Key performance indicators (KPIs) help you make business decisions based on what’s working or not working for your business. Every business should have them. They may be as simple as a sales revenue report or a monthly customer count, but no matter how simple or complex your KPIs are, establishing, monitoring, and continually evaluating them is vital to your business’s success. Many resources are available to help determine which KPIs are relevant to your organization and can help you gather the information needed to track those KPIs.
Start with your goals. You need to know what you are trying to achieve before you can decide what you want to measure. A one-page strategic business plan can be a helpful first step. Outline your organization’s goals and objectives and what deliverables or actions you need to achieve them. The idea is to condense all your important strategic information into one high-level document that includes the following:
- Vision statements and strategic objectives of your business,
- Customer segments your business serves,
- Overview of the product or service you provide,
- Sales goals and marketing strategy, and
- High-level business overview of your financial projections.
The success of this exercise begins with accurately identifying the business’s top priorities. The KPIs then become a quick snapshot of the actions you are taking and the results in you are seeing so that they can guide your team’s activities toward the things that create the most impact.
The first step to using KPIs is to identify them. Define your primary goal for the business over a defined period of time, then choose your KPIs. You want your KPIs to be measuring the actions or activities that will lead you to the results you hope to achieve.
Next, set measurement criteria. It might sound obvious, but you’ll only know if you’re reaching your goals if you’re tracking them, right? Viewing all your KPIs and the results regularly will help you understand the health of your business, make critical adjustments to close any gaps and achieve the results you want.
Without measurable KPIs that you review frequently, it’s easy for your business to veer off the rails. If you don’t know how well you’re performing against your targets, by the time you realize it’s necessary to cut your advertising budget, you could be experiencing a financial loss. Remember, what gets measured gets done!
Now it’s time to get employees involved. Just as you can’t operate your business alone, you can’t achieve the desired results without involving your employees. Get their buy-in to your one-page strategic plan by sharing it with them. Identify the KPIs that apply to each staff role and motivate or incentivize the team to work towards achieving the results.
- Explain the logic. Your team needs clear direction and understanding of what they are working towards. Once your team understands its KPIs and why they matter, they can focus on how they can achieve them.
- Provide support. Few things are as demotivating as being given new targets without the tools or support to achieve them. Work with your key staff individually to map out:
- How the company KPIs translate to their roles and responsibilities,
- Three key things they need to do to achieve their personal KPIs, and
- Determine what support they need to perform the expected tasks.
- Break it down. When each staff person understands their primary focus areas, encourage them to identify one daily task for each site that will have the most significant impact on achieving the goal.
Developing a one-page business plan is an essential start to achieving business success. Having a clear, unambiguous program that you regularly monitor enables you to compare your performance at any given time, allows you to change tactics without delay, and stays ahead of the curve. An executive coach can help you develop your KPIs and strategy.
Empowered Leadership helps businesses find freedom through business coaching, executive coaching, assessments, and training. If you are having problems identifying your KPIs I’d love to chat and help guide you, click on the button to contact me.