How do you balance KPI ownership and accountability with empowerment and autonomy?

Typically, every strong business operator will have these 5 traits. 1. Strong Business Acumen 2. Decision Making 3. Communication 4. Coach and Develop 5 . Persuade KPI’s inform the decisions you make as a leader or business operator. However, the measure of success for your decision making will be “Do you get it right a heck of a lot more than you get it wrong.” Two leaders can review the same KPI/ Data set and yet, walk away with two different interpretations and hence, two different plans of action. One of them is wrong. Remember that the accuracy of your decisions from reading the KPI matters more than your ability to read a KPI. Having this as your perspective will improve your business maturity and help you be a better leader.

When I'm establishing relevant and clear KPIs, I do align the supply chain strategy with the overall business strategy, enabling them to better meet customer demands, reduce costs, and ultimately improve their financial results. However,- and it is a BIG HOWEVER, it's important to note that KPIs alone are not enough to drive improvement. Companies must also invest in people, training, and providing the necessary skills and knowledge to utilize these KPIs and other technologies effectively. Fostering a culture of continuous learning and development empowers teams to embrace new technologies and drive tools across the organization, ultimately unlocking the full potential of KPIs in the supply chain operation and finally overall business.

KPIs must be alligned with the overall business strategy that should go without saying. It's more important that top management is sure not to have conflicting KPIs within the company. If the warehouse manager, purchase manager and sales manager all run at conflicting goals, then you have problems and the silos will be big. So understandable and alligned KPIs will bring people on board and keep your company robust and they of course have to be data driven. Feelings, believe and hot air are no gos.

Balancing KPI ownership and accountability with empowerment and autonomy requires a delicate dance. Encourage ownership by involving team members in setting KPIs, fostering a culture of transparency and accountability. Empower them with the right resources, training, and support to achieve these goals autonomously. Provide regular feedback and recognize achievements to reinforce accountability positively. Remember, autonomy doesn't mean isolation; it's about empowering individuals to take ownership while staying aligned with organizational objectives and values.

Balancing KPI ownership and accountability with empowerment and autonomy involves clear communication and trust. Assign specific KPIs to team members to establish ownership and responsibility, while also providing the freedom to approach goals in their own way. For example, in a sales team, each member might own a revenue target but can choose their methods for achieving it, whether through direct outreach or networking events. Regular check-ins and feedback sessions ensure accountability while respecting individual approaches, fostering both responsibility and creativity. This balance encourages innovation and personal growth, leading to a more motivated and effective team.

I refer to the A in SMART as Attainable with an Action Plan. Making the goal setting process collaborative allows leaders to get an understanding of their team/team members challenges, which then allows them to co-create an action plan that meets team/organizational goals, but also meets individuals where they are. A cookie cutter approach to goal setting assumes everyone has the same challenges and strengths and perceives both the exact same way. We know that’s not true and leaders who lead equitably understand this and factor it in to these conversations. Asking if a KPI is attainable without having clarity on HOW it will be attained is why most people fail to meet their goals.

After establishing SMART KPIs for your team, monitor and track them regularly and transparently. Ensure everyone has access to the data showing KPI progress. Use tools like dashboards, reports, and feedback sessions to collect, analyze, and visualize this data. The key is making the data visible, accessible, and understandable for everyone. Regularly review the data and discuss performance, challenges, and opportunities with your team. In my experience, using a shared dashboard in an Agile project helped maintain transparency and fostered a sense of ownership and accountability among team members, ultimately driving better performance and collaboration.

One of the features that has been game-changing for us is the KPI "trajectory." We collaborated with our IT team to integrate an AI projection tool that provides our team with a color-coded indication of whether they are "On Track" or "Off Track" to reach their KPI targets, based on current live programs and projections from upcoming initiatives. Each team displays this information on the Dashboard TV in their department and throughout the company. This system keeps us all accountable and motivates the team to achieve their goals.

Evaluating and rewarding KPIs with your team is essential for fostering a balance between accountability and empowerment. Celebrating achievements and providing constructive feedback can boost morale and encourage continuous improvement. For example, linking KPIs to organizational rewards, like bonuses or promotions, can motivate the team. However, it’s crucial to avoid creating a competitive environment that could undermine collaboration and trust. Instead, focus on individual growth and team success to maintain a positive and cooperative atmosphere.

From my experience, the best KPIs involve at least two different KPI builds in an organization. At the top of the organization there are a handful of summary KPIs, such as revenue/EBITDA, which are actually an aggregation of a more granular level of KPIs. This way, each functional owner (e.g. Sales leader) can be held accountable for how their team's performance rolls up into the total company's results. Without a more granular level of accountability it's hard to maintain true perspective on underlying business drivers.