Key Performance, How do you Measure?

How can key performance indicators (KPI) help your business thrive? Business owners and CEOs need to ask themselves what they are trying to accomplish with their business. Yes, this is where the mission statement / philosophy is important to be communicated to everyone in the organization but also internalized. Organizations with a powerful sense of mission and purpose helps in empowering employees to act on their own in a responsible and productive way.
 
Developing the right KPIs can keep the business on track to accomplish their goals. Creating the most effective KPI is a team effort which will allow stakeholders to spot trends and aberrations to expectation, that they can act. The landscape is ever changing as assumptions and circumstances change. Your KPIs should act like a feedback loop showing what is happening compared to your projected targets. Best practice is to have the data entry as automated as possible and done at frequent and regular intervals if you want to use it as a management tool not just something to show investor how you are doing.
 
Favorite KPIs executives love:
Revenue growth, customer growth, profit margins, costs reduction, sales growth
Company divisions or departments have different KPIs that may include:
Customer satisfaction, cost per part, defect rate, production rate, employee satisfaction, ship rate, web site traffic, sales rate, customer retention rate, cash flow
 
The best KPIs are characterized as:

• Objective and Specific
• Able to measure progress (quantifiable) to your projections
• Realistically attainable,
• D relevant to your groups mission
• Time frame for achieving your goals with check points along the way

 
There are various software programs which can help your organization create and track key performance indicators. I personally like going old school and creating customized formulas in an Excel spread sheet although this may at time meet the best practice of automated inputs.
 
Tells what you’re doing to not just monitor your business performance with KPI but how you use it to get better.







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