Productivity Management

9 07 2009

Performance typically ebbs and flows along a number of fronts.  In the worst cases it declines across multiple areas when it is not managed consistently.  Most productivity initiatives create curves something like below:

Productivity Management

  • At point A – we have identified a performance issue and have created a plan to improve performance.
  • At point B – we have succeeded and typically move on to solve another issue.
  • At point C – we start to see productivity decrease from lack of management and attention.

Unfortunately, most things don’t have pretty economic curves or requires focused thought to create one.  And if we do not create a performance plan we typically see the inflection point at C happen closer to A.  This happens because we have not put a plan in place and/or when we feel some momentium we abandon management of the initiative to fight the next battle.





KPI Library: Profit per Employee

14 06 2009

If you are looking for a productivity or effectiveness KPI, a sure place to start is revenue per employee (unless you are in the public sector).

  • It is a straight forward calaculation
  • It is easy for every employee to get their heads around
  • It is a measure of scalability
  • It is a crtical measure for long term success
  • It triggers great conversations about the health and direction of the company

It has one primary weakness in that it is a lagging indicator.

Similar metrics to this are Revenue per Employee, Expense per Employee, Expense per Sale, Profit per Transaction, Profit per Customer.