KPIs are a proactive way to manage and measure the progress of your business. If you’re looking to move away from reactively setting priorities and switch to a system that helps your business to achieve genuine growth and success then working with KPIs will be crucial.
What are KPIs?
They are a way of measuring your business’ priorities – effectively the goals that you will use to chart your enterprise’s course to success. KPIs are measurable values but they are not just metrics. They act as a kind of actionable scorecard that you can use to stay on top of business progress, to control and manage certain goals and to keep your business strategy on track. If you’re not using KPIs then you’re missing out on the benefits of bringing essential and actionable insights into your business planning.
Why are KPIs such a good idea?
There are many different ways to monitor and analyse how well your business is doing. However, talk to any expert or experienced business mind and you will most likely find that they bring the conversation back to KPIs when it comes to measuring success with a view to driving your business forward. There are three very good reasons for this.
1. If you’re using KPIs then you’re bringing the entire business with you
So many companies find themselves in a situation where management is entirely on board with strategy and direction but the rest of the business is somewhat left behind. KPIs provide a distinctive and unambiguous set of values and goals that everyone can work towards. Clearly defined KPIs contribute to productivity in a big way and also allow anyone in the organisation to step up and add value. With KPIs in place you will not only have quantifiable measures of progress in place but an infrastructure that ensures the entire business moves and grows cohesively as one.
2. KPIs can force you to really listen to your customers
Customer satisfaction crops up frequently in KPIs, especially when it comes to making first time or one-off customers loyal for life. In the process of exploring this type of KPI you’re going to learn a lot more about your customers, what they really want from your products or services and what makes them tick. Understanding what it is that your customers want from you is the foundation of business success and it’s often only by using KPIs that you can truly tune in to what that is.
3. You’ll end up totally on top of your financials
KPIs always include financial goals, whether that relates to profit margin or the number of purchases made by a single customer. Working with these KPIs will force you to delve deep into your balance sheet, cash flow, product margins and profit and loss. There will be nothing you don’t know about the business numbers and you’ll find that you have to stay on top of this regularly to work with financial KPIs. The end result being that you will see the benefit of your KPIs and also become comprehensively competent at your financials too.
KPIs are essential to business progress and not just for the reasons you might think. Learning how to define and analyse these quantifiable measures could be totally transformative for your business. Get in touch today to find out how to start looking at KPIs today.
