KPIs across the organization

Jeff Breunsbach

Just pulling in a question from CS Leadership Office Hours today...

How are you working with the organization to set KPIs/Goals that become more cross-functional?

@Jake Mesaritis

Jordan Silverman

Let me start by saying this is something we are always trying to improve on.

For 2022 planning what we did was:
- CEO told us MRR goals for the company
- Sales, Marketing, and CS got together to build a go to market plan of how we get there
- Product, dev, tech then said what do we need to support these
- Entire leadership team gets together to discuss

All leadership and employee OKRs then roll up to these department and company goals.

Jodi Millen

Such a great question.  I have experienced a range of fantastic cross-organizational KPIs initiatives to a failure to align and establish them to a complete lack of them.  Here are my observations of where cross-organizational KPIs hit it out of the park and where they crashed and burned:
1) Cross-organizational KPIs are essential for overall organizational effectiveness.  I feel like I am completely overstating the obvious here, but having both worked and consulted for organizations that are at great risk because of a lack of cross-departmental communication and collaboration and yet insist on keeping departments in strict silos...I've seen and experienced first-hand quite a lot in various industries so I've learned that it is not always so obvious.

2) Skin-in-the-Game Culture.  The workplace has to have a culture of sincere collaboration and mutual success.  Again, going back to silos, if no one understands how their work impacts and can benefit others (and vice versa) it will be impossible to set KPIs.  I've seen this primarily in sales-business development-customer success-project/program delivery relationships.  When I say culture, I mean when an organization rewards sales teams for wins but not any related department that may have contributed to those wins, it going to be very difficult to get the "unrewarded" on board.   When I was a market research analyst for a major broadcaster, we received quarterly bonuses based on the sales success of the teams we supported.  The bonus was not as high, but it was appropriately relative.  Because we had skin in the game, it provided motivation for us to go above and beyond the call of duty and work with our regional sales reps and their teams to set KPIs that we would all benefit from and so would the company.

3) Cognitive Diversity & Collaboration.  The best cross-organizational KPI-setting structure I've ever been a part of was as part of resource development for a $100M+ charity organization.  After each annual campaign, the organization did a 3-day offsite that brought in all departments: fundraising, marketing, program delivery, grant distribution, finance, IT - everyone.  We learned where each of us was succeeding and challenged.  Where donors, sponsors, and volunteers were engaging and advocating and not.  What each person and team needed to do their job really well and what prevented them from doing it.  We set KPIs for our relationships with every department and those KPIs consistently guided us like a well-oiled crew to a lighthouse.   
All this to say, I believe that cross-organizational KPIs only function and succeed when everyone understands the importance or impact of the KPIs to themselves and the team they work with.   And sometimes that requires a shift in organizational culture.
Just my ten cents.

Jeff Heckler

One very successful high-level top-down approach I've been a leader within:

1. Clearly defined, succinct (3-5), numbers for overall company goals.
2. Deconstruct the overall company goals into metrics owned and contributions #/% by the Revenue Teams (Sales, CS, Marketing).
3. Revenue Team Leaders reverse engineer their Teams' metrics down to Groups, Sub-Teams, and then, ICs.
4. All orgs, teams, and ICs measured and % bonus/commission/variable on the 3-5 overall company goals, as well as, their individual KPIs.

Why it works:

Transparency, alignment up-down, all teams focused on the same top metrics, ownership from C-Suite to ICs.

MarketSource, Inc.

Top 25 CS Influencer, 2021
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Original Message:
Sent: 12-09-2021 12:31
From: Jeff Breunsbach
Subject: KPIs across the organization

Just pulling in a question from CS Leadership Office Hours today...

How are you working with the organization to set KPIs/Goals that become more cross-functional?

@Jake Mesaritis

Ed Powers

I had a unique opportunity to learn how world-class organizations do it when I served as an Examiner for the Malcolm Baldrige National Quality Award for 9 years. Top firms understand naturally occurring silo-ism leads to what Deming called "suboptimization"--functions maximize their own KPIs (often earning big bonuses) at the expense of the whole company ("I win, we lose"). For example, the CEO demands the VP Sales to increase revenue 20% while telling the VP Operations to reduce costs by 20%. What happens? The VP Sales hits his goal while bringing in lots of poorly qualified, bad-fit customers while the VP Ops hits her goal by laying off lots of delivery personnel. As a result, customers become frustrated because the company can't deliver, leading them to cancel their orders and walk away. The company earns a bad reputation and sales dwindle, leading to more cuts and a death spiral. 

One way top companies prevent this is by looking past functional hierarchies and focusing on Key Business Processes, essential cross-functional workflows like New Product Introduction, Customer Acquisition, Value Delivery, etc. The CEO assigns each senior VP to own a KBP, start to finish, making them responsible for continuous performance improvement across functions. For example, a VP Engineering would own the NPI process which involves everyone: Product, Sales, Marketing, Engineering, Support, even Finance and Accounting. The VP Engineering is responsible and accountable for tracking and improving key end results, such as Time-to-Market. The approach encourages the VP to influence changes in other functions, and since other VPs must do the same with their own KBPs, healthy coalition-building and negotiation takes place in the background, leading to improvements across the enterprise. The CEO then ensures all functional KPIs incorporate KBP KPIs, creating a web of metrics that all work together harmoniously. Metrics then help break down vertical silos in favor of horizontal workflows. 

What does this have to do with Customer Success? One could argue that customer retention and growth is an enterprise-wide pursuit, a KBP with its own KPIs, owned by the CEO or CCO. He/she/they would study the factors that lead to customer loyalty, and similarly define process metrics, deploy them throughout functional KPIs, and drive cross-functional, continuous improvement in products, services, and processes. This is how breakthrough performance can occur (>95% logo and product retention with >120% NRR) year after year, and there's no reason why SaaS companies can't adopt similar practices of MBNQA winners.

Jeff Heckler

Great furthering of the conversation, as always, @Ed Powers.

In the manner you outline, I've been involved with successes by completely constructing customer journey maps from Trail-to-Pay all the way to Onboarding and Customer for Life.  Included in these segmented subjourneys (I Search (organic and paid), I Sign Up, I Trial, I Pay, etc.) all execs responsible for these are involved.  We've used Miro and other tools.