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[Translation from English to Japanese ] How to Make Sense of KPIs It’s funny how KPIs can become so confusing when i...
Original Texts
How to Make Sense of KPIs
It’s funny how KPIs can become so confusing when it comes to measuring performance on an individual level. Say for example, $10 million could be clear as an organization sales target. But in contrast, it would not be so clear for a sales person. It could motivate the sales team to reach that goal but often it doesn’t communicate exactly what a person has to do individually in order for the team to to hit that $10 million target. At a recent startup conference at Ho Chi Minh, Vietnam, I had the privilege to learn from some very experienced entrepreneurs. One of them is Pawoot Pongvitayapanu who runs Tarad.com, and he shared a little bit about his experience of having his company acquired by Japanese e-commerce giant Rakuten. Rakuten brought much discipline into his company. He mentioned repeatedly that one of the most important lessons he learned from Rakuten was to set key performance indicators (KPI) and make them understandable and actionable at individual level. So let’s take that $10 million sales target as an example. This organization target could be broken down into groups and then down to an individual level. For example, if John is set to hit $300,000 worth of sales, then what would it take for him to hit that target? To illustrate my point, I have assumed some numbers below:
・His deal/close rate is five percent
・The target per deal is at $10,000
・Each work day, he can speak to a maximum of three potential clients According to the figures above, we can calculate that each month John can pitch a maximum of 60 times. So if he does that, he should be able to achieve $30,000 worth of sales (60 x 5% x $10,000). That means John should be able to hit his sales target in ten months if he works hard enough. With the figure broken down to an individual level, the numbers have now become actionable.
John now knows he is required to make a total of 600 sales pitches to hit his $300,000 KPI for the year. Anything above 600 sales pitches will give him a better chance to outperform his KPI. Most importantly, John can now see in more tangible terms that the figure is achievable. Sometimes, goals are set unrealistically and it could be mathematically impossible to achieve them. For example, if John’s KPI is $500,000, then it’s practically mathematically impossible that he could hit the numbers. Based on his statistics, John can hit a maximum of $360,000 of sales in a year. Of course, along the way his closing rate or sales total could go higher, but from a management point of view, it’s better not to account for those chances. Lastly, from a startup CEO point of view, breaking down KPIs to individual level can help you understand if you have enough manpower to hit the organization’s KPIs, and that’s a good way to avoid over-promising and under-delivering to your shareholders. The same principle can be applied across all kinds of KPIs which you might be measuring. Good luck!
From all of us here at TechInAsia, we hope you have a Merry Christmas, and that you achieve all your KPIs in 2013!
It’s funny how KPIs can become so confusing when it comes to measuring performance on an individual level. Say for example, $10 million could be clear as an organization sales target. But in contrast, it would not be so clear for a sales person. It could motivate the sales team to reach that goal but often it doesn’t communicate exactly what a person has to do individually in order for the team to to hit that $10 million target. At a recent startup conference at Ho Chi Minh, Vietnam, I had the privilege to learn from some very experienced entrepreneurs. One of them is Pawoot Pongvitayapanu who runs Tarad.com, and he shared a little bit about his experience of having his company acquired by Japanese e-commerce giant Rakuten. Rakuten brought much discipline into his company. He mentioned repeatedly that one of the most important lessons he learned from Rakuten was to set key performance indicators (KPI) and make them understandable and actionable at individual level. So let’s take that $10 million sales target as an example. This organization target could be broken down into groups and then down to an individual level. For example, if John is set to hit $300,000 worth of sales, then what would it take for him to hit that target? To illustrate my point, I have assumed some numbers below:
・His deal/close rate is five percent
・The target per deal is at $10,000
・Each work day, he can speak to a maximum of three potential clients According to the figures above, we can calculate that each month John can pitch a maximum of 60 times. So if he does that, he should be able to achieve $30,000 worth of sales (60 x 5% x $10,000). That means John should be able to hit his sales target in ten months if he works hard enough. With the figure broken down to an individual level, the numbers have now become actionable.
John now knows he is required to make a total of 600 sales pitches to hit his $300,000 KPI for the year. Anything above 600 sales pitches will give him a better chance to outperform his KPI. Most importantly, John can now see in more tangible terms that the figure is achievable. Sometimes, goals are set unrealistically and it could be mathematically impossible to achieve them. For example, if John’s KPI is $500,000, then it’s practically mathematically impossible that he could hit the numbers. Based on his statistics, John can hit a maximum of $360,000 of sales in a year. Of course, along the way his closing rate or sales total could go higher, but from a management point of view, it’s better not to account for those chances. Lastly, from a startup CEO point of view, breaking down KPIs to individual level can help you understand if you have enough manpower to hit the organization’s KPIs, and that’s a good way to avoid over-promising and under-delivering to your shareholders. The same principle can be applied across all kinds of KPIs which you might be measuring. Good luck!
From all of us here at TechInAsia, we hope you have a Merry Christmas, and that you achieve all your KPIs in 2013!
Translated by
zhizi
KPIの理解のしかた
不思議なことに、個人レベルの業績を図るとき、KPIがなぜか分かりにくいものになってしまうことがある。例えば、1000万ドルという額は組織の売上目標としては明確なものだろう。だが、それに反して、その額は営業マンにとってはそれほど明確ではないかもしれない。売上目標は営業チームがその目標を達成するための意欲を起こさせるが、チームがその1000万ドルの売上目標を達成するために個々の営業マンがいったい何をするべきなのかを正確に伝えていないことが多い。
不思議なことに、個人レベルの業績を図るとき、KPIがなぜか分かりにくいものになってしまうことがある。例えば、1000万ドルという額は組織の売上目標としては明確なものだろう。だが、それに反して、その額は営業マンにとってはそれほど明確ではないかもしれない。売上目標は営業チームがその目標を達成するための意欲を起こさせるが、チームがその1000万ドルの売上目標を達成するために個々の営業マンがいったい何をするべきなのかを正確に伝えていないことが多い。
ベトナム・ホーチミンで最近開催されたスタートアップのカンフェランスで、私は光栄にも非常に経験豊かな起業家の数人に学ぶことができた。そのうちの1人はTarad.comを運営しているPawoot Pongvitayapanu氏で、同氏は同社が日本のeコマース企業大手の楽天に買収された経験について少し語った。
楽天はTarad.comに多くの規律を導入した。同氏が楽天から学んだ最も重要な教えの1つは、重要業績評価指標(KPI)を設定し個人レベルで理解ができ実行可能なものにすることだったと同氏は繰り返し述べた。そこで、これを先に触れた1000万ドルの売上目標を例えにして考えてみよう。例えば、Johnが30万ドルの売上目標を立てるとする。この目標を達成するために、Johnは何をしなければならないのか?私が言っていることを説明するために、下にいくつかの仮の数字を作った。
・Johnの販売契約成約率は5%
・取引ごとの目標額は1万ドル
・1日の営業でJohnが可能な売り込み件数は最大3社
・Johnの販売契約成約率は5%
・取引ごとの目標額は1万ドル
・1日の営業でJohnが可能な売り込み件数は最大3社
上の数字に基づいて計算すると、Johnは毎月最大60回の売り込みができる。だから、Johnが60回の売り込みをすれば、3万ドル(60 x 5% x $10,000)の売上を達成することができるはずだ。つまり、彼が一生懸命働けば10か月で目標を達成できる。個人レベルにまで目標を落とし込めば、その数字は実行可能となるわけだ。
Johnはその目標から、年間目標の30万ドルを達成するために合計600回の売り込みをしなければならないことを理解している。Johnが600回を超える売り込みをすれば、彼自身のKPIを上回る業績を残せるチャンスは大きくなる。最も重要なことは、Johnが目標数字が達成可能だということを、より現実味のある形で見ることができるということだ。
Johnはその目標から、年間目標の30万ドルを達成するために合計600回の売り込みをしなければならないことを理解している。Johnが600回を超える売り込みをすれば、彼自身のKPIを上回る業績を残せるチャンスは大きくなる。最も重要なことは、Johnが目標数字が達成可能だということを、より現実味のある形で見ることができるということだ。
非現実的な目標が設定されていたり、計算しても達成不可能な目標があることもある。例えば、JohnのKPIが50万ドルだったとしよう。だが、Johnがその目標を達成するのは計算しても実質上不可能なことが分かる。彼の数字に基づくと、Johnは1年に最大36万ドルの売上を達成することができる。もちろん、その過程で成約率もしくは総売上額が高くなることもあるだろう。だが、管理職の立場から見れば、そういうチャンスは見込まないほうがいい。
最後に、スタートアップのCEOという観点から言えば、KPIを個人レベルにまで落とし込めば、組織のKIPを達成するのに十分な人材がいるかを理解するのに役立つし、これは利害関係者に大きな約束をして目標未達成という事態を避けることのできるよい方法でもある。これと同じ原理は、あらゆる種類のKPIに用いることができる。頑張って!
メリークリスマス!皆さんが2013年のKPIを達成できますように!
TechInAsiaスタッフ一同より
メリークリスマス!皆さんが2013年のKPIを達成できますように!
TechInAsiaスタッフ一同より
Result of Translation in Conyac
- Number of Characters of Requests:
- 3048letters
- Translation Language
- English → Japanese
- Translation Fee
- $68.58
- Translation Time
- about 6 hours
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