KPIs

If you’ve been in business for five years or more then it’s time to analyze the health of your landscape company. Key Performance Indicators (KPIs) analyze specific systems, job functions, and the financial state of your company. You then take the results from your KPI and find new ways to be more efficient, bring new clients through your door, and improve employee performance, to name a few.

What are Key Performance Indicators (KPIs)?

KPIs are measurements. They’re a performance indicator to test on all of your company’s systems. For example, you can perform a KPI in your operations department, or you can do a KPI on your profits and losses.

In a nutshell, KPIs evaluate the success of your green or white company or a particular system within your lawn and landscape organization.

A KPI’s results tell part of your company’s story, such as

• Your success at reaching specific targets within your company
•  What’s working and what needs to change in a select part of your business, such as operations or the financial side of your business
•  Clarifying employee roles and responsibilities within your organization
•  Using a short-term project to correct a regularly occurring negative in your company, such as too many unbillable hours during the workweek.

 You can evaluate any area of your landscape company including:

•  Operations – When you perform a KPI on your operations department, you want to look at your gross margins and your overall gross profit.
•  Finances – You can evaluate your cash flow, accounts receivable, and accounts payable. You can see where you’re making money or track clients who don’t pay you on time. Once the numbers are in, you can develop new systems to improve your cash flow, or you can change from spreadsheets to a software program to save you time.
•  Staff performance – You can measure attendance and absenteeism to see who calls off work regularly versus the technicians who show up for work on time every day. You can even use the staff performance KPI to set up an incentive program for employees who have the best attendance.
•  Customers – You can measure and evaluate how well your snow removal company holds onto your regular commercial accounts. One way to evaluate this would be through customer satisfaction surveys. What are the recurring themes that your clients keep bringing up in their reviews? Those are clues to what needs to change.
•  Safety protocols – How many incidents reported to management come in a daily, weekly, or monthly basis? What can you do to teach your employees about safety? Do they need to take a class or should you bring someone in to talk about safety protocols? How much time is lost due to accidents happening on the job? 

• Sales – If you do a KPI on the sales department, how do the estimates stand up against how much work is sold to homeowners? Does the sales team need to change how they approach prospects, or do you need to hire more salespeople?

KPIs Are Not a "One-and-Done" Deal

You’re never done analyzing different parts of your landscape company. You may evaluate one sector of your business with a KPI, and find that the new software you implemented isn’t working for your crews or the accounting department.

KPIs serve as a guide to see what’s working and what’s not working within your organization. You need to evaluate any changes you make and how those changes increase your profits or improve your efficiency over time.

So you change how a particular department works, but you should do another KPI in six months to a year to see how the new system is working.

A KPI may show a need to create a new position within your company or retire a way of doing things—such as using more technology to stop the flow of paper floating around your business.

For example, many crew leaders don’t like to fill out paperwork—especially after a long day working out in the field or plowing snow all night long. So your technicians procrastinate or don’t get these reports back to you on time. As a result, you realize that investing in a software program that will connect the staff in the field with the office makes sense. You get rid of paper timesheets, and you incorporate a new software program. This software connects with crews working out in the field with your accounting department. Your crew leaders use the app provided by the software to note hours spent on a project and any other notes your technician wants to share with you. And crew leaders can do this while sitting in their trucks and tapping a few buttons on their mobile device.

You, then, notice that more employees are filling out timesheets while in their trucks after a long shift. You don’t have to chase them down for hours worked anymore. And your accounting department no longer has to juggle paper anymore—making them more efficient as well.

Avoid these 3 KPI Pitfalls

Every right measurement or practice has areas where things can go wrong. Make sure you don’t fall into any of these three KPI mistakes:

3. Implementing too many KPIs at one time: Like any new habit or system you’re trying to employ within your company, you may be tempted to perform KPIs on every department and every method. But too much at one time causes stress and doesn’t provide the analysis you’re looking for. Instead, start slow and only measure one to three KPIs until it becomes routine. Then you can expand KPIs to different parts of your organization.
4. Thinking that the same KPIs will work for the duration of your company’s life: As was stated above, KPIs are not a one-and-done analysis. We recommend performing a new KPI on a system or department every 6-12 months to see if the changes are working or if you need to try another solution.
5. Not communicating with your staff about the KPIs you’re measuring: No one likes surprises such as being evaluated or having to change a way of doing a job without some warning. And many people don’t like change—especially if they’ve been doing the same job the same way for many years. Make sure you tell your office staff and your crews that you’re analyzing their work performance or how they tackle their jobs to see if things need to be changed or improved upon. Reassure your employees that you’re not changing their position or how they accomplish their daily tasks right away. Instead, you’re just establishing a test to see what’s working and what’s not working within your company.

Some Words of Wisdom Regarding KPIs

At Nextra Consulting, we encourage our clients to perform one KPI at a time, and no more than three KPIs at a time within a company. Otherwise, you could end up suffering from analysis paralysis where nothing gets measured, and your employees start to get frustrated.

KPIs are wonderful tools because they provide accountability within your organization. For example, your A and B players will be happy to stay accountable to you for their job performance. However, don’t expect all of your employees to jump on board. Your C and D players will resist accountability.

Your A and B players will also want to know how they’re doing, what they can improve upon, and if it’s benefiting your company overall. So share the results of your KPI analysis with your teams. KPIs help motivate your employees to continue to work for the success of the company. 

Also, remember that KPI testing takes time to set and measure, but it’s well worth the investment to analyze the health of your company. Eventually, you want your KPIs to match with your profit and losses, so you can continue to be profitable and thriving well into the future.

Do KPIs sound complicated? If you want to save time and have an expert come in to perform KPIs on different departments within your landscape business, please contact us.