer, how much did we sell?
RELATED: How to Measure Customer Satisfaction
These are super simple KPIs for hamburger stand, but in the home improvement industry, the KPIs should be that simple too.
What a KPI does is it aligns organizational performance with individual and team performance.
Breaking Down KPIs
What happens in most organizations is that the CEO of the company typically knows what numbers are important, but we don't want the numbers to live just with the CEO. What we want to do is to drive those numbers down throughout the organization so they live with the people that are closest to the customer.
The more the people closer to the customer know whether the hamburger stand was profitable, or whether the hamburger stand was staffed properly, the more successful a company you're going to have.
My suggestion is this: take your yearly goals by department, boil it down into monthly goals, and then drill it down to a daily goal. Let the people closest to your customer know what their daily goal is—that's their KPI.
It’s easy to find, easy to track, and it will make your business a whole lot more profitable.
RELATED: Tech Talk: 20 Questions with Brian Gottlieb
Add new comment
Related Stories
What's Beyond the Hammer?
Working with Brian Gottlieb on the book Beyond the Hammer provided a masterclass on how to build an aligned team
How to Eliminate Boring, Languishing Meetings
Leff Design Build ensures maximum productivity and efficiency through these straightforward methods
5 Counterintuitive Strategies to Improve Your Business
Follow these strategies to inspire employees, instill trust, and beat the competition
Couple Act As Much More Than General Contractors
How LBR Partners uplifts and educates their Spanish-speaking trade partners
Artificial Intelligence Meets Design
An architect looks at the pitfalls of using technology to take over human design tasks
What the Most Successful Remodelers are Doing Right Now
Industry advisor Mark Richardson shares the answers to his three most asked questions: What's the remodeling market like? What are other remodelers doing? How do I measure up?
How to Create a World-Class Remodeling Team
Great remodeling companies position themselves for the future with the right players
Registration Open for The Pinnacle Experience 2024
Register today for The Pinnacle Experience 2024 in Baltimore from June 26-28. Join the best and brightest in home improvement and remodeling for insight, advice, and relationship-building that will help you take your business to new heights.
Focus on What You Can Control for Remodeling Success in 2024
Neil Kelly's CEO shares his plan of attacking for remodeling challenges in our 2024 Thought Leader predictions series
How to Increase Your Odds of Closing Remodeling Sales
Use these tips to hone your sales process and grow close ratio