If you manage a team within your business, there’s a good chance that you’ve heard of key performance indicators (KPIs). It is a commonly used metric to measure the success of meeting the business’s objectives and targets for any given period. It can be used to measure monthly or annually in most cases. Each department will use different KPIs types to measure success based on specific business goals and targets. In its simplest form, a KPI is a type of performance measurement that helps you understand how your organisation or department is performing. A good KPI should act as a compass, helping you and your team understand whether you’re taking the right path toward your strategic goals. According to ClearPoint Strategy, to be effective, a KPI must:
One of the first steps in determining appropriate KPIs for your business, is doing an in depth analysis of your business. What are your goals and overall business objectives? Which tactics will you use to reach these objectives? And by when would you like to reach these objectives? These are all critical questions that need to be asked before determining your business KPIs as well as your own personal KPIs, and of your employees. After answering these questions, and completing your business strategy for the next 90 day period with your business coach, you will have a clear idea of what your goals are for your business and can set up KPIs accordingly. Make sure that you research your industry as well and align it to these KPIs. Although industry standards have significance, companies do not necessarily have to choose KPIs similar to those of their competitors. More important is knowing how relevant the indicators are to your business or the unit or division you’re assessing.
Effective KPIs are important metrics to make sure that you can accomplish any business objective. KPIs are more than numbers you report out weekly – they enable you to understand the performance and health of your business so that you can make critical adjustments in your execution to achieve your strategic goals. This might be a bit overwhelming to the average busy business owner, which is why Archer Inspirations offers Training that will guide you in setting up your company’s strategy, help you determine your objectives and goals as well as assist you in choosing the best KPIs for your business.
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