Critical KPIs Most People Miss

There are three types of KPIs. Two measure results and one shapes your team and culture. KPIs help prevent blind spots. Ironically, the most important of these KPIs, are the ones most organizations miss.

If you need assistance assessing and accelerating the transformation and transition of first-time leaders, Click Meet Me or visit tdspi.com.

Transcript

SPEAKER_00 0:00

Welcome to First Time Leaders Accelerated. Leading people is the most important responsibility in the world, yet 60% of first-time leaders fail. Incorrect leader selection distresses your people, increases your operating cost, while eroding your culture. It's preventable, and I teach you how one episode at a time. For this podcast, I've condensed my four decades of leader transformation experience into concise, practical solutions you can apply immediately to begin reducing your operating cost. This podcast is for first-time leaders and those responsible for hiring and selecting first-time leaders. I'm Timothy Dean Smith, your host. Monthly, I deliver you practical solutions to leader challenges. Now, let's solve a leader challenge. You probably know KPIs as key performance indicators, which are the metrics used to measure and guide an organization's systems and processes. I refer to these KPIs as operational KPIs. There are three types of KPIs. Two measure results, and one shapes the team and culture. KPIs help prevent blind spots, and ironically, the most important of these KPIs are the ones most organizations missed. To be successful, you need to continually assess and improve using all three. I will explain the three KPIs, their importance, and relationship to each other. The one I just alluded to, operational KPIs, often referred to just simply as KPIs, is the common business acronym that has been around for roughly 45 to 50 years. Adding the term operational clarifies the metric. This quantifiable metric measures performance and is used to make decisions. Operational KPIs measure results. The next KPI is digital KPI, which is the increasing with the increasing use of technology over the last few decades, digital KPIs have become common. They are quantifiable metrics used to measure the success and progress of your online business. Digital KPIs also measure results. The third KPI is leader KPIs, which I will focus on for this episode. Leader KPIs is a concept I refined. These KPIs go beyond the numbers and have everything to do with three specific feelings appreciation, inspiration, and fulfillment. Leader KPIs shape your team and culture. Of the three leader KPIs, I believe appreciation is the most important. Before I continue, I want to share a story about the importance and power of appreciation. Eunice worked for one company as a janitor for 20 years. Being a janitor is often a thankless job and probably not a whole lot of fun. Eunice's company was purchased by another company. Within a few days of the announcement, the purchasing company's chief people officer made it a point to meet with each person and personally thank them for their service. When Eunice was approached and thanked, she immediately burst into tears and asked to be excused. Thinking she was sick, she was allowed to leave. The new chief people officer, being a true people-centered leader, was concerned for Eunice and followed up with her the next day. She asked Eunice if she was okay. Eunice began to tear up again but quickly regained her composure. Eunice said in her 20 years with the company, she never received any form of thank you, not even a verbal thank you. Eunice was so moved when the new Chief People Officer thanked her personally, she could not contain her emotions. Eunice was considering the change of ownership as a good time to quit. She was planning to let them know the day the new Chief People Officer met her. This new Chief People Officer's very simple demonstration of appreciation kept Eunice from leaving. The power of timely, genuine, and in-person appreciation can't be topped. This form of appreciation often triggers inspiration in people and ultimately leads to a trusting culture. In a trusting and people-centered culture, appreciation is not something only leaders should be expected to demonstrate, but the cultural norm should be as it expected of all people. People feel appreciated when they receive recognition, especially peer recognition. Those who feel appreciated will always perform above and beyond what is expected. Treat people like they make a difference and they will. Don't miss an opportunity to demonstrate the genuine appreciation. Of course, the culture must support this. Genuine appreciation costs nothing, takes very little time and effort to demonstrate, yet the recurring positive benefits of increased performance and positive culture byproducts are infinite. The second leader KPI feeling is inspiration. When people feel inspired, they look forward to coming in every day and performing at their best. Being inspired is different than being motivated. People often use the terms motivation and inspiration interchangeably when they are the opposite at their source. Motivation is external or extrinsic. The classic example is the carrot and the stick used to motivate the donkey pulling the cart. There is motivation for the donkey to perform and pull the cart when the carrot is present. When the carrot disappears, the donkey's motivation typically disappears. When this happens in business, the results are almost always subpar performance. Inspiration, on the other hand, is internal or intrinsic. It's a feeling compelling you to action. You are making up your own mind, not someone telling you what is good for you. Therefore, it's critical to have inspired people rather than people who require constant motivation. The third leader KPI feeling is fulfillment. People feel fulfilled when they know what they do matters and they feel part of a larger cause. The feeling of fulfillment perpetuates the positive cycle of being inspired to return and perform day after day. Yet 90% of Americans return home not feeling fulfilled because they feel that performance doesn't matter. The three-leader KPI feelings pave the way for the operational and digital KPIs. When the leader gets the leader KPIs right, the organization, I'm sorry, the operational and digital KPIs will take care of themselves. I realize leaders have many responsibilities, which is why I recommend leaders' primary focus, not their sole focus, should be on the three leader KPIs. A great positive byproduct of the leader KPIs is the emergence of trust, another necessary feeling for leaders and those they lead. When people know you appreciate them and care for them, they will feel safe and begin to trust you, their leader. Instead of focusing on the bottom line, people-centered leaders should focus on the people who influence the bottom line. Leader KPIs applies to leaders too. If leaders don't also feel appreciated, inspired, and fulfilled, the people they lead won't either. The acronym KPI, when associated with leaders, has a non-traditional meaning. The new meaning would be keep people inspired. Leaders accomplish this by continually demonstrating genuine appreciation for people, not just saying it. Appreciated people are inspired people. And if you take care of your leader KPIs, your ROI, which traditionally means return on investment, will also have a new meaning. That would be return on inspiration. If you found my solution valuable, share it with others. Leading people is the most important responsibility in the world. I ensure the right leaders are prepared. Are the right people leading your people? How do you know? If you're not sure, let's find out together. Click Meet Me in the episode show notes or on my website tdspi.com. Treat people like they make a difference and they will. Thank you for listening. Take care.