Barriers to Utilizing Key Performance Indicators (KPIs)

I recently had the opportunity to lead a Stambaugh Ness webinar about the critical KPIs of business development and marketing. Our webinars are always well attended, and one of my favorite components is the research that we're able to conduct via our polling questions.

For this webinar, we asked several hundred attendees about the barriers that prohibit them from more effectively using KPIs at their firms. They were given five options and allowed to select as many as applicable to their companies. Based on their responses, here are the top barriers, in order:

1. No internal champion to track and manage KPIs
2. Lacking proper processes to track KPIs
3. Not sure which KPIs to track
4. Drowning in data, not sure how to prioritize
5. Lacking proper technology to track KPIs

More than half of the respondents indicated that they didn't have an internal champion to track and manage their Key Performance Indicators. This is unfortunate, but not at all surprising.

Design and construction firms are fairly advanced when it comes to understanding financial KPIs - revenues, profits, average revenue per employee, etc. These are critical to understanding a firm's financial position, and many firms drill down to the project level to understand which projects are making money and which ones aren't. But too often firms ignore business development and marketing metrics, meaning they are managing these functions blindly.

I often say that KPIs are both a GPS - so you understand where you currently are, as well as a rudder - so you can take corrective action to arrive at your destination in case you go off course. But if you aren't tracking KPIs, how do you know where you are? How do you know if you need to course-correct?

The lack of an internal champion typically results from the structure of marketing and business development departments. Few firms have Chief Marketing Officers or Chief Growth Officers demanding this data. Firm principals don't know what they don't know, and may not truly understand the value of this information.

However, when firms use directors of business development as bird dogs, sniffing out projects, or when they use marketing directors as proposal-jockey-collateral-developing-social-media-managing-marketing-coordinators-with fancy-titles, these firms are not truly embracing the responsibilities of the roles.

In other words, although we have internal positions that should or could champion these KPIs, the job descriptions don't actually allow for it. I've worked with executives that really want the data - and, more importantly, want to make informed decisions based upon the data. And I've had others whose eyes glazed over every time metrics and KPIs came up. "Just go get work," they would say. Of course, one firm executive who told me this also was apparently okay with average A/R collection in excess of 120 days, so if you don't care about getting paid for your work, it makes sense that you don't care about how many proposal dollars are being converted into wins or how strong - and realistic - the sales pipeline is!

We are in the knowledge era, and as they say: knowledge is power. There's much power to be gained in the knowledge provided by KPIs, but you have to see the benefits to truly understand the power.

If you don't have a champion, it is time to get one. Is there a position on your leadership team that could oversee the sales and marketing metrics? Do you have a director of marketing or business development who is more focused on "doing" than "directing," and could add value to your company by stepping up and leading KPIs? Or do you need to consider outside support to help identify critical metrics, establish processes, and champion them for your firm? All may be viable options.

As for the second most common barrier, almost half of the participants in the webinar survey identified a lack of proper processes when it comes to utilizing KPIs. In my experience, the lack of processes and lack of a champion often go hand-in-hand. But the challenge here is often far beyond the KPI processes and is more global to companies. What they are really lacking is business development processes, from rainmakers to seller-doers to dedicated business developers. What is the target market? How robust is the go/no-go decision-making process? Are activities being tracked? How is the data being collected and tagged? What reports are being generated? How is this information being used for informed decision-making?

Unless you have the business development and marketing "KPI Champion," most likely the proper processes aren't in place, and that is directly related to the third most common barrier: not sure which KPIs to track. Firms don't have a champion, they don't have the processes, and they don't know what to track.

Fortunately, for this third barrier, here's a free resource for you: check out the Stambaugh Ness webinar, How Are We Really Doing? The Critical KPIs of Business Development and Marketing. Watch it, download the slide deck, and use the examples to guide you on your KPI journey. And, if you need help with the champion and process barriers, be sure to reach out to me at [email protected] and let's chat.