KPI - Your associate in business improvement
Research has shown that over 90% of the most successful companies in the world have some form of KPI application.
KPIs or Key Performance Indicators are measurable values that show how effectively a company achieves critical business goals. Simply put, they are a precise measure of the success or failure of the company.
The use of KPI provides insight into business plans, tactics, and their functioning to improve and upgrade specific ideas constantly. Because what we don’t measure, we can’t improve.
Organizations use multi-level KPIs to assess their success in achieving goals over time, as follows:
- at the job level
- at the level of smaller organizational units
- at the level of the sector, the directorate and the entire organization
As a rule, KPI is related to the company’s strategic goals, which are the market, finances, processes, and people.
One way to assess the relevance of performance indicators is to use the SMART criterion, which has been used in various forms for decades. The name itself is not coincidental. It is derived from the following words:
In particular, the application of the SMART criteria is based on asking the right questions:
- Is there a specific goal for the company?
- Can progress be measured in approaching that goal?
- Is the goal realistically achievable?
- How relevant is the goal of the organization?
- What time frame is adequate to achieve the set goal?
Of course, it is possible, even recommended, to expand the SMART criteria, which, logically, makes them SMARTER. 🙂
It happens by inserting two additional steps, which are assessment and review.
If you have exceeded the target income for the current year, it is necessary to determine what led to it, whether it is because the goal is set too low or the reason is some other factor.
One of the most critical but often overlooked aspects of KPIs is that they represent a form of communication.
Establishing a KPI often helps to start a discussion of a strategy. Involving employees provides them with the knowledge of the KPI and provides insight into how much everything is related to the organization’s ultimate goals. Besides, employees’ direct engagement is very important here, since people love when they are heard, which can further result in good ideas for achieving the given goals. The employees themselves can be additionally motivated for work and even better engagement.
Since the Organination, among other things, deals with performance improvement, and as we have already said, you cannot improve what you do not measure, we desire to help you to align your strategy with effective performance indicators. We will save you time by analyzing the establishment of a system that will provide you with a continuous return on investment.
Because, of course, you want to know where you have been, where you are at the moment, and in which direction you are moving. Effective performance review in one place (Performance Dashboard) with a clear definition of performance (KPIs) will give you the visibility of the most crucial performance indicators while saving you time and energy to deal with other things.
We are here to be a part of your growth and development!
If you are interested in anything related to the training module that includes key performance indicators, or you need additional information related to today’s topic, feel free to schedule a free consultation at firstname.lastname@example.org.
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