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Impacting Performance Metrics That Really Matter

The senior executives at a new client organization we recently began working with understand the
three business performance metrics that really matter, and how to improve them. They also know
that improving any of these metrics can deliver unexpected bonuses for the business.

These forward-thinking executives know that at the end of the day there are three crucial performance
metrics that comprise the three legged stool that supports all business enterprises. Every organization,
large and small, should closely monitor three metrics that really matter:

● customer satisfaction
● employee satisfaction
● cash flow

Interdependent Metrics

Think of these metrics as interdependent. A positive or negative change in any one metric will affect
at least one other metric, and probably both. Mismanagement of these crucial performance metrics
can tank a marginal business and severely damage even the most successful enterprise.

Facing a decline in customer satisfaction rating, our client’s executive team set a strategic objective
to improve this crucial performance metric. They bet company resources on the notion that training
and educating employees was a key to improving customer satisfaction among the 800 customers
they survey every year.

It’s hard to argue with our client’s reasoning when they increased their customer satisfaction rating
from 94% to 98% in one year. The company’s CEO credits a commitment to employee training and
education with delivering these tangible business results:

● an increased ability to satisfy customers
● an increase in employee satisfaction and a decline in employee turnover
● improved cash flow

In this case, improving one crucial performance metric – customer satisfaction – impacted the other
two metrics. More satisfied customers meant improved employee satisfaction as evidenced by
markedly reduced employee turnover at the company. It should be no surprise that in a well-managed
company, increased revenue affected the third crucial performance metric – cash flow.

Surprise Benefits

The senior executives were pleasantly surprised that a decrease in employee turnover also resulted in
an increase in the company’s management bench strength. This allowed the executives to conduct more
effective succession planning. The CEO believes that the company’s bench strength is increased with
every class taken by employees.

This client’s increase in customer satisfaction, employee satisfaction and cash flow occurred in a
brutally competitive industry and in the middle of a mega-recession. Facing continuous, relentless
pressure on margins and the specter of potential government involvement, regulation and interference
in their industry, our client’s senior managers are convinced that cultivating knowledge workers will
help the company navigate an increasingly volatile economy in the future.

In today’s ruthlessly competitive business environment there is a natural tendency to examine every
corner of business operations and to maximize efficiency and eliminate unnecessary costs. The trick
for senior managers is to never lose focus on any of the three crucial performance metrics that really
matter for all businesses. Our new client has proven that a “learning organization” is the best offensive
weapon in meeting the challenges of improving customer satisfaction, employee satisfaction and
cash flow.

Steve Chriest

About the author: Steve Chriest is the founder of Selling Up™ (www.selling-up.com), a sales consulting
firm specializing in revenue and sales improvement for organizations of all types and sizes in a variety of
industries. He is also the author of Selling The E-Suite, The Proven System For Reaching and Selling
Senior Executives and Profits and Cash – The Game of Business. You can reach Steve at
schriest@selling-up.com.