For who, how many, how often, what areas? These phrases represent questions that we must be asking ourselves in business. These phrases represent certain addressed areas of what we call Key Performance Indicators or KPI’s. What is a KPI? It’s essentially a measurement of performance and accountability.
How many dials must be made to contact one quality prospect? How many appointments must be booked in a given week or month? How many sales must be made to reach the desired goal? How many times should our business phone ring before it is answered? How long should it take for a proposal to be written?
How many proposals will be written and sent in a day? How effective is our marketing campaign in generating increased revenues? These are all examples of KPI’s that can be implemented in an organization.
Key Performance Indicators are the measurable values that demonstrates how effectively a company is achieving their key business objectives and goals. Organizations use KPIs at multiple levels to evaluate their success at reaching targets. High-level KPIs may focus on the overall performance of the organization, while low-level KPIs may focus on processes such as sales, marketing or a call center.
Understand that a company cannot manage what it is not properly measured. What is also important to remember is in what you test & measure you usually increase.
A Key Performance Indicator is only as valuable as the action it inspires. A KPI must always affect a positive change. Understand that when team members have something positive to strive for it adds an element of competition into their daily routines.
When they aim for and achieve their own personal goals, this will not only have a positive effect on them personally, it will also have a positive effect on the team as well as the running of the business and the bottom-line profits.
Think of KPI’s as the oil to your engine, the fuel to your organization, the key components that move the speedometer forward in your sales and revenues?
In terms of developing a strategy for formulating KPIs, your team should start with the basic understanding of what your organizational objectives are, how you plan on achieving them, and who can act on this information. This should be an iterative process that involves consistent feedback.
Once you establish your KPI’s, position them by communicating them well and enrolling your team in the process and outcome. Understand that the truth is that KPIs are only as valuable as you make them. KPIs require time, effort and employee buy-in to live up to their high expectations. However, their true potential value remains in the hands of those that use them and use them well.
Key Performance Indicators can also be a great measuring tool when linked to considering promotions, bonuses, salary and wage increases.
Key Performance Indicators should also be SMART. Specific, Measurable, Attainable, Relevant, Time-Bound. Ask yourself these questions below when putting together your companies KPI’s.
- Is your objective Specific?
- Can you Measure progress towards that goal?
- Is the goal realistically Attainable?
- How Relevant is the goal to your organization?
- What is the Time-frame for achieving this goal?
Once you have your SMART Key Performance Indicators in place, they then should be consistently evaluated and reevaluated based on the progress of the organization.
The implementation of Key Performance Indicators in your business is the final and sixth step in Building your Synergistic Dream Team Organization.