Small Business

The Measure of Your Management


By Martin Babinec

At TriNet, for example, sales and marketing directors watch leading indicators, such as the number of raw leads coming in, the flow of Requests for Proposals through the Web site, and the number of meetings scheduled by the sales people. Sales forecasts are adjusted to reflect those numbers, and each executive attends to activities that drive those indicators.

The pressure that is put upon the executives spreads quickly throughout the company. During our recent fourth quarter, our top team created a campaign called "Autumn Leads," which tracked customers and prospect referrals and rewarded the internal employees who helped solicit them. Although sales executives were ultimately responsible for meeting their metrics, the energy generated by their efforts was detectable at every level of the company. The result? TriNet had its best sales month ever.

WALKING THE TALK. A set measuring system helps break down the interdepartmental friction that takes hold at mature companies. When TriNet's staff more than tripled in the late 1990s, turf battles increased. The goal became getting employees to communicate and work together.

The metrics we established enabled our leaders to act as if our large company was still a small one. The bigger the company, the harder it is for employees to see the connection between their efforts and top-level goals, such as increasing profit. Establishing a link between job-related expectations and executive-level metrics helps make that connection abundantly clear.

Another plus is that metrics helps guard against executives being moved into jobs for which they aren't suited, the so-called Peter Principle. As a company matures, certain executives who rose quickly and served admirably during the early days won't have the skills necessary for the next stage.

Having a loyal yet no-longer-effective executive on staff poses a gut-wrenching dilemma for the entrepreneur. It is important to do right by a long-term employee who has shown great value in the past, but it is also important to act in the best interests of the organization. A measurement system assures that the focus is on results when evaluating executive team members, thus reducing the need to rely on personal feelings. When the numbers are in black and white, I have found that some executives often elect on their own to leave.

The guerilla approach to a company works when the agenda for business each day is pure survival, and executives are picked solely for their skill as individual contributors. As the business grows larger, that kind of spontaneity needs to be exchanged for a formal system of building, maintaining, and communicating the company's goals. It's not possible to eliminate growing pains completely, but moving from free-form chaos to shared executive metrics will go a long way towards ensuring a company's continued vitality.

Martin Babinec, 48, founded TriNet Group, Inc., based in San Leandro, Calif., in 1988, and currently serves as president and chief executive officer. TriNet Group, Inc., which outsources human resource services for equity-financed high-technology companies, has annual revenue of $32 million and offices in 10 cities in the United States, as well as a satellite office in Toronto, Canada. Babinec spent most of his earlier career managing international human resources in Asia and Europe. He consults frequently for nonprofit organizations and speaks at international conferences on entrepreneurship, human resources and trends in high technology. A recipient of an Entrepreneur of the Year award, he received a bachelor's degree in business administration from Shippensburg University in Pennsylvania. He is a member of the international Young Entrepreneurs Organization.

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