Analytic Purpose

Since winning the National Remodeling Quality Award five years ago, Neil Kelly in Portland, Ore., has been listed as one of the best companies to work for in Oregon and has been given a local Better Business Bureau award.

September 30, 2000

Tracking the Indicators
  • Showroom traffic
  • Leads, by type and source
  • Closing ratios
  • Design retainers
  • Projected sales
  • Signed contracts
  • Projected volume
  • On-time performance
  • Customer satisfaction
  • Net profit

  • Since winning the National Remodeling Quality Award five years ago, Neil Kelly in Portland, Ore., has been listed as one of the best companies to work for in Oregon and has been given a local Better Business Bureau award. For many, this string of honors would be a capstone. Not for Neil Kelly. The NRQ Award recognized Kelly’s improvement practices, but the company continues to hone those practices for continual improvement.

    "If we don’t improve, we’re going to fall off [those lists]," says president Tom Kelly, CR. "[Improvement] has become imbedded in our culture. We’re doing it in a self-imposed manner."

    Improvement without measurement isn’t improvement, and Neil Kelly has taken measurement to another level since winning the award. "We were already [tracking progress]," says Julia Spence, vice president of human resources and communications for Neil Kelly. Since winning, "we’re looking at the statistical [data] and are able to analyze them more accurately, rather than anecdotally. We’re taking measuring a lot more seriously."

    Analytical evaluations allow Neil Kelly to plan more accurately, Spence says. "We’ve identified leading indicators for where we’re headed," she says. Tracking these indicators allows the company to "be aware of what’s steering us off course." Showroom traffic is one of those indicators. Neil Kelly uses customer counts and the number of leads to determine traffic; a decline in traffic indicates a sales drop. "We stumbled across these [indicators]," Kelly says. "If you have the statistics, you smell them out."

    Accurate indicators allow the company to set specific goals. The company has become much better at predicting volume, for example. Kelly says a million-dollar division of the company was within $5,000 of the volume projected through seven months. "It’s uncanny how close we were," he says. "That’s a bit unusual in this business."

    As the company’s commitment to measurement has grown, it has found other aspects of the business to analyze -- its targeted employee turnover, for example. Spence says they aren’t necessarily looking at how many employees leave the company, but rather at the positions that are turning over. She says the company views turnover as a function of hiring practices, so they are considering tracking what kinds of ads people respond to, orientation practices within the company, and from where the company is hiring people.

    All the measurement and analysis relate to the company’s goal of quality customer satisfaction, which Kelly says is a function of job quality and on-time completion. So he looks for ways to quantify performance, tying compensation to numerical values. Kelly’s new production manager, for example, has incentives based on customer satisfaction measures and on-time performance. "If it moves up, he gets a bonus. I’m excited about that," Kelly says. "We’ve typically related compensation to financial goals. It’s a change in direction for us."

    Neil Kelly’s ability to alter compensation strategies in order to relate financial rewards more accurately to company goals is a direct result of its ability to measure and track performance. When the company won the NRQ Award, it better understood the importance of quantifiable results. "We’ve always measured a lot," Spence says. "The [NRQ] process had us looking at all different aspects of the business, not just the things that are easy to measure numerically. We know we have the numbers; we just don’t know where they are yet."

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