OWNERSHIP THINKING IN ACTION: DEFINING & TRACKING KPIS, PART 1

September 8th, 2014
10minuteread
#SPROWT, #GROW!IMS, #Marketing&SEO

When Coalmarch brought me on as Search Director, they gave me three books to read, and 90 days to do it. Coming from a guy who is not a fast reader, I was a bit overwhelmed. But I soon realized the awesomeness behind the idea: The management has backed the idea of always trying to learn and improve ourselves into the culture. This manifests itself in the importance we place on continued education, in weekly company-wide training meetings, and in how we run the company.

The biggest improvement goal we've had lately has been an overhaul of our management process. We read a book called "Ownership Thinking" by Brad Ham that raises the idea that every employee should act like an owner of the company. This boils down to the fact that everyone should see the impact of their efforts on the bottom line, no matter their title. It strongly stands against the "cog in the machine" feeling that is common for employees of big corporations.

Ownership Thinking Book

It's a complex process--we haven't fully hammered out the details and implemented it yet--but we've made some great headway that is worth exploring. For example, one important piece of the puzzle is simple, efficient tracking of everyone's work toward meeting and exceeding KPIs (KPIs are Key Performance Indicators, or quantitative metrics that are directly tied to the health of the company). There are company-level KPIs, department-level KPIs, and individual KPIs. We have to identify these KPIs, they must impact the bottom line, and we must be able to easily track the work that contributes to them.

This is more difficult than we first thought. Coming up with tasks that are both impactful and trackable requires some creativity. I'll give four scenarios, one for each potential type, and discuss the problems and solutions we've found for each:

  1. The KPI is obviously impactful and easily tracked.
  2. The KPI is obviously impactful and not easily tracked.
  3. The KPI is not obviously impactful and easily tracked.
  4. The KPI is not obviously impactful and not easily tracked.

Example #1: Obviously Impactful/Easily Tracked

The more basic KPIs tend to fall into this bucket. For example, one KPI could be that each employee should work at least 40 hours a week, and a certain percentage of that time should spent be on billable projects. In this case, the impact is obvious, and basic project management software can track and report on it (we use Harvest and have been loving it). This KPI is available on an individual level (for training purposes) and also as an average at a department or company level.

Example #2: Obviously Impactful/Not Easily Tracked

A more difficult example is a KPI like "building error-free websites." The impact is obvious again (buggy websites quickly lead to dissatisfied customers), but how would you track it? There are pieces of software out there that crawl and check a website for errors, but they typically can only identify code that doesn't work. What about code that is just bloated? Or simply a piece of styling that doesn't display correctly? One potential solution here is that you can define the idea of "error-free" in a meaningful way and the tracking will be more straightforward. For example, you can remove bloated code from this KPI and monitor it under a "page speed" KPI instead. That way, each aspect can be tracked more easily and completely without confusing overlap.

Example #3: Not Obviously Impactful/Easily Tracked

In any industry, there are parts of the business where the impact is simply hard to track. For example, a matter dear to my heart, link building. Links are relatively easy to track, whether through internal lists or OSE or Majestic or whatever your fancy. But, as crucial as links are to a domain's authority (in the traditional sense), can you answer the question of "how much revenue did/would this one link bring to the company"? All else being equal, more links to a client's website mean more rankings, which means more traffic, which means more conversions. This means they are happier, which means they will remain a client, which means more revenue. That's a long path in a best case scenario. So what is the impact? This brings us to one of the more interesting aspects of the management system: assumptions.

We're assuming, as most in the industry would, that getting our clients links is a worthy use of our time. Identifying the exact impact would be time-consuming if not impossible, so we're fine without the details. There are also some other assumptions we're having to make as well:

  1. Let's say we want to track how accurate our estimations are when we pitch a potential customer. When an employee gives an estimate for how long a task will take, we have to assume that they're giving the estimate to the best of their ability. In other words, they're not going to "pad" the task with extra time they don't need. 
  2. When working with a more subjective goal (like good client communication), it would be difficult to check that it is happening to the standard that a manager would set. They're not enough time to check every email or line of code, so we have to trust their work and assume it's up to par. 

Deciding what assumptions to make and what needs to be exactly nailed down is part of the process, and we're all learning a lot about priorities as a result. A big part of it comes down to the amount that we're able to trust our employees to do good work. If we didn't hire motivated people, we may not be able to work under these assumptions and the system just wouldn't work.

Example #4: Not Obviously Impactful/Not Easily Tracked

I haven't encountered any KPIs that fit into this category, but it's worth mentioning as it has to exist. It would have to be something you know is important, but I'm not sure how you'd know that without seeing an obvious impact or being able to track it. I suppose that if you were to come across something like this, it might just be best left out of your management system. After all, you're not going to be at a loss for KPIs. It's much easier to "go to the KPI buffet" and have too many, so it shouldn't be a problem to have to drop one.

Deciding what KPIs to track and how to track them has been an enlightening process for us. We hope that it will bring clarification to our employees' work, so that no one ever thinks "why am I doing this?" or more generally "what does the company expect of me?" At first glance, it may seem complicating to define and track KPIs for each employee and department, but it's meant to help set expectations and goals. We are not adding it on top of the current management structure, it is going to replace the management structure, and hopefully free up time for everyone. Instead of having meetings to ask "how is X project going this week?", we should be able to look at our KPI dashboards and see the answer without having to ask. We'll keep you updated on how that goes.

I'd love to hear from the community about what this or similar processes look like for them. Do you put emphasis on tracking KPIs across the company? Maybe you don't think it's that important? Send me some questions or comments below. Cheers!

(View Part 2 of the "Ownership Thinking In Action" Series Here!)

About The Author

Lee leads the SEO and technical elements of the inbound marketing team at Coalmarch. He's responsible for the overall SEO strategy of the team, he created the forecasting model used...Find out more!