Let's talk about benchmarks. Better known as KPI's. These are the 10 or so metrics that will be used to track progress. We also talk about how to talk strategy to team members so they can execute on the HOW.
STEP 1 THE LANGUAGE FOR SHARING STRATEGY WITH OPERATIONS
STEP 2 SELECT THE RIGHT KPI’s
STEP 3 THE LANGUAGE FOR SHARING STRATEGY WITH TEAM MEMBERS
STEP 4 Define the Long-Term Strategic Objectives
EXAMPLE: Amazon's primary goal: link the digital and brick-and-mortar shopping experience in order to be part of every single purchase made.
A short-term strategy includes a detailed action plan: what platforms will the marketing appear (TV, radio, print, social media). Who will carry out the strategies, budget, profit, etc
Joya is currently enrolling members for international (Europe) and domestic (NYC) strategy days. She also leads a year-long intensive mastermind of C-Suite level women, which is accepting applications for 2024.
Season 4, Episode 6: Measuring to See if Your Strategy Works
[00:00:00] Joya: All right. We are live Kathie. It is Episode Six, Season Four of Drink, Like a Lady, which is designed for you as a female leader to get a seat at the bar and a seat in the boardroom. And this particular season, we are focusing on how to think strategically. We've talked about how to get started. We've talked about how to poke holes in your strategy and road, test it, to make sure that it's firing on all the right cylinders.
And today we're going to talk about measuring how to measure and see if your strategy is working. And why is this piece so important?
[00:00:33] Kathie: I mean, it goes back to that whole saying thatwhat you measure you can manage. And when you do not measure something, you do not, you don't even have the satisfaction of knowing whether or not you're moving along, because sometimes it looks like you may not be moving along in terms of meeting your goals and your objectives, but actually, you know, you've really come a long way.
So it's so important to measure what you're doing.
[00:00:54] Joya: I am in the middle of doing this with my sales coach, for the Facebook ads for the first time in earnest, I'm spending a lot of money on Facebook ads for my masterclass, and we couldn't understand that the conversion rate to the landing page was great, but there was a certain point where things would drop off.
And because we had so many KPIs around the ads, we were able to identify exactly at the point when the traffic dropped off and toggle accordingly. So can't say enough about that.
[00:01:21] Kathie: That's a great example of how even the small things that you do, um, measurement point of it is important.
So you actually feel like you're getting someplace as well as knowing that you're getting there.
[00:01:34] Joya: Yeah, well, I'm also crying and how much money is going out the door, but measuring that. So, so this week, in this episode, we're going to discuss the language for sharing strategy for, for operations, selecting the right KPIs and the language for sharing strategy with your team members.
So let's get started with number one, the language for sharing strategy with operations. And why did you choose this first?
[00:01:58] Kathie: Well, I think it's really important that you've gotta have organizational wide goals. You need to understand that the strategy is a part of a long-term big picture, uh, objective for the business.
And then there's short term tasks that go along to get you where you where you're going. So understanding that it's sort of a cascading component, you know, when you start with strategy, you go to a long-term goals and then you go to short-term tasks and, um, tactics.
[00:02:24] Joya: So the first step is to communicate the goals and the measures. Once you've established your strategic objectives, you got to translate that.
[00:02:32] Kathie: And what's important here is to understand how you have to state them and what they mean. So what is the goal be very clear about that communication is, um, when does that goal going to go into place? And when are you going to start on it?
Because sometimes goals that are sitting parallel to each other started different levels and at different periods of time, Um, how are you going to get it done as part of the strategy and who's going to do it and make sure that each one of those components are measurable. So if it's, when you talk about, when are we talking about, uh, launching, uh, two to three months from now, six months, et cetera, and then go backwards and figure.
When you have to, um, start working on that. I'm used to do time and actions years ago before people actually started talking about this and it was, we needed to ship things and we needed to get the orders in. And what did you have to do? So I would always work backwards.
[00:03:24] Joya: A point of differentiation sharing strategy with operations versus sharing strategy with team members. Can they be one in the same? Are they different stakeholders?
[00:03:33] Kathie: Well, it functionally, they all have different components that they add into it. So for instance, the operational piece of it, it depends on what your lag time is, what your lead time is to. Is it a product? Is it a service? How quickly can you turn it around?
And then. I always tended to have the kickoff conversation on strategy with everybody together, because what might happen is you might be blindsided to say, oh, I didn't think of that. I had to speak to marketing at 0.1. And they would say, yes, you have to go backwards in terms of that. So I always like to get the team together first and then operationally, usually there's something parallel in terms of where someone's going to start to take action.
[00:04:12] Joya: So communicate the goals and measures the step. Number one, and then step number two is turning those strategic initiatives into targets.
[00:04:19] Kathie: and targets are important. Where are you going and how are you going to get there? Um and that's where we're going to get into one of my favorite conversations there just next is KPIs key performance indicators.
So what's your target and then how do you Put a measurement tool to that.
[00:04:35] Joya: And then what are a big picture improvements? It's not thinking about short-term, it's thinking about long-term big change.
[00:04:43] Kathie: And what's important is where do you want to go? How do you see yourself? Whether it's a year, two year, three years down the road.
And we talked about this either last week or the week before that years ago, strategies used to be 10 years. And usually now they sit around the five-year mark because technology has changed our customers. Profiles have changed dramatically, especially over the past year as well. And, um, we've got to make sure that we're keeping in pace with that.
So if the big picture is one year from now, two years, you know, what does that look like and be comfortable working towards that goal?
[00:05:15] Joya: the key thing is that the strategy has to help the business improve the way that it operates, as opposed to just what you're already doing.
[00:05:24] Kathie: Yeah, you don't want it to be an action just for the sake of action.
Sometimes what I'll find is when working with teams or, you know, CEOs they'll say, well, we did this and we did that. I said, well, you did was check the box. We don't want you checking the box. We actually want you moving the needle. And that's the big picture component we're talking about. When we talk about improvements.
[00:05:43] Joya: I was saying to you before we got on the call here that I'm reading Dorie Clark's book, the long game. And so you can change the color of the box in which your product or service comes in. And maybe you see a short term bump, but thinking about scaling longterm and who are those partnerships going to be as much bigger than changing the color of the box.
[00:06:03] Kathie: That's for sure. And it takes a very fresh mind and it takes, um, almost taking the cobwebs out of what you're thinking and your team's thinking in order to make that jump.
[00:06:13] Joya: Yeah. And so her book really drives home the fact that we need like that psychic space in our calendars to be able to do that big picture thinking as opposed to just being busy, which is, you know, a great bump in your social status, but it doesn't necessarily move the needle.
So what exactly is an effective goal?
[00:06:30] Kathie: An effective goal is something that you can measure. It's something that you can say that I can visibly see a difference from where I started to where I end up and it could be anywhere from, um, revenue goals, you know, as well, or it could be, uh, gross margin goals. It could be product goals in terms of assortments.
a lot of it has to do around the finances when it comes to marketing. And this is what you're working on. It's you know, how, how are you converting your customers at every single point on your website and your ads and how does that work? So by doing that, you're able to make adjustments as you go along.
[00:07:04] Joya: So the what, when, how, who, and then make sure that they're specifically measurable. Exactly. All right, short term action items. How do you address, you know, you just said earlier, it used to be that we had sight lines of 10 years. Now we're working with five-year future casting. What happens in the one to two year mark?
[00:07:23] Kathie: Well in that period of time, it's really important to put the foundation in place. So for instance, if you were in data analytics, that data, that functional component, you want to make sure that you're creating the foundation. So you're gathering the data and that it can be distributed, um, with its product, you know, what does that design team or research team working on and how can.
Actually get to market once you're up and running, um, revenue, you know, you're looking at your Salesforce. What does that look like in business development? Um, do you have the talent? Do you have, um, vision and are you able to communicate that through some of your marketing initiatives?
[00:07:58] Joya: And then what does a result statement?
[00:08:01] Kathie: A results statement-- that is something that says, this is what I've achieved and this is where I'm going, and then it keeps you moving forward.
[00:08:08] Joya: And who do you present that to?
[00:08:10] Kathie: Well, usually you're presenting it to the entire team. It's really one of the things I did successfully. I know it was so intuitive for me is when I was purely in business development.
I made sure that when I came back from any business development, uh, Anywhere, I would bring the whole team together. And I talked about what was the result of everything that each one of them did and that helped get me to where we want it to. And that was really in revenue. Um, and what happened was by doing that, they were part of the result that we wanted.
So it wasn't just, it was never just about me because I couldn't do it on my own. It really was about the team and they got to, uh, you know, bear the fruit of the, of those rewards.
[00:08:52] Joya: And then the KPIs, the magic words, selecting the right KPIs. What makes a wrong KPI?
[00:08:58] Kathie: Yeah. Well, if you're, if you're selecting, it goes back to the same thing. Just checking the box. Oh. You know, we bumped up, um, our sales by 2%. Well, that's great. And then I actually gave a. When I was a senior executive at Macy's and at the department level, and I oversaw several departments. Oh, we're up 25%. And I go without it's great. But what's your division up? And meaning the department in general, across all the board, they said, well, it's up 35% and what's your store up?
Oh, well, my store is up and I'm making this up now because most stores don't go up that high anymore, you know, 37%. And then what's corporate performance and usually corporate performance because you have. Like a laggard P uh, KPIs might be below it, but it, my team ever said to me, oh, I'm up 35%, but the department's up 37%, I'd say, well, where's your 2% and you're losing.
So that's selecting the right KPIs and then understanding how that fits within the scope of, um, you know, the total environment that you're working in.
[00:10:01] Joya: I remember reading something that the VP of digital assets at Nike wrote. And she said that one of the most overlooked KPIs is happiness satisfaction in employees.
You know, we often think that things like culture or "Woo-woo", and they're not necessarily going to contribute to your bottom line, but more and more we're finding that that is actually not the case. And so she said happiness is an overlooked KPI.
[00:10:25] Kathie: And then that's especially important right now, um, in the, uh, HR function that they are looking at, that they're taking a look at what are all the dynamics that make the individual, the staffing, um, happy, you know, what makes it, whether it's a hybrid commute or, uh, or working with different teams, you know, backing off three days in two days out.
Um, so every function you can find a KPI, the point is you've got to make sure that you're using those to drive the entire business.
[00:10:51] Joya: All right, so let's break down. What KPI's are. My hairdresser was like, KPI. What is that ? I'll T that up with you? What is a KPI for those who don't know?
[00:11:01] Kathie: It's a called a key performance indicator, and it's a quantifiable measurement tool that you can track.
Um, and it's a progress. It's either progress going forward or backwards, you know, certainly we hope that you're always going to, um, it's it tells a story about where you're going and how you get there.
[00:11:17] Joya: All right. So you mentioned, you dropped, mentioned this a minute ago, but an industry KPI. So in other words, my division that sells socks is up 35%.
The company is up by 37%, but then the retail industry is up by X. So that's the industry KPI.
[00:11:36] Kathie: Yes, it is. It absolutely is. And you take a look at that because if all of a sudden there's a trend and this is what I love so much about fashion, you could see the highs and the lows that went with it. And that's great that, you know, you're in socks.
You know, I know there were points at which, um, and they were doing very well. But I will tell you something. If you think about it now sucks have taken on a whole different dimension. Men don't wear socks the way they used to. All right. We do not wear hosiery the way we used to. So it was great to be in socks many years ago, but not saying now.
[00:12:11] Joya: Absolutely. All right. So then now we're going into the kinds of KPIs. If I were sharing this with my hairdresser, who my earlier. What's kind of the first thing that a business leader needs to leverage?
[00:12:25] Kathie: What they really want to do is they want to start leveraging. I mean, first thing most people want to do is they want to, they want to increase their business.
Don't they? I mean, that's really the two. So how do we increase the revenues? So it's great to have great revenues. Then the second one that I always look at is, um, what's your net profit. So you could be up, you know, let's say we're up 35% again with that Sox. Um, but your margins are down 35%. That means you're.
Giving it all away. You're actually selling it at a decrease Marvin. So those are the two things, because if you're not making. All right. You're not going to stay in business. I mean, that's truly what it is. Although we do find in technology, a lot of them, um, you know, they don't measure that as much as we used to that used to be like, you know, you gotta make a profit, you gotta make a profit. The other things are customers, and how, and we've talking to your hairdresser, you know, is she bringing in new customers? Is she retaining the customer she's already had?
What does that look like? So those are two of those KPIs that I think she should absolutely be looking at.
[00:13:26] Joya: And then KPIs also lead to making better decisions, right? Like, so, as I was saying, there's 26 KPIs that I've established with my scale sales coach around my Facebook ads. And now that we've looked at the data and seeing exactly where in the funnel folks drop off.
I know where to make a decision on making a change. Ultimately, I had to change the free webinar that people are going to see when they came to my landing page, they were coming to the landing page, but something in that video sales letter was not converting them to want to book on my calendar. So at least we were able to make a very educated decision about where the change needed to happen in the whole food chain. And then also are the objectives being met? Like, am I getting on a call, a sales call every single day based on, you know, what we have toggled since. Well, that remains to be seen because I just changed it on Monday, but I think that's another big piece.
[00:14:17] Kathie: And what's so important is that you, you look at it in a way that, you know, when we call them there, there's sometimes there's trailing indicators too. And that those trailing indicators are important to understand. Is this something that is trending just today? Based on something else going on or is it something that actually is going to take hold and I need to run with it?
So I also state that, I think you should be, um, not only looking at them on a daily basis, but you should be collecting them and taking a look at what that looks like on a trend basis.
[00:14:46] Joya: Right. And from years of reporting business news, there's always leading indicators and lagging indicators, which are a measure of the broader economy. So 10 KPIs. Why 10?
[00:14:56] Kathie: Well, you know, one of the things that as you were talking about how many you're working on, if you, and I'm talking about, if you, as a leader, um, have too many, what happens is you tend not to focus. So if you have the top ten, and you go from there. Usually what will happen is if you have a subset of another 10, um, those will fall into place based on the top 10 being focused on it also allows the, the functional components of your business or your organization or where you're thinking to become really strong.
And you want to build it, those KPIs so that the actually helped carry that.
[00:15:32] Joya: And those functions are financial revenue, growth, net profit margin customer satisfaction or customer turnover, um, operations time to market, the average order, or the average time it takes to fulfill an order and then talent management.
How many folks are you retaining? How many folks are leaving?
[00:15:53] Kathie: Yeah. And that's important to you because in a business that's looking as part of a long-term strategy. If you're churning too many, you're that intellectual property actually goes away with them and you don't want that, but you also want new talent to come in and bringing new ideas.
So to have a mix, um, is really, really critical.
[00:16:12] Joya: I was having a conversation with one of my members who's at Merrill Lynch, and she's trying to, she's been saddled with the task of diversity hires and she was trying to put together a panel. On leadership and get diverse employees. And she realized that there's no diverse employees.
So it's really putting a big spotlight on the state of what's going on at a big bank in America right now. All right. Step three is the language for sharing strategy with team members. Okay. Here's where the rubber hits the road. Cause you gotta tackle the, how we've come up with this fantastic strategy. But now how are we going to be successful?
[00:16:47] Kathie: And yet those are the key questions. How are we going to do it? It's it's, you know, once again, taking a look at the bandwidth, we talked about bandwidth last, last week, making sure that you're really super honest with yourself. Do I have it? Um, and then what are, what is the best business model?
So business models change and not every company has the same business model. And the point is, is it, you know, in some cases, is it. Revenue at a high level, um, service, you take a look at a Nordstrom. You take a look at, um, Bloomingdale's they're about the service. Then you go to Walmart, we know what that is. It's all about the price. So how are you going to get there? And what, how do you fit within that market?
[00:17:27] Joya: So there's the broad market's scope. There is the limited market scope. So in other words, socks were in return to that example would be the accessories market, I guess. And then what is your, a unique, competitive advantage compared to other socks makers in the, on the planet?
[00:17:45] Kathie: So it may be, you know, it may be, um, you know, knee socks or you see like the big of Nissans that seem to be coming back now. Not a lot, but you know, there's that. And how much of that within the market. And that's a narrow scope. That's your narrow scope within the soft market and maybe a product scope.
[00:18:03] Joya: Got it. All right. So now you have to establish some general methods on how your vision is going to come into a reality. How are you going to in fact, execute on your strategy?
[00:18:14] Kathie: And that's really important that everyone pulled together and say, okay, here's the timeline. Here's what I've got going for me. And now once he had going back to the house, how am I going to get there?
So what are the short term goals and tasks that need to happen in order to move that needle? You need to be very clear about that. And we were just talking about this at a meeting in my one hour meeting that went into three hours this morning. We talked about the staff shortage, where people, um, product shortages, you know, technology.
Staff shores, talent shortages, all of that is still in a state of where you are. How if you don't have it, you're gonna have to go to figure that out. That's really where the challenge is in this day and age.
[00:18:54] Joya: We know that supply chain is really threatening our economy right now. It's not getting as much as we thought it was.
[00:19:00] Kathie: And actually Apple, I just read something this morning, on the new the apple 13 phone, they cut their order by 10 million pieces of the Apple 13 because of chips. So there you go. I mean, they had a strategy, but they didn't have the supply component to it. That's going to make it work.
[00:19:18] Joya: So the next step is to select those five to 10 KPIs that you're going to use to manage the performance, going back to SWOT analysis, what are the strengths, weaknesses opportunities, and what was T?
[00:19:29] Kathie: Threats.
[00:19:30] Joya: to set priorities and create traction and then evaluate the options that you've prioritize and identify the ones that create the base best benefit and best achieve the mission and the vision of your organization.
[00:19:43] Kathie: So if we were to go back to this Apple scenario, I just talked about where they might not be able to get product out as much, you know, by going down and 10 million units, they may be able to create a service that will still keep them connected to potential customers in the future. So that may be a good way that they can still create some kind of traction, some kind of hold to it.
Um, while they're working on the, um, the lack of, uh, technology components at this time,
[00:20:10] Joya: we're getting some American company produce their chips, right. They're probably.
[00:20:13] Kathie: I'm sure they're working on that too.
[00:20:16] Joya: All right. The long-term strategic objectives as we're bringing this episode home and let's use Amazon as an example. Um, what would you say are some of the, you know, sort of pieces that's nest underneath?
[00:20:29] Kathie: Well right now we know that, um, Amazon's primary goal is to create a seamless link between the digital and the brick and mortar shopping that has gone on that's period. That's what they talk about all of the time. And we see that actually increasing every, you know, every new conversation around Amazon in terms of opening up more brick and mortar stores as.
Purchasing, um, you know, other retail operations as well. Um, their short-term strategy is a detailed action by what the platforms are going to look like and how are they going to get there? So Amazon has done this, but you know, I have to say, you know, I've never worked for Amazon in my next life. I hope that I come back and I have that opportunity.
I still have the, uh, the same, you know, retail mind. Um, but they're constantly looking at what's the long-term and how, what do they have to do today in order to gain that traction? And that is their short-term goals and action plan.
[00:21:25] Joya: All right. So then you've got to operationalize your objectives. Set annual my milestones year one operational plan month.
Uh, w how are you going to monitor and, and staff up for this? How are you gonna monitor at a board level and how do you adjust? Um, what, what would you say you needed to add to any of that?
[00:21:46] Kathie: Well, I think what's really important here is that this sounds so much like it's like, oh my God, I'm so overwhelmed. I don't know how I'm going to be able to do all this and still create what I want to create in the strategy.
The point is that it is important to talk about it. It's important to evaluate at the board level where they're actually, you know, giving the, um, the ability to spend money or. You know, refund all the money in certain ways and they have to be aware of that. Um, they also come most board members come with a broader, uh, bandwidth in terms of what are other industries doing?
What are they doing to get over some of these hurdles, um, working with your staff, that's important to let them know that, you know, they're either on track or not on track. And I have found that really talented staff, they want to share the solutions and that is so key to keeping them involved in terms of that.
[00:22:38] Joya: One of my members was going into her first trade show, post pandemic, and we had workshopped a solution on what to improve going into those front lines. And for the first time she interviewed all of her employees for one hour, asked for their input on what, where the gaps were. What are the pain points when they're dealing with the buyers at these trade shows implemented all of their suggestions and they had their highest revenue generating year.
But it was because it was a co-creation between those who were on the front lines and the owners.
[00:23:11] Kathie: And what's, I always love to get, you know, the solutions from the bottom up going up because they're out there, they're listening. They're seeing if it, if it is a, uh, production-based, they can see in production where there may be some benefits to trimming, you know, some of the time or whatever that, you know, whatever the, it depends on where you are from a production time, point of view, but they often come up with a point of solution that isn't like millions of dollars. It's just a simple turn of the knob solution that, that, you know, you can bring forward.
[00:23:44] Joya: What are we talking about next week, Kathie?
[00:23:46] Kathie: Well, we're actually, you know, we talked a lot about strategy. We talked a lot about theory. We talked a lot about, you know, cascading this down.
We're actually going to take a look at, um, some best known strategies that are currently working in business today. And we're going to get some, a real good case studies going, and we're going to talk about that.
[00:24:03] Joya: Awesome and Kathy, if anyone wants to get ahold of you, how do they get ahold of you?
[00:24:07] Kathie: All right. Email me at email@example.com. Gmail or my cell phone is (609) 933-7600
[00:24:21] Joya: AOL. I haven't heard that in a while.
[00:24:23] Kathie: Oh my gosh.
[00:24:27] Joya: And you can always get ahold of firstname.lastname@example.org. I am launching the very next cohort of my public speaking masterclass, which is why I'm running Facebook ads, but this is designed for any corporate woman that wants to be able to build a personal brand and tell stories about what makes them great. And I will help you to do that.
In fact, I'm teaching a class tonight, Kathie, until then. We'll see you,
[00:24:52] Kathie: Have a great week. Thanks Joya. Bye bye.