Key performance indicators (KPIs) show you the inner workings of your business and give you a snapshot of where your business stands. You’ve got a business plan, and KPIs are what you use to measure the success factors that drive your plan. For many, they’re the metrics that determine success, so are a crucial part of running a business.
A key performance indicator is a quantifiable measure a company uses to determine how well it meets set operational and strategic goals. Breaking down your targets into KPIs makes them far more manageable. They can be financial or non-financial, so every variable can be looked at.
The key is to choose metrics which directly affect your customers.
Drill down into each part of your business
Departmental KPIs will allow you to keep control of every aspect of your business. You’ll be able to manage your team based on factual data, so you (or your managers) can start to guide employees effectively, identifying where they might need more training.
Now you need to manage the activity and effectiveness that drive those results. For example, you’ve got your non-financial data and need to calculate how effective this data is to push your business forward.
Get your whole team working towards the same overall goals
Keeping your team onside and working as a unit is fundamental. The educational impact of monitoring KPIs is great – your staff will learn a lot about your business, and thoroughly understand why their work is so important to your company.
The data being generated by KPI management often leads to constructive conversations within the team, who will start asking how they can meet targets quicker, or even beat them.
Use the information to manage employee progress and provide feedback and the workforce will improve their productivity.
Celebrate your uniqueness
Every business is different; therefore, every business will have different goals.
The real-time data that KPI measurements provide allows you to adjust your operation throughout the year. This is a huge benefit, as you’ll be able to identify issues as they happen – sometimes even before they happen.
When it comes to reviewing your profit and loss at the end of the quarter or year, you’ll feel more connected to the figures. Measuring KPIs will prepare you for the eventuality of dealing with your P&L, saving you time, pressure and stress at the end of the given fiscal period.
If you need help with implementing KPI reporting, or need some inspiration for what to monitor in your industry, please get in touch!