2016 Canadian Employee Ownership Conference

Save the Date – June 7 – 9, 2016 in Kelowna, BC.  More details coming soon at esopconference.ca.

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Key Performance Indicators – Tip #4

We are continuing to share a few tips to keep in mind regarding Key Performance Indicators (KPIs) and list some of the KPIs identified in various industries over the years by Brad Hams in his book Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit.

KPIs are measurable activities that drive our financial performance.  Your leadership team needs to identify the appropriate Leading KPIs (foresight viewing) for you and get your employees focused on them.

KPIs identified for a Software Company:

  • Sales by product group
  • Percentage of sales from top 10 (customer diversity measure)
  • Install margin
  • Data conversion turn
  • Call response time
  • Renewal revenue per employee
  • Number of demos
  • Support labor dollars per incident

KPIs identified for a Grower (plants and flowers):

  • Labor dollars per flat produced (a flat is a group of plants)
  • Shipping cost per flat
  • Average number of trays per customer (to measure upselling)
  • Scrap and spoilage

KPI Tip #4:  “Do not go to the “key indicator buffet.”  Trying to measure too many things leads to an overwhelmed staff, poor measurement, and, ultimately, the abandonment of the process.”

Until next time,

Perry Phillips, President

Ownership Thinking Canada Inc.

Visit www.ownershipthinking.ca to learn more about Ownership Thinking Canada and our online e-learning tool.

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Key Performance Indicators – Tip #3

As discussed before, Key Performance Indicators or KPIs are measurable activities that drive our financial performance.  Your leadership team needs to identify the appropriate Leading KPIs (foresight viewing) for you and get your employees focused on them.

Over the next few posts we will continue to share a few tips to keep in mind regarding KPIs and list some of the KPIs identified in various industries over the years by Brad Hams in his book Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit.

Restaurant Industry:

  • Food cost
  • Employee turnover
  • Average check (average dollar amount per diner – a good measure of “upselling”)
  • Sale per staff hour
  • Hourly payroll as percentage of sales
  • Kitchen audit score
  • Average comment card score

Technology Recycling Company:

  • Recycle, remarket, and service revenue
  • Recycle pounds
  • Recycle pounds per man-hour
  • Number of assets processed
  • Number of assets processed per man-hour
  • Days to process recycling
  • Remarket inventory dollars

KPI Tip #3:  “In order to manage financial performance proactively, it is important to focus on leading, activity-based measures (KPIs).”

Until next time,

Perry Phillips, President

Ownership Thinking Canada Inc.

Visit www.ownershipthinking.ca to learn more about Ownership Thinking Canada and our online e-learning tool.

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Key Performance Indicators – Continued

Key Performance Indicators or KPIs are measurable activities that drive our financial performance.

As previously discussed, your leadership team needs to identify the appropriate Leading KPIs (foresight viewing) for you and get your employees focused on them.

Over the next few posts we will share a few tips to keep in mind regarding KPIs and list some of the KPIs identified in various industries over the years by Brad Hams in his book Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit.

Retail Industry:

  • Sales by category
  • Inventory variance
  • Number of cycle counts completed
  • Sales per staff hour (very useful in scheduling as well)
  • Overtime (dollars and/or hours)
  • Customer count
  • Average ticket
  • Clock-in errors

Grower (plants and flowers):

  • Labour dollar per flat produced (a flat is a group of plants)
  • Shipping cost per flat
  • Average number of trays per customer (to measure upselling)
  • Scrap and spoilage

KPI Tip #2:  “Full disclosure of financial information to all employees is not required to practice Ownership Thinking.”

Until next time,

Perry Phillips, President

Ownership Thinking Canada Inc.

Visit www.ownershipthinking.ca to learn more about Ownership Thinking Canada and our online e-learning tool.

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Key Performance Indicators

How do businesses measure success?  They utilize financial statements such as the income statement (sales – expenses = profit). That’s important information, but there are problems with focusing only on this data.

First, statements are “rear view.”  The data is historical, and nothing can change it.  Second, most employees cannot read statements, so they are not useful tools.  Finally, they do not deal with activities that go on in the business.  If we are to proactively manage financial performance, we must identify measurable activities that drive our financial performance, and get our employees focused on these.

We call these measures Key Performance Indicators, or KPIs.  Your leadership team needs to identify the appropriate KPIs for you.  Many companies focus on Lagging KPIs (rear view mirror), you need to focus the company on Leading KPIs (foresight viewing).

Over the next few posts we will share a few tips keep in mind regarding KPIs and list some of the KPIs identified in various industries over the years by Brad Hams in his book Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit.

Construction Industry:

  • Number of bids
  • Win rate on bids
  • Backlog (contracted work that is not yet underway)
  • Small-tool cost (small-tool shrinkage and damage can be significant in this industry)
  • Change Orders
  • Cost of disposal
  • Buyout percent
  • Number of safety accidents or violations
  • Worker’s compensation earned premium
  • Plus or minus days to schedule variance
  • Average number of items per punch list
  • Equipment utilization

KPI Tip #1:  “If you want to engage your employees in the financial performance of the company, using only financial statements is not enough.”

Until next time,

Perry Phillips, President

Ownership Thinking Canada Inc.

Visit www.ownershipthinking.ca to learn more about Ownership Thinking Canada and our new online e-learning tool.

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2015 Canadian Employee Ownership Conference

Email Flyer January 2015

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Implementing The Adult Contract

The Adult Contract

Over the last several months we’ve been talking about The Adult Contract and how implementing Ownership Thinking involves creating an environment of high visibility and high accountability in an organization.  If the organization was operating with a fairly low level of visibility and accountability in the past, this new way of operating will undoubtedly create anxiety in some employees.

The Adult Contract is an “agreement as to how people ought to treat one another in this new environment of visibility and accountability.”  We encourage you to talk openly with your employees about anything that comes up.  In his book Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit, Brad Hams says, “Let employees know that it is new for everyone, including you, and that everyone will be taking this journey together.  Reinforce the fact that nobody is perfect at anything when they are learning for the first time; we get better by practicing … Talk them through The Adult Contract, and tell them to be watching for nonadult behavior, starting with themselves.”

Brad relates the story of a company where the leaders “recognized that historically they had something of a fear-driven environment and that people were familiar with “getting shot.”   To introduce The Adult Contract, everyone in the company received a “Get Out of Jail Free” card.  The idea was that if any employees made a mistake or tried out something that didn’t work, they had this card to let them off the hook.  Of course if was symbolic, but it made a great point and did so in a lighthearted manner.”

Until next time,

Perry Phillips, President

Ownership Thinking Canada Inc.

Visit www.ownershipthinking.ca to learn more about Ownership Thinking Canada and our new online e-learning tool.

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