Ownership Thinking in Action: Defining & Tracking KPIs, Part 2

July 23rd, 2015
#SPROWT, #GROW!IMS, #Marketing&SEO

When I wrote my previous post, the idea of tracking KPIs across the company seemed like a relatively simple idea.

Boy, was I wrong!

We only just implemented them a few months ago. It took six months to get everything in place. Why? First, because we’re really busy (we just finished hiring six new employees!). Second, and more importantly, because this is an incredibly difficult thing to nail down.

Identifying KPIs that were impactful to our business was relatively easy. Making sure they were trackable was not. The whole idea was to simplify our management system, so adding hours of work for tracking a KPI would have defeated the purpose. Unfortunately, more than half of the KPIs we came across required tedious work to track. So which did we keep or throw away? What did the process look like to get to here? I’ll describe the experience at a high level.

Where We Started

Getting the ball rolling was the hardest part. Basically, we needed to come up with seven KPIs to track for each department. We were just using the book (Ownership Thinking) for reference, so there was little direction or specific examples, since the book talks a lot about the service industry and doesn’t reference digital work much.

Just to give you an example, here’s a list of KPIs that Perry Phillips, President of Ownership Thinking Canada Inc., came up with for the construction industry:

  • Number of bids
  • Win rate on bids
  • Change Orders
  • Number of safety accidents or violations
  • Plus or minus days to schedule variance
  • Average number of items per punch list

We needed to come up with lead/lag pairs for the KPIs too. So if one end goal of the sales department is to generate more sales for the company, that would be the lag KPI. The lead KPI would be the actual things that team could do to influence that goal. For example, the number of phone calls or emails with potential customers.

The idea behind the lead/lag pairs is that the lead work should influence the lag numbers. Lag numbers can’t be influenced directly. A good parallel is a company’s stock price. The employees can’t directly make it go up or down, but they can work to improve quarterly profits, which should help the stock price. And, importantly, the lead work can be tracked and tied to individual employees, which helps with accountability between each employee and their department’s success.

Below is a slideshow from One Step Beyond that covers the KPI workshop process we went through (in addition to other points from Ownership Thinking). If you want an in depth look at the process, it's a great resource.


Great Ideas! Brad Hams' Ownership Thinking from One Step Beyond


The lag KPIs tend to be your traditional KPIs--leads, revenue, customer satisfaction, etc--and were the easier of the two to identify. The lead KPIs got messy. How would you track phone calls and emails? There were a few times where we almost decided to track a KPI by having that team member physically keep a tally of the number of times they did certain things. This clearly would have never worked. We learned and charged on.

In The Thick Of It

At its worst, we had four departmental KPI lists. There were 14 KPIs for each--seven lead and seven lag. And many of the lead KPIs were going to require some manual (read: error prone) work to generate. And we were going to have to create spreadsheets to track it all, come up with ways to export data out of other softwares to feed into them, and make them all work together and feed up to our main company dashboard.


We were tasked to make all this happen, but each of us knew it was getting a bit out of hand. The book repeatedly warned of “going to the KPI buffet”, where you come up with too many, too-complicated metrics to track and make things worse than when you started. Despite that good advice, that is exactly where we ended up, making repeated trips to the buffet.

Luckily, during our next management meeting, we decided to simplify the whole process. Instead of seven lead/lag pairs, we were going to start with just three lags per department. We all breathed a sigh of relief. We wanted our first launch of the KPI tracking to be comprehensive and perfect, but as we know now, just getting the ball rolling was way more important. Instead of a waterfall style process, we backed off to a more “lean” approach (which ties in well with our new SCRUM thought process as well!).

The End Result

Without worrying about lead indicators and trimming our list down to around three KPIs per department, we were able to get the system up and running rather quickly. Each employee has a Google Sheets “Scorecard” where they add in their data (weekly or monthly, depending on the KPI, and we'll be looking to automate as much of this as possible in the future). Each director has a “Dashboard” where they see the averages/sums of their department in one place, and they can see details on a per-employee level as well. Finally, Jason has his Managing Director’s Dashboard that pulls in data from all four departments. We’re also creating graphs of these metrics and pulling them into executive reports for the owners to review.

Here is the breakdown of the actual KPIs we’re tracking (with a screenshot of one sheet of my dashboard at the end):

Inbound Marketing

  1. Average Leads Generated
  2. Average Cost Per Lead
  3. Average Conversion Rate
  4. Billable Hours
  5. Billable Percentage


  1. Customer Satisfaction
  2. Customer Awareness
  3. Budget Utilization
  4. Billable Hours
  5. Billable Percentage


  1. Leads Generated
  2. Close Rate
  3. Profit Per Sale
  4. Billable Hours
  5. Billable Percentage

Web Services

  1. Website Quality
  2. Budget Utilization
  3. Billable Hours
  4. Billable Percentage

Inbound Marketing Dashboard

(Click on the image above for the full version)

Note the two common KPIs across all departments: Billable Hours and Billable Percentage. These are simple metrics: the number of billable hours “stamped” (we use Harvest to track time spent in different work types) weekly and the percentage of total hours that are billable (since we stamp plenty of unbillable hours).

These are two of the most basic metrics to track, and are two that we’ve found are crucial to our bottom line. If the company is not outputting a certain percentage of billable work, we’re throwing money (specifically, wages!) down the drain. So every department has a billable percentage goal they shoot for that is fair for their department. For example, the marketing and development team is mostly focused on execution, so they shoot for 75%. The operations team, on the other hand, spends a good amount of time working internal and administrative (non-billable) work, so they have a goal of 50%.

The rest of the metrics are mostly self-explanatory and distill each department’s goals. So far, the setup has worked out well. We’re able to focus on these during monthly, quarterly, and annual reviews instead of guessing at what’s important. And this focus helps us clarify our work so that our time is not wasted.

All that is great. But what’s equally important is that we’re appreciative of the effort it took to get here, and are proud of what we’ve learned along the way!

Stay tuned for a progress report on how well it works out in the long term.

Thanks for reading! Cheers.

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!