ECI’s Commercial Team has been supporting our portfolio CEOs and their HR leaders with how they think about people, data and analytics for a number of years. With Covid-19 massively impacting visibility over business performance as staff work from home and like-for-like data comparisons become more complicated, one of the many ways we’ve been supporting the portfolio throughout the crisis is to help them think through their KPIs and set up the right dashboards.
In this portfolio perspective series, we surveyed CEOs and HR leaders across our portfolio, to understand how they responded to lockdown, and what initiatives they plan to take forwards. Across the series we’ll be looking to answer questions around getting the future of working from home right; making sure you have visibility over what matters; building on the wellbeing focus; a changing communication strategy; and how to best harness the positive momentum from lockdown. In this second piece in the series, we ask…
What does the future of business KPIs look like in the new working environment?
It may seem somewhat of an anachronism that by people not being in the office, teams have had improved visibility, but that is the case we have seen across our portfolio. More than half of the HR Leaders we surveyed said that closer monitoring of KPIs came as a result of the lockdown, but also the way that they collected and shared KPIs back was transformed.
When businesses were forced to adapt at speed following the announcement of lockdown on 23rd March, there was a need for business leaders to have better visibility of performance to understand where it was being impacted in the new work from home environment, to gauge the impact of Covid on the business, and to track when it was picking up again. The more manual the reporting processes before lockdown, the more it became clear that automated and accessible data reporting would need to be part of the new normal.
Whilst the process of setting up data collection and dashboard visibility at pace wasn’t always easy, as business communication increased there was a natural forum for this to be shared back with teams who became used to seeing more visibility over business performance. Direct managers too became more accustomed to using enhanced data rather than direct visibility to assess individual and team performance. With people now beginning to return to the workplace and broader business activity picking up, there will be questions to now agree as to whether the future of business KPIs are automated, always accessible and available to all:
How can I use dashboards and data visibility to impact my bottom line?
As monitoring processes and data collection has increased to adjust to the new ways of working, it’s important to hold yourself to account as to whether you have more insights or whether you just have more data.
ECI’s Commercial Team supported portfolio company, 4ways, who had never worked from home at scale before, to create a dashboard tool to measure performance of employees, teams and the wider business. This dashboard was set up with this challenge in mind, to ensure that it could be used to identify areas for change and generate actions. This meant the team could clearly see and prioritise areas that needed more support, at both a team and an individual level. Better monitoring and accessibility of data should give everyone across the business more of a focus on their key KPIs that should help to drive performance and understand HR needs more effectively.
Stephen Ferguson, COO, 4ways, commented, “The dashboard should give employees objective benchmarks to measure their performance and allows effective monitoring of work from home efficiency. It also will give the business a view of overall capacity, and when is the right time to hire more resource”. Similarly for firms which already have clearly defined KPIs and dashboards, now is an opportune moment to consider how best to drive insights from data and increase performance across the business.
Do people need to work their hours or do they need to hit their KPIs?
The start-up approach to hours or holiday has often been more flexible than your average company. The challenge posed by many, especially the millennial generation, is essentially, if someone gets their work done, does it matter how or when they do it? If someone can do their job in four days and someone else at the same level takes five days, is that a problem? It’s why places like Netflix have no set holiday allowances or why places like web development agency, Potato, has no set hours.
On the one hand, it is best to not think about your people like output-machines. The quality of their work, and the way they work is important, and you want people to think about what they can do for the good of everyone, not just hit minimum requirements. Everyone finds fulfilment in work in different ways, and for those who enjoy collaborating and working towards a bigger picture, isolated KPIs are unlikely to lead to long term enjoyment.
On the other hand, we’ve all been working in a more flexible way already, with work now being far more achievement focused than time spent at desk. For many of us, especially those with added responsibilities such as looking after children or relatives, there’s been a natural shift away from the 9-5. Research by ECI portfolio company, Moneypenny, has shown that most employees want a hybrid model in the future, not abandoning the office all together but with the traditional office becoming less structured and more focused on employee engagement and wellbeing.
The benefits that we’ve all felt and the trust that has been generated from the current arrangement, may mean when combined with a smarter use of KPIs and target management, that an assessment of hours as a proof of work will feel quite antiquated. The key will be two-way communication to understand how individuals feel about their productivity levels and where they work best, and agree together how that can best be measured. This approach should ensure people get the best out of their job and companies get the best out of their people.
How much visibility do you want to share about business performance?
Lockdown was incredibly stressful in a whole range of ways, and people have been understandably concerned about job security and how well their workplace is faring in the wake of one of the most significant economic shocks of our lifetime.
Senior teams for the most part have responded with increased communication and engagement, a topic we’ll discuss in more detail in another article in this series. The increased communication model helped leaders to address people’s concerns around the future of the business. For many businesses that didn’t have such an established communication structure pre-Covid, this setup facilitated a better format and increased frequency of sharing company news and performance organically.
What this meant is that people had more visibility than they’d probably ever had before about their teams, the business performance, and long-term plans. The question now is how much of this will be carried into the long term, or will people default back into earlier reporting lines?
In our experience the response to increased visibility has been incredibly positive. People want honesty and clarity, and in turn it has helped them to have more understanding about the – often difficult- decisions that business leaders are having to make.
With businesses likely to operate some form of increased flexible working in the future, it makes sense that if leadership teams want to continue to have high levels of visibility over their people, that it should be a two way street. This will have the benefit of people being more engaged with business performance, and more invested in the opportunities and challenges, than ever before.
How do my KPIs need to be different from six months ago?
It will be important to not to revert to pre-lockdown KPIs without a discussion to consider:
- What KPIs became less relevant in lockdown and are they now relevant?
- What KPIs became very relevant during lockdown but are now less relevant as you move towards business as usual?
- Are there any new KPIs that you might want to think about?
In particular given the turbulent economic conditions, and an unknown path to ‘normality’, companies which have seen changes in customer churn behaviour may want to reconsider their customer lifetime calculations. Whilst this is hard to predict, we believe that staying on top of current customer behaviour can help guide short term changes in churn, in addition to identifying and tracking lead economic indicators which may signal recoveries in individual sectors. Any KPIs being tracked should be treated with caution when forecasting recoveries, however, as previous behaviours may be unrecognisable in the post-Covid era.