The Finance Gem 💎 #94: How to Master Your KPIs

Hello Finance Gem collectors. Welcome to Issue no. 94.

Here’s what we’re covering in today’s issue:

• EBITDA is Not Cash Flow. (read on Linkedin)

• Your Adjusted EBITDA Doesn’t Fool Anyone. (read on Linkedin)

• EBITDA Doesn’t Drive Your Valuation. Cash Flow Does. (read on Linkedin)

• How to Master your KPIs - full breakdown- read below

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How to Master your KPIs

What gets measured gets managed.

But most leaders are measuring the wrong things. They track revenue and celebrate EBITDA but overlook the metrics that actually drive sustainable growth.

The result? Scaling stalls. Customers churn. Teams disengage. And leadership scrambles for traction.

High-performing CEOs take a different approach. They look through four critical lenses that reveal what’s really happening beneath the surface. Here’s how:

1. Financial Perspective

Profit is a byproduct. Efficiency is the engine.

Revenue is just the starting point. The real game is in cash flow and operational efficiency. Without cash flow, growth is impossible. And without efficiency, profit margins evaporate.

Profit is a byproduct of efficiency. When you focus on cash flow and cost control, profit follows naturally.

Questions to ask:

• Are you generating enough operating cash to fund strategic initiatives? Are costs aligned with strategic priorities, or are they eating into your margins?Are we protecting cash flow as aggressively as we chase revenue?

• Are our costs strategic or symptomatic of inefficiency?

• Can your business sustain itself and scale profitably?

2. Customer Perspective

Customer acquisition is expensive. Retention is where the real money is. Yet, too many CEOs focus solely on sales and ignore what happens after the sale.

Retention reveals what customers truly think of your product, service, and strategy. If they’re leaving, it’s not just a churn problem—it’s a signal that something is broken.

The most successful CEOs track retention as closely as acquisition. They measure customer lifetime value (LTV) to understand who their most profitable customers are and invest in keeping them.

Questions to ask:

• Are we tracking customer retention with the same intensity as acquisition?

• Are we maximizing lifetime value, or are we stuck in a one-sale mindset?

3. Employee Perspective

Payroll and headcount are easy to track. But they don’t reveal how engaged your teams are—or how much impact they’re actually having.

Engaged employees are 21% more productive, but engagement isn’t just about satisfaction. It’s about alignment. Are teams aligned with the company’s mission and strategic goals? Are they actively contributing to the company’s success, or just punching the clock?

The most effective CEOs measure engagement as a leading indicator of culture health. They track innovation contributions and productivity to spot high-performers and potential flight risks.

Questions to ask:

• Are we creating a culture where employees feel connected to the company’s mission?

• Are we measuring impact, or just hours worked?

4. Skills & Innovation Perspective

Innovation isn’t a buzzword—it’s a KPI. And if you’re not measuring it, you’re falling behind.

The pace at which your team learns and adapts is a competitive advantage. How quickly are they upskilling? How rapidly are new ideas being implemented?

The faster a company can execute on innovative ideas, the greater its edge. But speed to market is only half the equation. The other half is learning velocity. Are teams actively acquiring new skills to keep up with changing market demands?

Key Questions:

• Are we measuring learning speed to ensure our teams are staying relevant?

• Are we prioritizing rapid execution of innovative ideas, or just reacting to the market?

The Bottom Line:
Don’t track everything. Track what matters.

→ Financials
→ Customers
→ Employees
→ Innovation

That’s not just good leadership—it’s good business.

Why Most CEOs Get Cash Flow Wrong - Listen to the Podcast

I recently joined Jim Schleckser on The CEO Project Podcast to discuss why executive financial intelligence is so critical to scaling profitably and driving shareholder value.

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