Essential KPI Strategies for Small Business Success With Tracy Duhaney

Transform your business operations by closely monitoring Key Performance Indicators (KPIs) with insights from Tracy Duhaney, principal consultant and founder of the Amboseli Group. Tracy redefines KPIs as tools to "Keep People Informed," fostering a more inclusive and adaptable workplace culture. This episode highlights the significance of KPIs for small businesses, the optimal number to track, and the importance of involving employees to reduce friction and uncertainty.

Tracy also shares why prioritizing data over intuition is crucial and explores effective methods for tracking KPIs. Learn how frequent monitoring can catch significant variations early, aiding informed business decisions. Tracy’s expertise shows how managers can turn data into actionable insights, particularly in customer satisfaction, ensuring business stability and growth. Don’t miss Tracy’s fresh perspective on KPIs and her actionable advice, which could be a game-changer for your personal and professional development.

Visit us at jenniferannjohnson.com and learn how Jennifer can help you build the life you dream of with her online academy, blog, one-on-one coaching, and a variety of other resources!

Transcript

Jennifer Johnson: 0:36

Today we welcome back into the studio Tracy Duhaney, and she is with the Amboseli Group and she is the principal consultant and the founder of the Amboseli Group. Welcome back, thank you for having me. I'm excited to be here. So last time we talked about change and how change is constant. It's always happening. There's always going to be something around the curve, something around the bend.

Tracy Duhaney: 0:56

Yes.

Jennifer Johnson: 0:57

But the key or the important thing here and that is key is to be prepared. Yes, no matter what it is.

Tracy Duhaney: 1:04

Yes, Be prepared by having a flexible, innovative culture and mindset, not just for the leaders but for the entire organization.

Jennifer Johnson: 1:13

So with that, I want to talk about KPIs. People hear that word, especially coming from a small business mindset, right? Yes, people hear KPI and they're from a small business mindset, right? People hear KPI and they're like what? What is that? I don't know what that is. Yes, and then when they hear what it is, they're like, okay, well, I kind of understand it, but what does it have to do with me and my business? I know.

Tracy Duhaney: 1:37

It's like that addition to the alphabet soup where the letters just start flowing and you're like KPI this, kpi, this flowing, and you're like KPI this, kpi, this Right, huh, uh-huh, exactly so. Key performance indicators, those typical measurements that businesses use to track their performance, that's really all it is. You can have ones similar to client retention, client success, profit margin, customer satisfaction, internal employee satisfaction. The list goes on and on and on, depending on the business, but also depending on what you're looking to track. My favorite KPI, which has gained recent popularity and I love it because it's about time is just saying keep people informed. The new KPI, okay.

Jennifer Johnson: 2:16

Because, oh, I get the play on the word now?

Tracy Duhaney: 2:19

Yes, keep people informed, because that's the thing we tend to just move things around as business leaders. We tend to make decisions and the employees are kind of just following Right, and they have no idea why we're doing it. They're just following, and what that does is it creates friction and uncertainty, and in today's world where labor force and employee retention are so low, keeping people informed is one of those avenues to pursue, to make sure that your employees know why we're doing what we're doing. So they're also a part of the solution.

Jennifer Johnson: 2:57

Because people like being part of the solution. Right, they want a bigger reason.

Tracy Duhaney: 3:02

Yes, and they don't like feeling like a pawn on a chessboard, and that is one of the biggest things, One of the biggest analogies I like to use I'm not a pawn. I may not be the king, the queen or the knight, but I'm not a pawn.

Tracy Duhaney: 3:15

I want to know how we're playing the game, why we're playing the game that way. And now I'm not saying pull them into the board meeting every single time there's an executive decision that needs to be made, but help them understand why or how we got here. And that involves leadership, that involves the different tiers of your leadership having them understand how we got there so that they can disseminate the information.

Jennifer Johnson: 3:37

So you talked about. You know there's all kinds of different KPIs, right? How many is too many? How many should you have? What are there? You know I'm going with that.

Tracy Duhaney: 3:48

If you go online, they'll tell you about five popular KPIs, but you can have as many as you need to, depending on what you're looking to track. If I'm looking to track customer satisfaction, that entire KPI can have its own sub KPIs. I was wondering about that. Yes, because you can have their different measurements for customer success or customer satisfaction coming from their return rate, how much they spend, what are their reviews saying, the number of reviews, how long are their reviews, how frequent are their reviews? There are different things that come in to say, okay, I want to track customer satisfaction, but that's where you have to identify what am I going to use to track this and stick to it, because people can get a little off the deep end with all the different measurement tactics that are out there and when you start measuring everything, you're not measuring anything.

Jennifer Johnson: 4:35

I like that and we're going to talk a little bit about in the next half how we're going to be able to track them. But I loved how you used the play on the words the KPI keep people informed.

Tracy Duhaney: 4:46

I wish I could take credit for that, but I can't.

Jennifer Johnson: 4:48

I just love it because it's Communication is one of and I know we're talking about KPIs, but this is all falling with it but communication is one of the things within companies that people get the most frustrated with and that's a lot of times why people leave.

Tracy Duhaney: 5:02

Yes, and the funny thing is, leaders think that they're communicating very well, but there's clearly a discrepancy between what leaders think they're communicating and what employees are receiving. For them to say well, we didn't know about that, we're not informed. But then if you ask certain leaders, they say no, what we told them Did you Right or did you think you told them?

Jennifer Johnson: 5:22

And you know, kind of going back to change. Right, if you were to lay it all out to your employees and say this is what we're doing, but this is why we are doing it, they are going I'm guessing maybe there's been studies done around this, I don't know that they would be more open to that change. They would be more open to that change if they know why.

Tracy Duhaney: 5:41

They would be more open to it. But it's also one of those things that I like to say get your employees involved In making the change or coming up with it.

Tracy Duhaney: 5:53

Coming up with a solution. Again, I'm not saying bring your employees to the boardroom table. What I'm saying is from the different departments, right, you have your employees on the front line, who are the ones most involved with whatever challenge exists or whatever change is going to be made. They're the ones executing it. Right, get them involved. Get them involved with their own supervisors, their own managers, their own leaders to say, hey, this is what we're thinking, any ideas, what frustrations or bottlenecks do you foresee with that? Because that way, people are part of the process.

Tracy Duhaney: 6:22

That is the missing link that tends to happen where it's go, go, go. Going back to that pawn analogy, like, just go here, just go here, just go here. No, have them a part of it to say, okay, we want to do change and we want to do this particular change. Here's the solution. We're thinking Any concerns solution. We're thinking any concerns. And you'd be surprised, especially when you have product lines and you have turnaround times, that employees come back and will say well, what about this? Leadership tends not to think about that because they're not on the front line.

Jennifer Johnson: 6:52

You're very right about that, and because you may be opening them up to their suggestions, they become more vested, yes, more satisfied, yes.

Tracy Duhaney: 7:02

The key part is, though, that if you're not going to go with their suggested solution, tell them why.

Jennifer Johnson: 7:08

Okay, that's a very good point, because that's, I think, why leaders sometimes shy away from asking employees, because, well, what if I don't like their ideas?

Tracy Duhaney: 7:18

Which is fine. But again it comes back to if you have 10 employees that give suggestions. Now, I'm not saying if you have 1,000 employees in your entire organization, 1,000 are going to get feedback. You probably will have a very small percentage that gives feedback. But even if you have 10 that give feedback to their managers and their managers pass it up the line right, hopefully it's not a game of. Part of that is okay. That's a good idea. Here's what else we're thinking out. Maybe we, you know, table that for another time, but here's why that wouldn't work. But I like the way you're thinking. I like the thought process.

Tracy Duhaney: 7:56

How did you get there? Because you're also simultaneously, a lot of people forget when you bring these employees in and those that respond and are engaged. That's the start to those that want to build a future with your organization. They could be your next leaders. You're building them now in the pipeline. As to, you're invested. You care right, two important things, and now you want to see the company succeed. Let's start seeing how we can progress with this to the next stage Now. Not everyone's born to be, or desires to be, a leader, but now you can identify those employees that are vested that care, and you can capitalize on that in different ways. It doesn't just have to be you're the next manager or supervisor, but there are different ways you can really incorporate them into the business Right and using them.

Jennifer Johnson: 8:42

I've always heard the saying different souls for different roles and you can kind of see those people percolate, bubble up to the top from all of that if you let them.

Tracy Duhaney: 8:52

Absolutely, and the great part about that is I know we were talking about change, but it also comes back to culture, right? If you have those same 10 employees in this example that are willing to speak up when it comes to change, those could also be the ones to help you keep a pulse on your culture, because they're willing to speak up, they're willing to engage, they're willing to give feedback.

Jennifer Johnson: 9:10

Very good point Right.

Tracy Duhaney: 9:11

So you really want to cultivate that. But if you create a culture of not asking for that feedback or not getting that input, well, employers are going to say, well, you don't really care, so why should I say anything? I'm just here to do my job. And then, when things start to fall apart, leaders tend to say uh-oh what happened.

Jennifer Johnson: 9:26

It's too late.

Tracy Duhaney: 9:26

How'd we get there? We got here a long time ago, right?

Jennifer Johnson: 9:30

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Tracy Duhaney: 10:14

KPIs and how that stems to change and how it ties into cultures, with employees Having a grand old time All the fun things to talk about. We are right.

Jennifer Johnson: 10:23

So how often should a business go back and look or change maybe, their KPIs?

Tracy Duhaney: 10:30

Well, kpis are something you should be monitoring frequently. It's not a case where you say I'm going to look quarterly or I'm going to look annually. No, that is something especially depending on the KPI. You should be looking at that frequently, but not just as a leader or executive leadership level. Your manager should have an understanding as to the value and why we're measuring, whatever it is that we're measuring, so they keep a pulse on it as well. That is extremely important because that tends to happen just like a business plan.

Tracy Duhaney: 10:55

You create it, it goes in the desk drawer and it's in the drawer. We did it, we know what's in there, but it just sits there. It's something you should be frequently, because, at the same time, when you see the results of what you're measuring, when there's variation and I don't mean slight variation, but significant variation that's when we start also asking the questions wait, what happened here? It's not just a fluke. I hate treating anything as a fluke. Let's investigate what happened with this, because what we don't want to happen is that we say it's a fluke and then three months later, the fluke is still here and now we're trying to repair what we Because it's always.

Jennifer Johnson: 11:34

We look back in retrospect and go. If only I would have paid attention to that.

Tracy Duhaney: 11:39

Hindsight is 20-20, right it is it totally is.

Tracy Duhaney: 11:41

So look at them often, look at them a lot, so that you can keep your pulse on it and catch some micro change or micro blip that's happening, well, not catch it but monitor it, because it can be a case where we know that the holidays are here and whatever happens, whatever volatility in the market is happening, with the stock exchange, for example, right, we know that that could be a factor, but as long as we are aware of what the potential reason is and then monitor it, from there I see yes.

Jennifer Johnson: 12:11

I see. So what, ultimately, do we hope that these KPIs will do for us? Change our business, keep us afloat, help us make better business decisions. Yes, to all of you.

Tracy Duhaney: 12:25

All of that. It's interesting because the KPI of keep people informed should also be looked at. Keep me informed because, as a business leader, your KPIs are there to help you track so you can make better decisions. Because what happens is we tend to think, oh, I know it, the reason is this, or I assume this or this happened because of this, but data doesn't lie right. That is, people do, people do.

Tracy Duhaney: 12:49

Data doesn't lie right and our intuitions, our emotional side to this makes us want to believe that something is this way because of X, Y, Z, but when you look at the data, it could be completely opposite. So you use your KPIs to keep you informed so that you can make the best decisions possible.

Jennifer Johnson: 13:05

So getting down to the brass taxes of all this is how do we track this? Do we have a spreadsheet?

Tracy Duhaney: 13:12

It all depends on the KPI that you're tracking. There are different platforms out there that help you track KPIs. You put in what you want it to track, you put in the sources that they're gathering the data for and it runs it for you. You could also have an internal team. Usually your managers are involved in this because, again, they need to be intimately involved. But for small to medium-sized businesses that may not have the ability to invest in these larger software, you keep it internal and you identify if it is a spreadsheet. I think with spreadsheet it needs manual entry.

Tracy Duhaney: 13:42

It's not pulling from anywhere you can bring in your AI tool.

Jennifer Johnson: 13:45

I know we don't really like talking about that negative word no, but let's talk about that when you're done with that thought.

Tracy Duhaney: 13:51

Yeah, so for however you're choosing or however you're able to, based on your resources, to track your KPI. If it means a spreadsheet and you have someone manually entering, there's opportunity for error with that, but it's a start. It's better than nothing. At least you're doing it. At least you're doing it. You have organizations now that can utilize AI and pull in the different platforms that they are part of and analyze the data and spit out. Here's your results.

Jennifer Johnson: 14:16

I always say verify and analyze the data and spit out here's your results.

Tracy Duhaney: 14:19

I always say verify, trust, but verify, because AI is great, but trust, but verify Right and you can use it so that it helps you be more efficient. But if you don't have the ability to do that or you don't understand how to do it, that's fine. You can also seek a consultant, because a consultant can come in and help you get it set up, help train you and your team, because the important part to remember is it's not just on you. The final decisions may be on the business owner and the executive team, but your managers have to be involved. They have to understand what they're tracking, they have to understand why and what it means.

Jennifer Johnson: 14:51

I think that's the key part why and what does this mean? Right?

Tracy Duhaney: 14:59

And that's the part that it's hard for some people to grasp, because they think it's just more work.

Jennifer Johnson: 15:02

Of course, all of a sudden you want me to now track this.

Tracy Duhaney: 15:03

Why am I going to do this? This is more work. Well, let's come back to the example of customer satisfaction. If we don't know if our customers are satisfied until it's too late and they're starting to go to the surprise competitor next door, then our business goes down. And then what happens? If we don't have the income coming in, we can't survive, and then we have an entire team that may be out of business. Now, that's a dire example, but really and truly, that's part of the what are our customers saying? Because we can't know if we're satisfying our customers or meeting their needs if we don't listen to what they're saying.

Jennifer Johnson: 15:32

Very true and and you know going, I'm just thinking out loud here you know tracking your customer satisfaction. You know something I'm just taking that as an example you can do a survey, right, you can track all that with your survey. But the other part of that is is somebody needs to act on those results?

Tracy Duhaney: 15:53

Yes, Right, that's the that's the crux of it. You have to take the data and do something with it. You can't just sit in your desk drawer or in a saved file on the computer and say, well, we did it. Well, what does it say?

Jennifer Johnson: 16:06

Oh, I don't know, I'm scared. I don't want to look at it.

Tracy Duhaney: 16:09

And that is the biggest problem, because if you believe subjectively that you are satisfying your customers, the data should follow. But if you're scared to look at that, there is a disconnect and it's almost the fear of knowing, because when you know, you either have to correct it and if you don't, that's really on you, that's ownership and accountability, versus if you don't know, you can always make yourself believe.

Jennifer Johnson: 16:32

Right, it's a mind thing.

Tracy Duhaney: 16:34

It's great, Customers are satisfied. It's great, it's economy they're not spending as much. They're not doing this. That's why they're not coming back. It could be something so simple as well.

Jennifer Johnson: 16:42

The hospitality has gone down when I walk in the door.

Tracy Duhaney: 16:45

Something so easy to fix, but because we're afraid of the answer, we tend to overlook it. Then it becomes this big problem, and now we're trying to scramble and pull our hair out, saying what do we?

Jennifer Johnson: 16:56

do? We can't dig our heads in the sand. We need to unearth whatever it is. We have to be ready for the truth, Absolutely, Absolutely Well. This has been a fun conversation. I know. You know I love to keep people informed. I'm just stuck on that because that's not how we traditionally think of KPIs.

Tracy Duhaney: 17:17

It's not, and I, again, I wish I could take credit for it. I don't even know who at this point can take credit for it, but it is definitely a popular term that has evolved in 2023 and probably before, but it just gained traction now and it's the pure truth of keep people and yourself informed.

Jennifer Johnson: 17:32

I love it, Tracy. If our listeners would like to get ahold of you, how can they do?

Tracy Duhaney: 17:36

so Well, they can start by visiting my website, wwwtheamboseligroupcom. They can send me an email at Tracy T-R-A-C-Y at theamboseligroupcom, or you can give us a call at 239-682-1282.

Jennifer Johnson: 17:51

Fabulous. Thank you so much Thank you.