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Daily experiences (UK only) - Rule 3: determine your growth strategy.
Building an excellent KPI structure is critical for implementing a good Performance Management framework for your company. It is the foundation for communicating and improving performance, day in day out. But how do you build a KPI structure that lasts? Rule 3 out of 10: determine your growth strategy.
Organizations usually define several objectives, but how do these objectives relate to each other and which one is more important? For that reason, it is important that companies think not only about defining objectives, but also about the objectives hierarchy. As explained in rule 2: that hierarchy starts with the ultimate goal. The big thing. It differs for profit and non-profit oriented companies. This part discusses the next step for profit companies. How to accomplish your ultimate goal in profit companies? Well, there are two pillars that will drive your ultimate goal: the growth and productivity pillar.
Rule 3 focuses on the growth objectives within the first pillar. When you look at your strategy you will find all kind of objectives that have to with growing the business. Basically you can develop a matrix where on the x-axis you have existing and new products and the y-axis you have existing of new markets. For opportunities arise. You will (mainly) grow your business with existing products in existing or new markets or with new products in existing or new markets. More quadrants can be filled of course. You will find wordings in the strategy that helps determining the right objectives, such as: grow in country x or y with current product portfolio or increase wallet share within existing client base. Depending on the quadrants you hit, you will have to select the right KPIs. For instance, focusing on selling more of the same kind of products to existing customers: you should be interested in KPIs like wallet share of cross / up selling indicators. When your focus is on selling new products to existing customers or new customers, you could look at KPI’s that relate turnover of new products to the total turnover.
But how to accomplish the growth strategy? Well, you have to sell more. To whom? Customers of course. So, that brings us to our rule number four: customer value proposition fuels your growth strategy.
But how to accomplish the growth strategy? Well, you have to sell more. To whom? Customers of course. So, that brings us to our rule number four: customer value proposition fuels your growth strategy.