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FUTURE NUMBERS To see around corners, CEOs are getting creative with KPIs— and looking beyond the usual measures of success. BY RUSS BANHAM
J
im Eickhoff was blindsided by Covid. The chief executive of Creative Dining, a privately held provider of cafeteria-style food management services to large businesses, universities, hospitals and senior citizen centers, with approximately $100 million in annual revenues, he saw his business almost totally evaporate overnight in April 2020. Cafeterias at universities, colleges and corporate facilities shut down by the thousands, as students transitioned to distance learning, and employees to remote work. Creative Dining’s 2,000-strong full-time workforce across 14 states dwindled to about 400 employees, the remaining workers serving up food at hospitals and senior citizen centers. As for the other 1,600, they were furloughed for an undetermined period. Now, as he looks to plot a course forward, the kinds of traditional metrics he’s monitored can’t tell him much about where he’s going—or how to get there. “The classic financial indicators like revenue and profit trends didn’t tell us much of anything last
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year, other than things were not good, not good at all,” he says. And so, like a lot of CEOs reading the tea leaves for the remainder of 2021 and beyond, Eickhoff is breaking from the traditional financial metrics he relies on to comprehend business opportunities and risks. As a result, this year may prove to be a turning point in the decade-long rise of nontraditional “soft” ways of evaluating performance. “Our client CEOs are grappling with trying to sense the extraordinary shifts that are underway, to know if the choices they’re making or not making are appropriate for the circumstances,” says Lara Abrash, chair and CEO of Big Four audit firm Deloitte & Touche. “The KPIs they typically rely on to sense these shifts don’t always tell the whole story.” Traditional KPIs are lagging indicators that may come in too late to make a needed pivot, says Abrash. “To sense trends in the behaviors of employees and customers, you need leading indicators.” For Eickhoff, that means calculating the percentage of non-working managers and employees attending an ongoing series of bimonthly and monthly virtual gatherings.
