In order to continue moving forward and growing as a company it is important to understand how to measure your performance levels and results against defined key business objectives. You can achieve this through your KPI, or Key Performance Indicators, which is a measurable value that you can use to work out how your business is performing in a range of areas.
Some organisations will use KPIs at a range of levels and areas within the business, in order to evaluate whether targets are being met at different stages and tiers of the company. Overall KPIs, with large over-reaching targets can focus on the overall performance and standards of a company as a whole, or large departments within a company, whilst low-level KPIs can focus on individual processes, tasks and individuals, including important measurable statistics for sales teams, marketing, advertising and call centre work.
How to Make a KPI Work for Your Business
Too often the management structure of a company will pay lip service to KPIs and other business jargon, without looking deep enough into the processes to ensure that it is an effective strategy and tool that helps the company grow. It is important to not just put in place KPIs that are used as a standard for the industry you find your business in, for example, but to put together a measurable process for your specific company. Only then can you truly see results and be able to measure the effectiveness of strategies, processes and long-term goals.
As well as making sure that a KPI is specific to your company, department or work process, it also pays off if it works along the same lines as most communication tools within a workplace. The best approach is to create a KPI that is clear, holds only relevant information and is easy to digest for all concerned. This approach leads to a greater ease for staff members to take on board information, desired goals and be able to work towards, and be judged on, those KPIs.
When creating KPIs for your company, dig deep into each relevant area that you wish to study and measure for success. Have an understanding of the basic concepts of a department that you wish to measure, for instance, and understand the overarching organisational objectives and goals, as well as the minutiae that can make those goals a reality. Display a clear funnel of information, goals, workflow processes and areas of responsibility, including feedback from all parties, and you’ll soon develop a clear KPI strategy company-wide.
Defining a KPI
As mentioned above, creating a specific KPI is the best approach, because when you think about it the main word is ‘key’ performance indicator when you look at a KPI. In order to differentiate a KPI from other business metrics, put together a strict list of criteria in order to define your KPI, whether it relates to the company as a whole, an entire department, or for smaller processes and working projects.
Try to figure out what you would like the outcome to be and why that outcome matters to the business. Put in place implementation techniques to measure progress, and have clear responsibilities for certain parties within your organisation. You must also decide before implementing a KPI how often, and how, you will review progress. If, for example, you wish to increase your sales by a certain percentage within the year, you might want to review progress at set points throughout the year. This could be monthly, quarterly, or whichever intervals work best for your practice and workflow.
KPIs are still relevant when used correctly within the business world. Be smart about how you define your KPIs, have clear strategies for implementation and review regularly and comprehensively with designated responsibilities for key staff members. With clever management of KPIs you can steer your company in the right direction and hit key targets and goals over medium to long-term periods.
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