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Developing Metrics That Drive Growth and ProfitabilityPresenter: Mike Cleland
Presented by
Bond International Software, Inc.The worldwide leader in staffing and recruiting software.
Operational Excellence presented by Bond International Software, Inc.
Introduction:
The importance of a balanced metrics portfolio to ensure
• Effective prospecting and sales management• A well aligned delivery organization• Effective performance metrics• Improvements are taking hold and are
effective
• Presenter– Mike Cleland– Charted Path
ModeratorPhil McCutchenMarketing ManagerBond International Software, Inc.
PresenterMike ClelandPresidentCharted Path
Operational Excellence presented by Bond International Software, Inc.
Agenda
• The Model for Performance
• The Role of Metrics
• Overview of Financial Objectives
• Operational Performance Metrics
• Individual Performance Metrics
• Linking Metrics to your Company Strategy
Staffing’s Strategic Drivers
Bond International Software, Inc.
One world. One future.
www.bond-us.com
800-318-4983
Operational Excellence presented by Bond International Software, Inc.
Model for Performance
Performance Driven Culture
Sa
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Str
ate
gy
Op
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tio
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l
Ali
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me
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Financial Results
Operational Excellence presented by Bond International Software, Inc.
When are Metrics Important?
• Growth decreases visibility
• Improve management collaboration
• Drive large scale improvements
Operational Excellence presented by Bond International Software, Inc.
How do metrics provide value?
• Objectively measure results
• Provide accurate leading indicators
• Identify operational weaknesses
• Reveal investment opportunities
• Drive individual accountability
• Measure strategy effectiveness
Operational Excellence presented by Bond International Software, Inc.
Model of Performance
• Result Metrics
• Operational Metrics
• Performance MetricsPerformance Driven Culture
Sa
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Str
ate
gy
Op
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tio
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l
Ali
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me
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Financial Results
Result Metrics Overview
Bond International Software, Inc.
One world. One future.
www.bond-us.com
800-318-4983
Operational Excellence presented by Bond International Software, Inc.
Common Financial Objectives
Growth ObjectivesProfitability Objectives
Operational Excellence presented by Bond International Software, Inc.
Financial Objective Overview
Revenue
• Reflects bill rates and headcount
• Not a measurement financial health
• Not a strong measurement of performance
• “Show Pony” measurement
Operational Excellence presented by Bond International Software, Inc.
Financial Objectives Overview
Gross Profit Dollars
• Strongest measure of growth
• Plays a important role in compensation
• Commonly acts as a performance measurement
Operational Excellence presented by Bond International Software, Inc.
Financial Objectives Overview
Gross Profit %
• Strong macro measure of financial health
• Impacts company valuation
• Must be managed to selectively
Operational Excellence presented by Bond International Software, Inc.
Financial Objectives Overview
Return on Investment
• Used as a company-wide and individual performance measure
• Revenue can be used but GM may act as a more revealing measure.
• Very powerful measure when comparing different parts of the organization
Operational Excellence presented by Bond International Software, Inc.
Driving Financial Results
• Measuring Operations
• Measuring Individual Performance
An organization must measure and manage to both since one can overshadow the other
Operational Excellence presented by Bond International Software, Inc.
The Role of Operational Metrics
Measures how well the operations are aligned with market needs and intended strategy
– Effectiveness of sales organization
– Client productivity
– Effectiveness of delivery processes and tools
– Team size and resource allocation
Measuring OperationsThe Sales Strategy
Bond International Software, Inc.
One world. One future.
www.bond-us.com
800-318-4983
Operational Excellence presented by Bond International Software, Inc.
Measuring the Sales Organization
• Value Proposition• Client Productivity• Sales Funnel
Operational Excellence presented by Bond International Software, Inc.
Value Proposition
Aside from relationships, it captures the value you bring to the market. It is why clients buy from you:
– Expertise
– Delivery Capabilities
– Service Level
Operational Excellence presented by Bond International Software, Inc.
Why measure your value prop?
• Determines effectiveness of value proposition
• Provides compelling data for your sales team and marketing material.
• Allows management to objectively challenge the go to market strategy.
Operational Excellence presented by Bond International Software, Inc.
Sample VP Metrics
Value Proposition Sample Metrics
Niche Specialization
•Industry Vertical
•Skill Set
Meetings within niche
# of Jobs Filled
% of Total Jobs
% of Fall Offs
Engagement Model- High Touch # Meetings with Hiring Manager
Job Order Fill Rate
Submittal to Hire Ratio
# of Jobs that meet criteria
Engagement Model- VMS # of RFPs Pending
# Events attended
% of Meeting Objectives Met
Operational Excellence presented by Bond International Software, Inc.
Measuring Client Productivity
These measures capture both the volume of Gross Margin a client provides along with the effort necessary to generate that gross margin.
Operational Excellence presented by Bond International Software, Inc.
Why Measure Client Productivity?
Measuring the productivity is an important step in eliminating waste and increasing profitability
– More than just GM%
– Productivity can vary widely
– Operational throughput necessary to generate margin.
– Measures true bottom line contribution
Operational Excellence presented by Bond International Software, Inc.
Sample Client Productivity Metrics
Measure Category Sample Metrics
Operational Job Orders per Month
Job Order Fill Rate
Submittal to Hire Ratio
Submittal to Interview Ratio
Financial Average Length of Contract
Average GM/hr
Total GM per placement
Average GM %
Client Profitability**
Operational Excellence presented by Bond International Software, Inc.
The Sales Funnel
•Do you have the right number of resources and are they generating the right activity?
•Sales must be measured in terms of front end activity.
Operational Excellence presented by Bond International Software, Inc.
Prospecting Volume: Example
Do you know what your funnel should look like?
Movement from a sales driven to a delivery driven company
Operational Excellence presented by Bond International Software, Inc.
Prospecting Volume: Impact
Areas of impact
• Cold calling
• New manager meetings
• Client penetration
• Client consolidation
• Long term performance
Poor performance in these areas indicate an aging book of business
Operational Excellence presented by Bond International Software, Inc.
Sample metrics for team size
Measure Category Sample Metrics
Sales # of active target accounts
# of new client meetings
# of job orders from new clients
# of non VMS jobs
Increasing team size may be the solution to meet the required
activity levels. However, increasing quality requires greater focus
on the role of management. Different approaches may be needed
to develop skills, and actively manage to higher quality standards.
Measuring OperationsDelivery
Bond International Software, Inc.
One world. One future.
www.bond-us.com
800-318-4983
Operational Excellence presented by Bond International Software, Inc.
Why measure delivery?
•Buyers continuously change how they buy
•Delivery capabilities must support success factors
•Changing factors requires adaptation
•Metrics point to where change should occur
Operational Excellence presented by Bond International Software, Inc.
Measuring Delivery
How well does your delivery organization meet your clients needs?
–Quality
–Responsiveness
–Throughput
Operational Excellence presented by Bond International Software, Inc.
Quality
Does our company drive quality service?
• Job order qualification
• Candidate qualification
• Submittal management
Operational Excellence presented by Bond International Software, Inc.
Responsiveness
Is our delivery organization fast enough to compete?
– Delays
– Over Processing
– Over Production
Operational Excellence presented by Bond International Software, Inc.
Throughput
Do we have enough horsepower to service our target accounts?
– Sourcing
– Submittal Management
Operational Excellence presented by Bond International Software, Inc.
Sample Delivery Metrics
Measure Category Sample Metrics
Response Time Average time to post
Average time to screen web apps
% of Jobs with submit within 8 hours
% of jobs covered within 48 hours
Quality % of High Touch Jobs
Submittal to Interview
Interview to Hire
Submittal to Hire
Turndowns/False Starts
Response time represents the amount of time it takes for a process
to be completed. In the world of VMS responsiveness oftentimes is
more important than quality.
Operational Excellence presented by Bond International Software, Inc.
Throughput Metrics
Measure Category Sample Metrics
Recruiting # of jobs with no submittal
% of jobs with submittal within 8 hours
# of unique candidates submitted
Submittal to Interview Ratio
Performance Metrics
Bond International Software, Inc.
One world. One future.
www.bond-us.com
800-318-4983
Operational Excellence presented by Bond International Software, Inc.
Performance Metrics
• Performance metrics are measure of individual productivity
• Reviewed on a regular basis
• Should be customized based on the role, mix of business, and experience level
Operational Excellence presented by Bond International Software, Inc.
Why Measure Performance?
• Sets performance expectations
• Identifies weaknesses of desk activity
• Provides opportunity for one on one coaching
• Establishes history of performance
Operational Excellence presented by Bond International Software, Inc.
Sales Performance Metrics
Measure Category Sample Metrics
Activity # of contacts made
# of meetings
Meetings with managers
# Job Orders
# Interviews
Quality # of direct jobs
# of jobs with interview times
Submittal to Interview
Submittal to Hire
# of Hires
Incorporating account plan objectives along with metrics is an excellent
way to elevate the conversation with your sales people and provide a
forum to brainstorm through obstacles. Reviews can be as much about
coaching as they are about accountability.
Operational Excellence presented by Bond International Software, Inc.
Recruiting Performance Metrics
Measure Category Sample Metrics
Activity # of contacts
# of submittals per month
% of jobs covered
Candidates in pipeline
Quality # Interviews
# Placements
Submittal/Interview
Interview/Hire
Submittal/Hire
Operational Excellence presented by Bond International Software, Inc.
Tips for Performance Reviews
• Craft metrics based on your strategy and culture
• Be consistent
• Be prepared
• Communicate goals and objectives
Metrics and Strategic Change
Bond International Software, Inc.
One world. One future.
www.bond-us.com
800-318-4983
Operational Excellence presented by Bond International Software, Inc.
Drivers of Strategic Change
• Change in sales strategy
• Operational overhaul
• Expanding the core business
Operational Excellence presented by Bond International Software, Inc.
Delivery overhaul
• Reorganization
• Process overhaul
– Job Order Management
– Sourcing
– Submittal Management
Operational Excellence presented by Bond International Software, Inc.
Change in Sales Strategy
• Target different account base
• Modify existing offerings
• Reengineer the sales process
Operational Excellence presented by Bond International Software, Inc.
Expanding from the Core
Many staffing company’s are evaluating their strategy in order to stay competitive.
Operational Excellence presented by Bond International Software, Inc.
Why Measure Your Strategy?
• Metrics quantify the change
• Metrics help determine if its feasible
• Metrics provide data for effective change management
• Metrics hold all levels of the organization accountable
Operational Excellence presented by Bond International Software, Inc.
Strategy Focused Organization
Result Objectives• Financial: The ultimate results of the
strategy• Customer: The value the customer receives
Driver Objectives• Process: The activities that create the value• Learning and Growth: How people, technology
and organizational structure support the strategy
Operational Excellence presented by Bond International Software, Inc.
Tools for Management
• Strategy Map captures and aligns
– Sales Strategy
– Operational Success Factors
– Performance Culture
• Balance Scorecard measures the progress of the strategy
Operational Excellence presented by Bond International Software, Inc.
Sample Strategy Map
Operational Excellence presented by Bond International Software, Inc.
Sample Balanced Scorecard
Operational Excellence presented by Bond International Software, Inc.
Wrap Up
• Choose a targeted and well balance portfolio of metrics– Results
– Operations
– Performance Drivers
– Strategy
• The portfolio of metrics should vary based on– Company Strategy
– Team Composition
– Company Size
– Client Base
Question & AnswerThank you for joining us!
Mike [email protected]
Need staffing and recruiting software to measure KPI’s and manage your operations by the numbers? Call us!
Bond International Software, Inc.
One world. One future.
www.bond-us.com
800-318-4983