Most of us track key metrics such as leads, sales, gross, and net profit. But how do you measure your team? How is morale? Do you have weak players who need to improve or be replaced? Does your company structure support your efforts or hinder them?
The best way to measure team strength is to create an open, honest culture that fosters candid dialogue between you and each team member. But it’s still nice to know, in cold hard numbers, how your team’s doing. At Case Design/Remodeling, we use two primary metrics:
Gross profit dollars per team member. Each month, divide total gross profit dollars ([Sales x GP%] x Percent of Completion) by the total number of employees (field + office). Tracking GP dollars this way over the course of six to 12 months shows how efficiently your team is working (see graph, below). It also serves as a target and you challenge your team to inch it up each month. (Note that comparing this number between companies is not as relevant, given the differences in types of projects, business structure, and subcontracted blend.)
Customer recommendation rate. In a service business, clients mirror the morale of the team — and we’re in a service business. If your team is motivated, focused, and caring, they’ll make raving fans of your clients. Don’t just survey your best clients. Survey them all. At Case, we track recommendation rate by salesperson, craftsman, and project manager.
From these flow other “team” metrics, such as compensation, employee turnover, in-house versus subcontractor blend (in the field, but also for office tasks such as payroll and IT), workers’ compensation claims, etc.
But start by tracking the two metrics detailed here on a monthly basis. They’ll give you invaluable insights about your team.
—Bruce Case is president of Case Design/Remodeling, in Bethesda, Md. email@example.com.