It is essential to have measures or key performance indicators (KPIs) in place on the key parts of your business. Having actual data enables you to make better decisions based on fact rather than decisions based on anecdotal comments or perception. These measures are often known as key performance indicators (KPIs) and ideally include finance, customers, operations and learning & development. This approach is referred to as the balanced scorecard.
- Replaces subjective assumptions and guesswork with actual data.
- Allows decisions to be based on facts.
- Breaks down a business into its component parts (See Processes).
- Provides senior managers with an overview of their business.
I have been exposed to KPIs all my working life, BT being a very large company had a lot of KPIs which cascaded down though the levels of management.
Business Network International being a global franchised operation used KPIs very effectively to monitor the performance of franchises and countries. As a franchise owner I used KPIs to monitor the performance of my region and my member groups or chapters as they were called, used KPIs to monitor their own performance.
For example attendance at meetings could be viewed by individual member, on a chapter level, by franchise, country and global level. This is a great example of how KPIs can be used top down through a business.
Recently I was working for a small business which operated very well but had no KPIs. Performance was based on subjective assessment, memory and perception. I recommended improvement driven by a clause in the quality management system (QMS) ISO 9001 which asks how do you know if your quality policy and objectives are being met, resulting in the introduction of a set of KPIs covering financials, sales, operations and customers. During subsequent external audits we were commended on our set of measures.
How can I help you?
If you need help putting in place a set of measures for your business then get in touch.