Podcast - KPIs For Your Agency’s Operations Team

PODCAST: 26:17 mins

AUTHOR: Chris Martinez, Dude

Do you want to manage your agency’s operations team more effectively? 

Managing a team, regardless of size, is always challenging. I know of this dilemma as I went from a small team of 12 to 90 people at DUDE. 

What you’ll need, though, are the right KPIs to make the management of your agency’s operations team possible. These KPIs are essential to track and gauge their performance and find the right solutions when issues arise.

This, then, sets you and your operations team for success, which results in a win for the entire agency. 

So if you have an operations team and want to know how to manage them better, pay close attention to what I will share with you in this episode.

Transcription:

Chris Martinez  00:00 

Hey, what's up everybody, Chris Martinez. Here I am the host of Operation agency freedom. And today in this episode, we are going to talk about KPIs for your operations team. So, if you have a team that is fulfilling client projects, then you're absolutely going to want to pay attention to this episode. So when I started out, I had a very small team, this is back in 2012, when I started my agency, we had a very, very small team. And then over the years, obviously, now, we have a pretty big team around 90 folks, and I've learned a lot. And one of the biggest lessons that I've learned is that I'm not the best when it comes to managing the operations team. So since we brought on an operations manager, our company has grown tremendously. And he's doing a fantastic job. So I've been able to learn from him and everybody on that team really. And so that's what I'm going to talk about today are the key performance indicators that you need to be managing as the CEO of your agency. And you know, you can take everything that I'm going to teach you today, and try and apply it to your own agency. So if you have an operations team, and you want to figure out how to better manage those folks, if you want to figure out what are some of the objectives that they should be accomplishing, and how to help them accomplish those objectives, and then also just how to be a better manager in general, then you're definitely going to want to pay attention to this episode, because I'm going to share all the things that I've learned over the years and like usual, go to the website, and we'll have the notes and any links that I talked about. And then of course, subscribe to my podcast. And that way, you'll be the first to know when we have a new episode that's coming out. So let's head over to the full episode. All right, welcome back. So we're going to talk about key performance indicators for your operations team. The way that we break out our operations team is it's the team of people that are essentially fulfilling client projects. So these are your designers. These are your developers, copywriters, basically anybody that is touching a client project is on your operations team. And so it is also very helpful if you have an operations manager who basically manages that entire team. That's what I have. Now, when I started though, it was just me, I didn't have a partner, who was supposed to be managing the operations team, but it ended up falling on my shoulders, of course, that person is no longer a partner with me anymore. So I'm going to talk to you guys about some of the the key things that you need to be looking at when you're gauging the success or failure of your operations team. So the first thing that I'm going to talk about is retention. And it could be, I think I see some times where agencies overlook that retention, a lot of the times is impacted by the operations team. So at the end of the day, like it's a collaboration between your customer experience team, and your operations team, because your customer experience team knows what we need to do to keep the clients happy. And your operations team is then responsible for actually delivering that. So the two, you know, really do work hand in hand. So retention is the first thing that I would look at with your operations team, if your retention is not where it needs to be. And your customer experience team is doing everything that they need to be doing, then we need to look deeply at the operations and figure out what's not working. So another way to kind of like put it is that operations is essentially responsible for delivering and hitting the target KPIs that the CX team has uncovered, and knows that drive happy clients. So your CX team is basically like in the weeds with the clients. And they're looking at the data and they know exactly what creates a happy client. That information then gets passed over to the operations team. And they're now responsible for executing on all those things that the CX team knows keep creates happy clients. 

Chris Martinez  04:19 

So it's a very, very symbiotic relationship between the two, your CX team and your operations manager, your CX manager and your operations manager, they need to be talking almost on a daily basis, because those two are so intertwined in terms of keeping the retention number where it needs to be. So another aspect of operations and this is kind of like on the management level. So if you're in your agency, you got a small agency, you're also doing project management and managing the operation side, I'm speaking directly to you. If you are a CEO of an agency and you have an operations manager, then this is something that they need to know is employee ordnance are a part of their job responsibilities. So the operations manager is essentially providing coaching and mentorship to the teams. So within the teams, you can have your design development team, so on and so forth. So the operations manager is responsible for making sure that they are educated, and know how to do their projects and their job to the best of their abilities. Now, if you have managers that are below the operations manager, so like in our instance, we have the operations manager, and then we have pods in the on the pods, they have the pod leader. So that pod leader is kind of like the manager of the pod. So our operations manager is constantly providing education support and coaching and mentorship to the pod leaders. So that's another responsibility that they have. And especially if people are not hitting their goals, then we need to identify what is not being hit, and then figure out a way to coach them so that they are now able to accomplish the goals. It's really, really important that you have data, this is crucial for the way that we manage our folks. So if we have evidence that somebody is not accomplishing what they need to be accomplishing, the first thing that we do is we go into the data, we go into the facts. So we find the conversations, or the tickets, or basically anything that shows us proof like hardcore proof, that's an indisputable that the person made a mistake. And then we talk about the impact that that had on the team on the business on the client, it's very, very important to me, it's not even worth talking to the team member about to try and resolve a problem if you don't have those facts, because then it's almost like hearsay, and that can snowball into a bigger problem. And then you know, people might not be trusting each other, and then you've got a mess. So don't even have the conversation of providing, you know, some feedback to the client or to the team member about what they did wrong, unless you have the facts. So after that, once you establish the facts, then you can work with the team member to create a plan to fix that issue. I personally, my management style is I like to let the team member kind of come up with their plan for improving the performance, I always have an idea of what I want them to do. My goal is to get that person to basically come up with the answer on their own, so that I'm not having to force my plan on them, the chances that that team member is going to implement and successfully fulfil that plan is much, much higher, if they feel like they're the ones that came up with the plan. So typically, anytime and I'm not, you know, going in and giving mentorship mentorship specifically to our designers and our developers, I typically work with the management team, sometimes I'll work with the pod leaders. But at the end of the day, like my goal is to basically help our team members identify Well, first, it's to show them where the problems are, and then help that team member to identify the steps that they need to take to fix that particular issue. If they miss anything, I'll give them a little bit of guidance. I'll say, Well, have you thought about this? Have you thought about maybe doing this? And then I always make sure that we have a deadline. So we have a deadline in terms of when that team member is expected to fix that problem? And 

Chris Martinez  08:25 

what are the things that are going to identify that they've actually fixed the issue. So you never want to want to just like leave it open ended or not like or a little bit vague, you need to say by by this date, so then what you're saying is that by this date, you're going to have accomplished XY and Z. And that way we can go exactly to that date. And we can say you did it, you're fantastic. Great job, thank you very much. Or you can say you know what, you didn't do that. Let's talk about what happened. And then maybe after that, there are some consequences, or you have to come up with a performance improvement plan or something like that. But it's very, very important that you have a clear objective, and a deadline as to how and when that person is going to solve the issue. When they create when that team member creates the the plan themselves, then you know, 99 times out of 100, they're going to be able to hit the target. I can't even remember the last time where the team member ended up creating the plan. I kind of like signed off on it, and the team member did not fix the issue. It works that that method, at least for me and with my team members and our company culture that works really, really well. Now when here's a little kind of bonus is that when that team member accomplishes the goal, we then give that team member the opportunity to teach other people and kind of talk through their experience and what they learned. So now it becomes a teaching moment and that person can kind of take pride in the fact that they fixed an issue and the other team members look up to that individual and they see that they can learn something from that team member, it also lets the team member know that like making mistakes isn't the end of the world. And that fixing them actually, you know, we really, really like to highlight that to everybody else. So it's kind of like a two fold bonus there, maybe as a three fold bonus, I don't know. Okay, so another role of the operations manager is to make sure that we're providing praise and recognition to the team members that are doing really well. This is something that I personally like I'm not very good at. And I think partly because I don't necessarily need praise and recognition all the time. Like, I'm kind of like heads down, I'm just gonna do it. Like, I don't care if you're hating on me, or I don't care if you're giving me praise, like, I'm just gonna keep working. So I kind of overlook the importance of this with other team members, the operations manager is responsible for providing praise and recognition, as is the other managers on the team. And so it's very important that you create a culture of praising and recognising people for doing great things. I think in our industry, in the agency industry, it's something that we definitely don't do enough of. So internally, we have a thing that we call our dynamite dude programme. And this is basically a programme that we created that is ultimately run by the staff. So every single quarter, we have actually, we have an internal web form. And our staff can go and nominate somebody for what we call the dynamite dude award. So how do you win the dynamite dude award, you have to, first of all, the team member is nominating somebody else. So they're going out of their way to help somebody else on their team, get recognition, and ultimately win and win an award, there is no guarantee that it will be reciprocated either. So they're just literally like giving of themselves, their time and their effort to fill this out to help out another team member. It's really, really important that you guys understand the importance of that the dynamite you toward basically the team member who's nominating somebody goes in and writes the specific ticket or the specific event or client, that that team member then went above and beyond the call of duty for to help that person accomplish something. 

Chris Martinez  12:11 

So let me give you an example. So let's say that we had a client request to come in, there was a deadline, it was like nothing else, it was a last minute request. And this team member stayed late and worked and made sure that this particular client was helped beyond normal hours, right. And, you know, let's say that stayed up and did a call with a client was working till like eight or nine o'clock at night when they clearly did not have to do that. But they knew that the impact that it would have on that client and they wanted to make sure the client was taking care of. So they just stayed late, helped the cleanup. So let's say then then that the pod leader, the manager then writes or nominates the employee, the developer who stayed on nominates them and said, Hey, this was the request, this is what they did, it really helped out the client, everybody was happy that it ended up. So then the pod leader submits the dynamite dude nomination that goes to the HR team, and the operations team. And then we all have a quick meeting before our quarterly call. And we say we review all the dark dynamite dude nominations, and we say, Okay, this one definitely hit it. This one did not this one, and it did not on our quarterly meeting, then we recognise all the people who got nominated, and they get a spin on the wheel. And then they get I think it's like anywhere from five to $25 gift card or something like that. So the other thing is that we're recognising the team member who nominated the individual. And that's really important to our culture, because we want to build a culture where we are trying to lift our team members up. So you know that that's just part of what we do and who we are, as a company is we are giving of ourselves to help other people. I talk about this all the time, like one of my favourite Zig Ziglar quotes is that you can have anything that you want in this world, as long as you help enough other people get what they want. So that kind of like this dynamite dude programme plays into that the only caveat with the dynamite dude programme is that none of these nominations can come from me, it all has to come from the other staff. So I'm not I'm actually not able to participate in this programme as much as I want to from time to time. So it really is a programme that is run by the team members not top down, it comes from organically from the team. So that's definitely something that we do that helps us to build this culture of praising and recognising people on a consistent basis. All right, so let's shift gears another responsibility of your operations team is to make sure that they are hitting the deadlines. Oh my god, this is something that is so unbelievably important in my industry, with dude and kind of like the outsourcing nobody, except for us, of course, can hit frickin deadlines. Like I don't understand why it's so hard. I don't know if it's a cultural thing, or they just don't know how to manage the projects properly. But this is everybody's big frustration when they're outsourcing, it's that, you know, the team says, oh, it's going to be ready by this date. And then of course, never ready by that date. And not only is it not ready by the date, but they let you know, like two hours before it's supposed to be ready. So like, you might have told your client, like, Hey, I'm gonna have this ready for you, you know, at this time, and then the people that are responsible for doing the work, they screw it up, and now you've got egg on your face, and you look bad in front of your customer. So to us, we knew going in to starting dude that we had to hit deadlines. So obviously, internally, we've got multiple layers of people looking at work to make sure that we're hitting deadlines, you and your agency, you guys have to hit deadlines, I'm telling you, like, I've talked about bridge connecting deliver hitting deadlines, is very much a part of deliver, you have to be a person of your word, your clients already have a negative taste in their mouth when it comes to working with digital agencies. It's it most likely, it's not even something that you did, you know, they worked with a digital agency who didn't know what the fuck they were doing. And then they screwed, they screwed up the project. And now unfortunately, all the businesses out there kind of package all of the digital marketing people into one box. And they say they all suck, and never do what they say they're going to do, and never hit deadlines. So that's on your shoulders now, agency owner is that you have to hit deadlines, your operations team is very much in charge of hitting the deadlines. So they're going to scope out the projects correctly, they're going to hold everybody accountable, they got to make sure on a daily basis that we're on track to hit deadlines. We also do our internal daily deadline meeting. That's where each team talks to each team member every single morning. And we go through all the tickets that are open. And we have each team member has to say yes, I'm gonna hit the deadline, yes, I'm gonna hit that deadline, yes, I'm gonna hit the deadline. If they have a problem, and they need to talk about it afterwards, then after everybody's gone through their projects, people can talk about the issue. And if people have other team members want to stay on to help that team member get that project back on track, then we can do that right away. So it's so unbelievably important to hit deadlines, I 

Chris Martinez  17:07 

cannot stress that enough. Next responsibility for the operations team is related to QA. So you guys have to make sure that there's great work coming out, nothing should go out to a client, unless it's the best work that you can that you can do, in my opinion, it's better to extend the deadline out. But and you want to do this at the beginning, make an ETA longer if it's going to ensure that the work is fantastic, don't rush a deadline and compromise on the quality of the work. It's just not worth it. So we have a QA team. So we have an end, we have processes and everything. So they fall under the operations team and the operations manager. So we have certain metrics that we're looking at for them, like how many client complaints are we getting, because of QA, like we have a number that they have to keep it below the QA team is also incentivized, based on how great the work is. So like, if they have a certain number of complaints, then they you know, have a they have a bonus. So they either don't get the full bonus, or they don't get any bonus. So it's really important that the QA team is doing a fantastic job and hitting their targets. One of the things that we have our operations manager doing, like getting now shifting now into the numbers is that we have the operations manager who also is aware of the productivity, the cost of goods sold, and the gross margin for the teams. So in our case, we have pods, right. So we've got, I don't know, seven pods, or however many we have. And each pod is responsible for hitting a specific gross margin. So the operations manager knows what the salaries are for each of those the team members on each pod and the revenue. And so we make sure that that percentage of labour falls in line with the revenue and what we need to see in terms of gross margin, the operations manager is very much in charge of that. So he or she can move team members around if needed to ensure that we're hitting the margins that we need. So it's another set of eyes to manage that aspect of the business, obviously, like they're not the only ones who are controlling that financial piece of the puzzle, we've got the accounting team, the finance team that's looking at that. And then of course, I'm looking at it as well. But it does help, especially if you're a smaller team, if you can have an operations person that can kind of be that second set of eyes really makes your job a lot easier. And they're also going to be able to come up with solutions. If you're having an issue. If they are privy to that information, then they can come up with a solution. And then you guys can kind of brainstorm on what's the best way to solve any particular issues. So that's very, very important. One thing that I want you all to understand when it comes to the operations team in general is this concept of utilisation. So back before I started my agency, or actually I think I might have been doing this when I was moving now this is before I started the agency I was working for a charter bus company. So for those that don't know, I had my first business in 2007 I started a print soccer magazine and didn't know anything about running a print publication, I lost everything. And then started learning about digital marketing in my free time. But in between my business going under that soccer magazine going under me starting the digital agency, I worked for a charter bus company doing sales. And that was when I was first introduced to this concept of utilisation. So in the bus business, you know, you got 52 seats on a bus, and that bus can only run a maximum of 10 hours per day. And you know, in any given month, 30-31 days a month, so let's just call it 30.4, I think is the actual multiple, so you can run 10 hours a day times 30. So that means you have 300 hours a month, that bus can run the full utilisation of that bus then is 300 hours, you cannot exceed more than 300 hours. Why is it 10 hours, not 24. Because legally, you cannot operate a bus more than 10 hours a day. You cannot have a driver behind the wheel for more than 10 hours a day. That's the legal maximum. They do that to make sure that people aren't driving tired or being pushed too hard. And then you have accidents and people die. And that's obviously bad. So that was the utilisation. So they say basically, the way that the bus business works is they say that if the bus is running for I believe 60% of the time, that should be your break even point. So most of these bus companies, these charter bus companies that are doing like tours and stuff, 

Chris Martinez  21:23 

they you know, buy the bus on a loan. And so let's say they buy the bus for half a million bucks and their month, their note on that is I don't know $20,000 a month. So you need to price out your daily rates, your 10 hour rate so that at 60% utilisation with gas and everything, driver fees, gas, everything you're hit, you're breaking even on that coach running for let's just call it 20 days a month, and then everything there after those other 10 days a month or a profit. That's typically how the bus business works. So I learned that and then I was like now that I'm running the agency and I have a big team. And I'm like, wow, like we have a total utilisation number with our teams, what we learned is that even though our staff are working 40 hours a week, it is unrealistic, that we can have them be working on client work for the full 40 hours. It's just unrealistic. It's too much typically for one person to be able to do because you reach a certain point where the quality of the work starts to go down. It varies from person to person. But typically there is a there is a limit so that we consider that almost like a utilisation, I believe that the number with our pods that we learned is that if it's if it's over 90%, there are total hours that are going towards client projects, we will typically start to see issues on the QA side. So we look at the utilisation of the team on a weekly and a monthly basis. And then we can kind of predict whether or not we need to add another team member to that team. Or maybe break up the pot and open up a new pod, that's definitely something that we look at this will absolutely help you to avoid burnout as well, your team members need to know that you know, like you're not just going to keep pushing them until they break. And then what happens is they'll burn out and quit and you'll lose people. So that's really important to understand. It's just like having the operations team, specifically the operations manager looking at that utilisation of the team in terms of hours, but first you got to establish what that is for you, I would say it's probably going to be about 90 to 90% for you too. But making sure that we're not burning people out and then proactively adding people to the team. Other quick tips on the operations side of it is making sure that the operations team is helping people to advance and get promotions. So that's something that we do is we look at the people that are advancing to new positions that are growing within the company learning new skills to really important to us. And so we track that. And that's actually something that the operations manager is also responsible for, and then that there's a collaboration on that between ops and HR, because HR, then if they, if the ops team is doing what they need to do, and making sure that people are advancing and learning and wanting to learn grow within the company, the HR needs to make sure that those trainings are created, so that those people can actually accomplish their own personal goals, which is great. And that's basically it. You know, like, I know, I went through a lot of things very quickly. But those are going to be my top things for your operations team. And a lot of this is geared around the operations manager and what they need to be responsible for so that you have a great well oiled machine that doesn't break. And so if you are the operations manager and the CEO, then obviously these are things that you need to take into consideration. And you can start to build processes and SOPs and managing these KPIs. If you have an operations manager, then maybe on your next meeting with that individual, you can start to talk about some of these items. And any things that's missing, slowly start to introduce those in. But I promise you if you follow this framework, you will start to see a big difference in your operations. Things will move more smoothly and ultimately you're going to have better margins, and you're going to be a much more profitable healthy agency. So that's it for today on operations KPIs if you have any questions, of course, you can reach out and ask me a question. I'll do my best to get back to you as fast as possible. And I hope to see you on the next episode. Thank you so much for listening. If you enjoyed this episode, it would mean so much to me, if you could share it with your friends, family, and basically anyone who will find the same value in this episode that you did. And to get the latest from me, then let's definitely connect on social media. Go to Facebook facebook.com, forward slash dude, agency or Instagram at dude agency.io or you can check us out on YouTube on our YouTube channel. And then of course, you can always visit our website at dudeagency.io where you can see all of our other episodes of operation agency freedom. You can also register for any live trainings that we have going on, on how to run a highly profitable agency. And of course, you can see how we help digital agencies with the people processes and the education so that they can take on more projects and scale profitably. Thanks again and I will see you next time.