Every day a simple signal is generated on Wall Street for CEOs of publicly held companies to let them know how they are doing. That signal is up, down, or unchanged. Unfortunately, many CEOs of privately held companies close the door at the end of the day without any feedback on their performance. They are chasing a market that doesn't seem to be talking to them. They feel like they are in a black box. And they are.
The nature of the CEO is to capture the market; but the nature of the market—or, more to the point, the customer—is to resist capture through objections and ever-increasing demands for faster, better and cheaper.
The term customer loyalty is a misnomer—customers are on the move, and it is up to the CEO to keep up. Yet, it is a lot easier to chase something that you can see, hear, and touch.
Most CEOs of private businesses without good systems and tools in place to win feedback from their customers (other than financial reports or specialized systems that monitor a particular function) are having a difficult time influencing and controlling performance in the eyes of their customers, in good times and bad.
Key Indicators
CEO Dashboards can be a great way to shed light on customers and sales process performance and get feedback on how you as the CEO are performing your role.
The problem with most reporting structures in private companies is that they offer the CEO more data than useful information. Recently, I met with a CEO whose $30 million operation was bleeding badly. He knew he was in trouble because the financial reports clearly showed several service lines where expenses were exceeding revenues.
Unfortunately, those reports had offered no early warning, so now he was reacting to something that was already a serious problem; moreover, the balance sheet gave no indications about where the problem might be.
When driving, an early indicator of, say, low fuel is useful so that one can obtain fuel rather than wait for the car to suddenly come to a stop; it's also nice to know that you need gas, and not an oil change. Otherwise, to diagnose the problem can take time away from solving the specific issue that's dampening performance.
A CEO dashboard can offer the CEO information, in context, regarding the performance of a crucial area of the business system, flagging trouble before the problem fully manifests itself. Context is easily established around a business process once the steps of the process are understood along with their cause-and-effect relationship on each other and on other areas of the business.
Let's take a sales process as an example. Most CEOs find out that sales performance is not there at the end of the quarter or the year; but by using a dashboard to monitor the key performance determinants in their sales process, they could have known that at the beginning—when something could actually have been done about it.
All of your sales come from opportunities, and all of those opportunities come from the people who know you; the audience of people who don't know you but could use your services is larger than the audience of people who know you and are using your services. A very early dashboard indicator of what your sales are going to look like at the end of the year is how many new people are inquiring about your products and services right now.
Private companies will always focus on a percentage increase to the sales plan of, say, 40%, but they will often never detail how they plan to increase inquiries by 40%—only to find out late in the game that they are going to miss the sales plan.
A good CEO dashboard maps key areas of performance in relation to one another. In a sales-process dashboard, many companies use Goldmine, ACT, or Salesforce.com to track their proposal pipeline, appointment levels, or phone call activity; but these are late-term indicators of sales process performance.
They typically are where the least amount of throughput exists, and also in many ways the least amount of leverage. This is to say that if you don't have many deals, then even if you close a lot of them you will still not be where you want to be. So while these systems are good at bringing visibility to the sales management challenge of shepherding opportunity, they are not good monitors of how your sales process is truly performing because they only account for the very late phases of the process.
If something is going wrong now, you will either not know until you are stranded on the side of the road or you will be trying to fix the things you can see while the root causes of those symptoms remain unseen and unchanged.
Valuable Information
CEOs who want to know sooner what will be coming down the pike later will design a dashboard to track the following:
- Money budgeted toward promotional programs that will drive people who don't know you... to know you.
- The rate at which these new folks are flowing to you.
- The rate at which these new folks are then converting into sales leads.
- The rate at which these new folks are then converting to presentations, proposals, and sales.
