MetricsBased Processes Enable Growth You steer where you
Metrics-Based Processes Enable Growth You steer where you stare! Presented by: Austin W. Boyd whitespace innovations. All rights reserved.
Overview Metrics-Based Processes Enable Growth Vision Strategy Market Research Capture Opportunity Identification 2 whitespace innovations. All rights reserved. Proposal
Background • 12 years Board of Directors, Choose Life of North Alabama – Building Chairman, Capital Campaign Chairman • 17 years of successful business development activities supporting major prime contractors on federal procurements – CEO, Whitespace Innovations: Fueling business innovation. – Tools for business development. Consulting for growth. – 171 proposals as capture manager, proposal manager/development, or significant support. $3. 4 B in wins. 60%+ win rate on prime and sub-contracts • 25 years of innovation and program management as Navy pilot, flight test engineer, and spacecraft systems engineer. – 5000 flight hours with multiple inventions, patents and publications. You steer where you stare. 3 whitespace innovations. All rights reserved.
Our Focus for Today • “What is measured, improves. ” – Peter Drucker • "If you cannot measure it, you can not improve it. ” – Lord Kelvin • Pearson's Law: "That which is measured improves. That which is measured and reported improves exponentially. " – Karl Pearson • “You steer where you stare. When trouble arises you must look where you want to go. ” – Gary Magwood, former national car racing champion and instructor 4 whitespace innovations. All rights reserved.
Be Careful Where You Stare 5 whitespace innovations. All rights reserved.
Other Words of Warning • You get what you measure – If you measure how many trips you take, you will take more trips • BUT… – If you measure how much work you accomplish on a trip, you will accomplish more work – If you measure how many donors you have on your list, it will grow • BUT… – If you measure your dollars per donor, or your dollars raised per quarter, that will also grow • Move away from data and move toward metrics. – Data is just a collection of facts. You need information that leads to knowledge… that leads to action – Metrics are actionable measures associated with core business processes 6 whitespace innovations. All rights reserved.
Where to Stare • Focus on metrics that matter most to the performance and viability of a particular department • Process: – What is our vision for the organization? Answer the key question • “What’s the point of it all? ” Always start with the question “Why? ” – Establish a strategy for your organization • “What will we do to accomplish this vision? How will we do it? ” – Establish actionable goals that fulfill that strategy • “What? ” “When? ” “Where? ” “How much? ” – Brainstorm metrics that measure those actionable goals Dollars raised. Clients served. Revenue growth. • Lives saved. Meals served. Homes found for children. • – Establish a process to gather the metric data and report it • Establish a “battle rhythm. ” 7 whitespace innovations. All rights reserved.
The Basics • Define goals – The vision for your organization is not always shared across the employee base. Find ways to communicate goals and to engage. – Employees who understand goals will better embrace metrics. Encourage employees to brainstorm metrics that support goals. • Create a team – Find individuals committed to the company goals, to structure, and to accountability – Ensure executive sponsorship and top-down support for organizational goals • Define metrics and related processes – Define what you will measure and how. Establish a schedule to gather and report. • Document data sources – Where will you turn to get the data? Is someone a critical link in gaining information? Is someone in the way? • Establish a battle rhythm and stick to it – Regular short meetings that are the heartbeat of daily operations 8 whitespace innovations. All rights reserved.
Battle Rhythm See: Mastering the Rockefeller Habits, Harnish Schedule Name Purpose Attendees Materials Required Daily @ 8: 30 ½ hour Finance Review • Daily eye on cash and bills • Identify daily priorities for bill payment and bill collection CEO, COO, Controller, AP/AR • Cash flow analysis, Bank account summary, Vital signs report • Revenue-profit summary • 3 -week “Bills to pay” summary • “Client past due” summary Wednesdays @ 9: 00 Staff Meeting • Cash flow & profitability update • “ 3 minute summary” from staff • Actions from CEO • Weekly staff training item CEO, COO, Sr. Staff, Storefront Mgrs • Cash flow analysis, “Vital Signs” Revenue-profit summary • “Client past due” summary • Staff member “ 3 minute summary” Monthly 1 hr per storefront Storefront Financial Review • Review EACs • Review profitability • Update individual Storefront RPS CEO, COO, Controller Storefront Manager • Revenue-profit summary (RPS) • Storefront RPS, and Salary summary • Estimates at Completion (EACs) • Client “past due” summary Quarterly Report to the Board Report on revenue, profit , cash flow, strategic vision. CEO, BOD, Attorney All reports in binder. Need 7 copies Annually in November 1 hr per storefront Annual Business Plan Each Storefront manager reports on next year fiscal plan using nextyear RPS CEO, COO, Controller, Storefront Manager • Next fiscal year Storefront plans • Corporate roll-up of next fiscal yr. RPS • Prior year RPS for Corporate • Prior year RPS’s for Storefronts Annually in Jan-Feb Audit End of year book review, audited financials for Board, tax purposes CEO, COO, Controller, AP/AR, Auditors • All reports, summary of bills • Financial books, bank statements 9 whitespace innovations. All rights reserved.
Metrics versus KPIs • Technically speaking… – A Key Performance Indicator (KPI) is a high level measurement such as customer satisfaction, revenue growth, profitability – A KPI depends on lower level metrics KPI: Customer satisfaction • Metrics: Numbers of customers, numbers of returns, survey results • • Ideally: – KPIs flow down from the top, reflecting organizational goals • In reality: – In most organizations, KPIs come from the bottom of the organization, as a result of departments following a key parameter – The act of measuring something in one department “bubbles up” to the entire group. 10 whitespace innovations. All rights reserved.
What and How Do We Measure? Vision Strategy Market Research Capture Opportunity Identification 11 whitespace innovations. All rights reserved. Proposal
Measuring “Vision” • It’s not as hard as it sounds • First, measure your organization – Ask your people “What is our vision? Why are we here? What’s the point of it all? ” – Keep track of the answers, and give feedback to your leadership • Second, measure your clients – Ask them if they have heard of your organizational vision – Ask your clients if they agree, and how they would change vision • Third, measure the public – Does anyone know that you exist? – Downtown Rescue Mission story: From quiet mission to “Non-profit of the Year 2010” – Choose Life story: 10% exposure in 2003 to “Non-Profit of the Year” 2011 • Fourth, do something about it – Metrics without response don’t mean much… – Involve your team in the response to what you learn. Vision starts at the top. 12 whitespace innovations. All rights reserved.
Measuring Strategy 13 whitespace innovations. All rights reserved.
Measuring Opportunities $100 000 $90 000 $80 000 $70 000 $60 000 Backlog $50 000 Category Target Actual % of Target Opportunity Capture Submitted Backlog $1, 000. 00 $103. 02 $205. 50 $166. 72 $384. 74 10% 21% 17% 38% 86% Customer Big Company Small Company Mid-Size Company Little Bitty Company Opportunity Name/Description LRDR Austin Consulting Rainer Consulting Category Submitted Backlog Backlog Submitted $40 000 $30 000 Capture $20 000 Opportunity $10 000 20 15 20 Q 15 1 20 Q 16 3 20 Q 16 1 20 Q 17 3 20 Q 17 1 20 Q 18 3 20 Q 18 1 20 Q 19 3 20 Q 19 1 20 Q 20 3 20 Q 20 1 20 Q 21 3 20 Q 21 1 Q 3 $0 Location Huntsville, AL Tullahoma, TN Huntsville, AL Notes Expected Start Expected # of Projected End Date Months Date 9/1/15 60 8/30/20 1/1/15 60 12/31/19 3/1/15 60 2/28/20 1/1/15 60 12/31/19 5/1/15 36 4/30/18 14 whitespace innovations. All rights reserved. Expected Monthly Rev $2, 500 $6, 500 $2, 400 $1, 200 $1, 500 p. Win Value 67% 85% 95% 67% Total Factored Value ($k) $100. 5 $331. 5 $122. 4 $68. 4 $60. 3 $36. 2
Measuring Capture (Prospecting) Composite Probability of Win (CPw) Calculator Category Weight Copyright 2015, Austin Boyd, Whitespace Innovations, Inc. 5/25/15 Criteria Customer relationship A We have identified the key decision makers for the program and we understand their perceptions of the program requirements, our company, and our competition. We have met with the key decision makers to reach these conclusions, and have written correspondence to substantiate our understanding. Prior Experience with Similar programs We have bid on, won, and executed the same kind of work in the past. Our record on that performance is clear, and we are comfortable bidding on this work. If this work involves Firm We have bid on similar but not the same kind of We have not bid on work of this kind before. We Fixed Price (FFP) work, we have completed prior FFP programs work in the past. We have experience with FFP, work in the past. We do not have experience with have no experience with FFP, SCA or union (as successfully and at a profit. If this bid requires Service SCA, or union work (as appropriate) but not with FFP, SCA or union work (as appropriate). Contract Act (SCA) or union employee work, we have this customer. experience with SCA and unions that can be referred to with positive endorsements. 3 1 Total weights B C We have identified the key decision makers for the We have identified the key decision makers for program and understand some of their the program. Have not met the decision makers perceptions, through direct meetings or written and have no direct written correspondence. Selection Score A 7. 5 A 2. 5 40 Win Probability Element #1: 1 Customer requirements D We do not know the key decision makers for this program and have no written correspondence about their understanding of our company or the competition. Total "Pursue-No Pursue" Score based on inputs above 46% We thoroughly understand all customer requirements, have documented these We have a good understanding We have some understanding requirements, and have validated same. of the customer requirements These requirements have been validated based on reliable sources. based on limited resources. through personal meetings with the customer, the KO, and/or COTR. 15 whitespace innovations. All rights reserved.
Measuring Proposals (Sales) September Week #1 Sales Activity Sales Lead Focus Area Contacts (Phone, email, other) Medical, AMRDEC, Boyd Energy, Other Sales Person 1 Federal OEMs Consumer Sales Person 2 OEMs Sales Person 3 Federal bids Meetings and Tours Lunch 28 50 13 6 5 14 1 8 97 28 Pipeline $$ Proposals Submitted Value $1, 213, 444 $450, 889 White paper 1 $280, 100 13 $231, 883 $3, 445, 678 2 $686400 15 $5, 314, 894 3 $966, 500 2 Proposals Sold $$ Sold 2 $290, 304 Proposals Submitted: Magic electronic ducks Big think tank services Honey plumber air freshener Tech services white paper (Boyd) $280, 100. 00 $8, 400. 00 $678, 000. 00 N/A Proposals Won: Frozen Spinach Shake Maker Gold-Plated Carrot Peeler See Joe Email 16 whitespace innovations. All rights reserved. $134, 998 $155, 306
Measuring the Budget 17 whitespace innovations. All rights reserved.
Measuring Cash Flow Austin’s Cash Flow Recommendations: Monday 07/26/10 12, 922. 63 Incoming Outgoing • Put someone in charge who is accountable and who will be frank • Review it EVERY DAY for half an hour • Project out at least a month, three is better • Document every unusual item with a comment box • Plan ahead… 4, 000. 00 Tuesday Wednesday Thursday 07/27/10 07/28/10 07/29/10 1, 399. 50 95. 00 1, 727. 00 2, 222. 86 95. 00 1, 312. 00 350. 00 2, 865. 07 866. 94 2, 618. 75 225. 39 709. 72 157. 22 Mgmt Reserve Friday 07/30/10 113, 831. 73 50, 628. 00 30, 825. 00 5, 000. 00 A/P 36, 369. 00 Balance Forward Daily Cash Balance 160, 328. 54 169, 251. 17 168, 427. 81 The Big Loan The Line of Credit 136, 944. 63 85, 389. 44 Money Market 25, 547. 73 12 week DSO 26. 61966 26. 27774 28. 97809 159, 167. 82 1, 160. 72 160, 328. 54 168, 090. 45 1, 160. 72 169, 251. 17 167, 267. 09 1, 160. 72 168, 427. 81 23, 732. 10 42, 170. 20 65, 902. 30 25, 621. 65 42, 170. 20 67, 791. 85 26, 579. 88 17, 124. 64 43, 704. 52 1, 216. 82 369. 77 Operating Account The Other Account AX (due 10 th) Master. Card (due 1 st) Set Aside Fund Spot Bonus Fund 18 whitespace innovations. All rights reserved. 165, 657. 74 166, 517. 80 238, 980. 53
Measuring Performance $700 000, 00 Revenue Net Income Quarter $600 000, 00 416. 8 -99. 7 That Year Qtr 1 486. 6 -71 That Year Qtr 2 539. 4 -31. 7 That Year Qtr 3 $500 000, 00 $400 000, 00 Quarterly Revenue to Net Income 0 0 100 200 300 400 500 600 $300 000, 00 Invoicing $200 000, 00 Revenue Net Income -20 -60 -80 -100 -120 Net Income $100 000, 00 -40 Break even predicted at $653. 7 K revenue Revenue y = 0. 5471 x - 330. 61 R² = 0. 9715 $0, 00 1 2 3 ($100 000, 00) ($200 000, 00) 19 whitespace innovations. All rights reserved. QTR 1 QTR 2 QTR 3
Measuring Performance 50 Profit versus Revenue 25 0 -25 0 100 200 300 400 500 600 700 -50 -75 -100 -125 Based on 15 months of history Profit Linear(Profit) -150 -175 20 whitespace innovations. All rights reserved.
Measuring Donor Support Donor List Track by person or by organization Consider how you track your donor base: • • • Confidentiality is essential Keep track of whom you contact and when. What results? Experiment with “sociograms” – Who knows whom? Reach outside your normal comfort zone for new faces Biblical adage: “You have not because you ask not. ” 21 whitespace innovations. All rights reserved.
Measuring Client Service 22 whitespace innovations. All rights reserved.
You Steer Where You Stare Battle Rhythm Vision Strategy Pipeline Assessment Capture - Sales Reports - Win Reports - Performance Reports - Cash Flow - Budgets - Client Service - Donor Reports Surveys of employees, clients, public Market Research One page strategic plan Opportunity Identification 23 whitespace innovations. All rights reserved. Win Probability Proposal and Actions
Keep Your Eyes On the Road 24 whitespace innovations. All rights reserved.
Point of contact Austin W. Boyd 5021 Bradford Drive Suite 140 Huntsville, AL 35805 256. 890. 2694 256. 679. 0689 austin. boyd@whitespaceinnovations. com www. whitespaceinnovations. com Innovation. We pioneer fresh ideas. “Let us fix our eyes on Jesus, the author and perfecter of our faith, who for the joy set before him endured the cross, scorning its shame, and sat down at the right hand of the throne of God. ” Hebrews 12: 2 (NIV) 25 whitespace innovations. All rights reserved.
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