Developing Metrics That Drive Growth and Profitability

Transcription

1 Developing Metrics That Drive Growth and Profitability Presenter: Mike Cleland Presented by Bond International Software, Inc. The worldwide leader in staffing and recruiting software.

2 Introduction: The importance of a balanced metrics portfolio to ensure Effective prospecting and sales management A well aligned delivery organization Effective performance metrics Improvements are taking hold and are effective Presenter Mike Cleland President Charted Path Presenter Mike Cleland Charted Path

3 Agenda The Model for Performance The Role of Metrics Overview of Financial Objectives Operational Performance Metrics Individual Performance Metrics Linking Metrics to your Company Strategy

4 Staffing s Strategic Drivers

5 Model for Performance Financial Results Sales Strategy Operational Alignment Performance Driven Culture

6 When are Metrics Important? Growth decreases visibility Improve management collaboration Drive large scale improvements

7 How do metrics provide value? Objectively measure results Provide accurate leading indicators Identify operational weaknesses Reveal investment opportunities Drive individual accountability Measure strategy effectiveness

8 Model of Performance Financial Results Result Metrics Sales Strategy Operational Alignment Operational Metrics Performance Driven Culture Performance Metrics

9 Result Metrics Overview

10 Common Financial Objectives Profitability Objectives Growth Objectives

11 Financial Objective Overview Revenue Reflects bill rates and headcount Not a measurement financial health Not a strong measurement of performance Show Pony measurement

12 Financial Objectives Overview Gross Profit Dollars Strongest measure of growth Plays a important role in compensation Commonly acts as a performance measurement

13 Financial Objectives Overview Gross Profit % Strong macro measure of financial health Impacts company valuation Must be managed to selectively

14 Financial Objectives Overview Return on Investment Used as a company-wide and individual performance measure Revenue can be used but GM may act as a more revealing measure. Very powerful measure when comparing different parts of the organization

15 Driving Financial Results Measuring Operations Measuring Individual Performance An organization must measure and manage to both since one can overshadow the other

16 The Role of Operational Metrics Measures how well the operations are aligned with market needs and intended strategy Effectiveness of sales organization Client productivity Effectiveness of delivery processes and tools Team size and resource allocation

17 Measuring Operations The Sales Strategy

18 Measuring the Sales Organization Value Proposition Client Productivity Sales Funnel

19 Value Proposition Aside from relationships, it captures the value you bring to the market. It is why clients buy from you: Expertise Delivery Capabilities Service Level

20 Why measure your value prop? Determines effectiveness of value proposition Provides compelling data for your sales team and marketing material. Allows management to objectively challenge the go to market strategy.

21 Sample VP Metrics Value Proposition Niche Specialization Industry Vertical Skill Set Engagement Model- High Touch Engagement Model- VMS Sample Metrics Meetings within niche # of Jobs Filled % of Total Jobs % of Fall Offs # Meetings with Hiring Manager Job Order Fill Rate Submittal to Hire Ratio # of Jobs that meet criteria # of RFPs Pending # Events attended % of Meeting Objectives Met

22 Measuring Client Productivity These measures capture both the volume of Gross Margin a client provides along with the effort necessary to generate that gross margin.

23 Why Measure Client Productivity? Measuring the productivity is an important step in eliminating waste and increasing profitability More than just GM% Productivity can vary widely Operational throughput necessary to generate margin Measures true bottom line contribution

24 Sample Client Productivity Metrics Operational Financial Measure Category Sample Metrics Job Orders per Month Job Order Fill Rate Submittal to Hire Ratio Submittal to Interview Ratio Average Length of Contract Average GM/hr Total GM per placement Average GM % Client Profitability**

25 The Sales Funnel Do you have the right number of resources and are they generating the right activity? Sales must be measured in terms of front end activity.

26 Prospecting Volume: Example Do you know what your funnel should look like? Movement from a sales driven to a delivery driven company

27 Prospecting Volume: Impact Areas of impact Cold calling New manager meetings Client penetration Client consolidation Long term performance Calls Meetings Job Orders Interviews Placements Poor performance in these areas indicate an aging book of business

28 Sample metrics for team size Sales Measure Category Sample Metrics # of active target accounts # of new client meetings # of job orders from new clients # of non VMS jobs Increasing team size may be the solution to meet the required activity levels. However, increasing quality requires greater focus on the role of management. Different approaches may be needed to develop skills, and actively manage to higher quality standards.

29 Measuring Operations Delivery

30 Why measure delivery? Buyers continuously change how they buy Delivery capabilities must support success factors Changing factors requires adaptation Metrics point to where change should occur

31 Measuring Delivery How well does your delivery organization meet your clients needs? Quality Responsiveness Throughput

32 Quality Does our company drive quality service? Job order qualification Candidate qualification Submittal management

33 Responsiveness Is our delivery organization fast enough to compete? Delays Over Processing Over Production

34 Throughput Do we have enough horsepower to service our target accounts? Sourcing Submittal Management

35 Sample Delivery Metrics Response Time Quality Measure Category Sample Metrics Average time to post Average time to screen web apps % of Jobs with submit within 8 hours % of jobs covered within 48 hours % of High Touch Jobs Submittal to Interview Interview to Hire Submittal to Hire Turndowns/False Starts Response time represents the amount of time it takes for a process to be completed. In the world of VMS responsiveness oftentimes is more important than quality.

36 Throughput Metrics Recruiting Measure Category Sample Metrics # of jobs with no submittal % of jobs with submittal within 8 hours # of unique candidates submitted Submittal to Interview Ratio

37 Performance Metrics

38 Performance Metrics Performance metrics are measure of individual productivity Reviewed on a regular basis Should be customized based on the role, mix of business, and experience level

39 Why Measure Performance? Sets performance expectations Identifies weaknesses of desk activity Provides opportunity for one on one coaching Establishes history of performance

40 Sales Performance Metrics Activity Quality Measure Category Sample Metrics # of contacts made # of meetings Meetings with managers # Job Orders # Interviews # of direct jobs # of jobs with interview times Submittal to Interview Submittal to Hire # of Hires Incorporating account plan objectives along with metrics is an excellent way to elevate the conversation with your sales people and provide a forum to brainstorm through obstacles. Reviews can be as much about coaching as they are about accountability.

41 Recruiting Performance Metrics Activity Quality Measure Category Sample Metrics # of contacts # of submittals per month % of jobs covered Candidates in pipeline # Interviews # Placements Submittal/Interview Interview/Hire Submittal/Hire

42 Tips for Performance Reviews Craft metrics based on your strategy and culture Be consistent Be prepared Communicate goals and objectives

43 Metrics and Strategic Change

44 Drivers of Strategic Change Change in sales strategy Operational overhaul Expanding the core business

45 Delivery overhaul Reorganization Process overhaul Job Order Management Sourcing Submittal Management

46 Change in Sales Strategy Target different account base Modify existing offerings Reengineer the sales process

47 Expanding from the Core Many staffing company s are evaluating their strategy in order to stay competitive.

48 Why Measure Your Strategy? Metrics quantify the change Metrics help determine if its feasible Metrics provide data for effective change management Metrics hold all levels of the organization accountable

49 Strategy Focused Organization Result Objectives Financial: The ultimate results of the strategy Customer: The value the customer receives Driver Objectives Process: The activities that create the value Learning and Growth: How people, technology and organizational structure support the strategy

50 Tools for Management Strategy Map captures and aligns Sales Strategy Operational Success Factors Performance Culture Balance Scorecard measures the progress of the strategy

51 Sample Strategy Map Vision: To become a $_M company by the end of 2013 Mission: We provide specialized staff augmentation in major U.S. markets Financial Offerings Offering 1: Staff Augmentation Offering 2: Projects Target Segments Segment 1: Fortune 500 Clients Segment 2: Mid Market >$100m Revenue Customer Sales Delivery Internal Learning & Growth Values Service Respect Integrity Charity

52 Sample Balanced Scorecard Financial Increase GM% GM% of New Business 40% Rate Negotiations Customer Responsive % of RFPs Covered within 48 hours 80% Recruiting Process Improvement Internal Business Processes Increase Prospecting Activity # of Monthly Sales Meetings 20 Lead Generation Learning & Growth Develop Consultative Skills # of Trainings Conducted 5 Develop Online Training

53 Wrap Up Choose a targeted and well balance portfolio of metrics Results Operations Performance Drivers Strategy The portfolio of metrics should vary based on Company Strategy Team Composition Company Size Client Base

54 Contact Info Mike Cleland Need staffing and recruiting software to measure KPI s and manage your operations by the numbers? Call us! Bond International Software, Inc. One world. One future