1. © Copyright Gazelles Systems, Inc. 2006-2011 1 Metrics Targets, KPIs & Critical Numbers Execute For Growth

2. © Copyright Gazelles Systems, Inc. 2006-2011 2 Metrics 1.Targets: Future Goals 2.KPIs: Key Performance Indicators 3.Critical #s: Drive Priorities

3. © Copyright Gazelles Systems, Inc. 2006-2011 Leading vs. Lagging Indicators 3 Leading indicators GUIDE you. They give you a glimpse into the future and help you see where you need to make adjustments. Lagging indicators REPORT the results. They let you know where you ended up. They are driven by your leading indicators.

4. © Copyright Gazelles Systems, Inc. 2006-2011 Targets 4 A handful of goals/results that you set and strive to achieve over a period of time. Examples: Annual Revenue, EBITDA, # of Customers Are always Lagging Indicators

5. © Copyright Gazelles Systems, Inc. 2006-2011 KPIs: Key Performance Indicators 5 Ongoing metrics that track and measure the health of the company over time. Examples: On time delivery, Client Health Indx, Net Promoter Score, Quality Can be Leading or Lagging Indicators

6. © Copyright Gazelles Systems, Inc. 2006-2011 Critical #s 6 Metrics designed to drive a company priority that will be highlighted for a specific period of time for the purpose of making an improvement in the company. Examples: could be any of your KPIs or something new Should always be Leading Indicators

7. © Copyright Gazelles Systems, Inc. 2006-2011 KPIs & Critical Numbers should: focus us on the right things provide insightful information on important areas of the business show us where we need to make adjustments, before it’s too late be Leading Indicators whenever possible 7

8. © Copyright Gazelles Systems, Inc. 2006-2011 How to Find Your Leading Indicator 8 1.What is your desired outcome? 2.What causes that outcome? 3.Ask How/What/Why 4 to 5 times. Begin with the end in mind then peel back the layers of the onion

9. © Copyright Gazelles Systems, Inc. 2006-2011 Example 9 1.What is your desired outcome? $X Monthly Revenue 2.What causes that outcome? Monthly Revenue is caused by closing deals. To create $x Monthly Revenue, we must close 20 deals 3.Ask How/What/Why 3 to 4 times. How: We close 20% of strong leads, so to close 20 deals, we need 100 strong leads. What: To get 100 strong leads, we need to generate 500 qualified leads. What’s the criteria for a qualified lead: prospect who has accepted a meeting and has a budget How can we generate 125 qualified leads every week? KPI = # Qualified Leads every week

10. © Copyright Gazelles Systems, Inc. 2006-2011 KPI Examples Employee Turnover Strengths Survey Index Employee NPS Customer NPS - Net Promoter Score Client Health Index Shareholders Price/share # Months cash runway 10 Make / Buy/ Deliver Quality / Bugs Supplier mistakes On time delivery Sell Sales actual vs plan # Qualified Leads Records (Finance) A/R Days Cashflow Relationships/People Productivity/Process

11. © Copyright Gazelles Systems, Inc. 2006-2011 Red/Yellow/Green Success Criteria 11 Green : Success: what’s our goal? Red : Unacceptable: When do we have a real problem? Yellow : Between Red & Green: this is your warning sign – time to act before Red SuperGreen : Time to Celebrate!

12. © Copyright Gazelles Systems, Inc. 2006-2011 Use the KPI Creator Tool 12 1.What is your main business problem? 2.Desired outcome? 3.Questions? 4.Leading Indicator with R/Y/G 5.Corrective action plans for Red & Yellow results

13. © Copyright Gazelles Systems, Inc. 2006-2011 Pitfalls to Avoid 13 1.KPIs for KPIs sake…. “not sure who uses this, but we’ve always measured it.” 2.Running the business with all Lagging Indicators…. and thinking you can effect the future 3.Too many KPIs in one category Limit to 1 - 3 max