What are the right KPIs for your Business?

Wiki Article

4 Ways to Make the Performance Metrics Work for You

Key Performance Indicators (KPIs) are often thought of as mere metrics that demonstrate an organisational progress towards its goals. When considered strategically, KPIs can become tools of not just performance measurement, but also performance management. The performance indicators can translate into a story about your organization, shedding light on every tangible facet and letting you know the areas of improvement by generating actionable insights. However, as varied as the insights would be for each organization, so should be the KPIs. What might work as a performance measurement metric for one company, might not be the right measure for another organisation. KPIs are unique to every organization and to get the performance metric work for you, you would need to pick the right KPIs.

Before we delve into the ways with which key performance indicators can work for your company in a positive way, let us first understand what would constitute being the right KPI.

What Can be Categorized as the Right KPI?

While the objective of setting and monitoring the KPIs is to ensure a company’s progress by interpreting results and enabling leaders make better decisions, each individual KPI plays a key role at a more granular level. Every employee, team, and department need to have KPIs assigned that are in alignment with their goals, strategy and working models. Let us understand what would make the KPI’s right at both individual and organizational level.

A KPI should focus on solid, measurable goals that are both quantitative and qualitative.
For an individual employee, performance indicators should align with the organic growth path in their job role, with some challenging objectives met for career progression purposes.
Rather than focusing solely on the end-goal, a valuable KPI should consider the segment of the goal. For example, instead on focusing on the low revenue KPI, measurement should be sub-divided, covering the individual reasons for the low revenue such as poor customer experience or obsolete service/ product offering or poor working conditions (leading to demotivated employees). This way, actionable insights can be gleaned for the actual cause and remedial actions can be taken to improve the process.

KPIs should be relevant to the team so that they can gauge their performance to generate further growth options and opportunities. For example, for the marketing department of a company, if the KPI measures the outreach of their content on digital platforms, this would enable them to make their content more engaging and SEO-friendly.
Lastly, the right KPI should always be achievable. Nothing demotivates an employee more than targets which are not realistic. Also, an unachievable KPI would defeat the whole purpose of gauging progress based on the actual performance potential. So how does one make the performance metrics work for their company?

What are the right KPIs for your Business? 2
4 Ways with Which You Can Make the Right KPIs Click for Your Organization
Ensure Intersection of the KPIs with the Company Strategy
An organization’s growth strategy defines its working model, resource management, budget allocations and priorities settings. All these parameters need to be monitored and assessed regularly. A sure way to make KPIs work for you is to align them with the company’s strategy for various larger goals as well as the individual segments of those goals. If performance indicators are mapped according to company strategy, then measuring and managing performance is a parallel activity that guides the organisation in the right direction.

Make Your Key Performance Indicators Visible for the Entire Organization
Make performance measurement a success, you should ensure that they are visible across the organization. Once all the employees as well as leaders are cognizant with the goals of the organization, understanding and working towards those goals becomes easier. While the KPI’s of individual employees, teams and departments would vary, they would still be interlinked and always related to the common organizational goals. Visible KPI’s also ensure accountability in the company.

Never Forget the Basics- Make Your KPIs Measurable and Actionable
Yes, we know that this may seem obvious, but many organizations fall short of selecting the KPIs that are Specific, Measurable, Achievable, Relevant and Time-bound (SMART). Similarly, the insights generated from any KPI should end in an action item that can be worked upon for improvement. A non-tangible measure could only end up creating space for discrepancies in understanding and multiple interpretations. Also, accurate measurement of such a KPI is often not possible. For example, instead of the KPI being “Enhanced brand visibility,” a more focused and measurable metric like, “20-25% increase in the click rates on the company’s digital pages” would provide better insight into actual progress made for the metric. This is the difference between an objective and a subjective metric. Similarly, instead of the insight generated from the KPI results such as, “Improve employee involvement,” it could be a more actionable insight such as, “ensure fortnightly employee engagement sessions.” "

Using the Right Tool for Your KPIs
The role of Power BI in creating easy-to-interpret and insightful KPI dashboards is undeniable. With the help of the right BI tool, you could get KPI dashboards that can be accessed by your employees as well as leaders for better performance management. The right tool could make your KPIs work better for your organizational goals. Leveraging technology to generate reports and dashboards is the concrete way towards ensuring that your KPIs are being assessed and worked upon regularly.
Here
Unfortunately, however, Power BI and other similar tools will only allow you to create powerful dashboards and presentation of data in a visually pleasing manner. They do not however guide you through the process of selecting the most appropriate KPIs for your service area/business which will create an effective and fit-for-purpose scorecard. Despite the technology-rich world in which we live, most organisations still measure score their KPIs through an Excel-based approach. This is surprising as the value of effective performance measurement and management as a guiding process is significant within any department or organization.

During the pandemic, where it became very difficult for many organisations to measure performance, Evbex developed a state-of-the-art KPI platform, https://thekpiportal.com which enables every type of organisation and service to prepare professional scorecards and to measure service quality and performance through an intuitive cloud-based solution.

What are the right KPIs for your Business? 3
Choosing the right performance metrics (KPIs) for your organization is the first and most important steps towards ensuring that you are collectively working towards your goals. These should be SMART and Objective wherever possible. They should also be based on the organisations Critical Success Factors (CSFs) so that for everything that is important to the organisation it will be measured and reported on accordingly.

There is of course so much more to establishing the right metrics for use in performance measurement via a set of KPIs but getting the initial basics right will set you up on the correct path and in time to move from performance measurement to reaching your organizational and resource-based goals through effective performance management.

Learn more about performance measurement and performance management through KPI scorecards, visit https://thekpiportal.com/. Here, you can set-up your own professional metrics guiding you towards compliance and set you on your journey towards business excellence. This platform is unique and has been developed by industry experts so you can be assured of getting the best when it comes to measurement and management of your company’s performance and creating a roadmap towards meeting organisational objectives.