We monitor our car’s dashboard to avoid running out of gas or blowing up the engine… but do you monitor your business’s dashboard? It’s important to identify metrics that matter to effectively drive business performance.
Key Performance Indicators (KPI’s) provide measurable ways to monitor important
metrics, but most importantly, KPI’s are a fast way of identifying if you are on track or off
track.
At Kendons we recommend identifying three – five key business drivers to monitor regularly
that drive success within your plan and assist in achieving goals.
Here’s how we recommend implementing a KPI structure (or dashboard).
1. Determine which Key Performance Indicators (KPIs) are important.
These KPIs should have the greatest influence on achieving the plan or goal. For example, if
the goal is to increase revenue it could be to maintain an average hourly rate invoiced of $X,
or achieve X% gross margin for any job. Perhaps the goal might be to increase customer
service levels so therefore a KPI of responding to all customer enquiries within 24 hours
could be a great place to start.
When deciding which KPIs are important, constructively look at the KPIs and decide which
ones, when increased or decreased, will have the biggest impact on future results? Choose
no more than five to measure and focus on.
2. Work out how to measure your chosen KPIs.
The measurement process should be automated wherever possible. Most software as a
service (Saas) such as accounting packages, customer relationship management software
or job tracking software will measure KPIs.
3. Produce a simple one-page report.
Produce a report either weekly, fortnightly or monthly to track results and progress. Set
aside time to go through this report every time it’s produced and share the results with the
team. Even better, some Saas products have a dashboard upon logging on so you can see
these reports in real time, daily.
4. Repeat these steps with your team.
Identify the KPIs each team member should be monitoring. These will be different from the
KPIs for your overall business but should align with the plan/goals. KPIs help your team
understand the definition of a great day’s work for them. Monitoring and reporting the KPIs
regularly will help your team know if they’re on track.
Implementing KPIs into your business is a great way to get clear on what elements require
focus to achieve goals and plans. Once set, it’s a matter of simply monitoring and tracking
KPIs to stay on track, and, if performance is dropping, implement amendments quickly to
get back on track.
And remember, the most successful businesses have accountability to make sure Step
Three happens!
Speak to us today about how Kendons can assist with identifying metrics that matter for
your business.