Businesses In The GTA Need KPIs
There’s a familiar saying that states, “What gets measured, gets done.” In essence, this statement means that regular measurement and reporting helps to keep you focused on achieving your goals. When it comes to your organization’s performance, critical measurements give you the information you need to make well-informed, quality decisions.
What Are Key Performance Indicators?
Key Performance Indicators (KPIs) are a set of agreed-upon critical measurements that provide a numerical snapshot of your organization’s progress towards meeting goals and objectives. Your business likely has dozens of metrics that let you know things are running smoothly on a day-to-day basis. KPIs are a set of measurable, objective, and actionable metrics that are strategic touchstones for your organization. They create an analytical basis for decision-making and provide a focus for strategic and operational improvement.
Why Are Key Performance Indicators Important?
Measuring the correct KPIs is critical to the continued success of your business. The right KPIs are essential metrics that enable you to understand the performance and health of your business and track progress to ensure that you can accomplish your business objectives. There are several reasons that a company should use KPI scorecards.
Monitor company health
One of the primary reasons organizations use KPIs is because they offer an ongoing way of tracking the aspects of your business that are most critical to your success. In essence, KPIs enable you to keep your finger on the pulse of your organization and quickly make critical adjustments in your execution to achieve your strategic goals.
A company can have dozens of metrics that indicate whether the business is performing well or not. Often, the amount of data available can be overwhelming and distract you from the most vital issues. But you only need a handful of KPIs to monitor your organization’s health.
KPIs are specific and measurable metrics that have a proven impact on your business or one department in your organization. Rather than trying to monitor 40 or more metrics, KPIs enable you to measure what’s important so that you can put your energy and efforts into the areas where you want to effect change. Aligning these KPIs into one dashboard with 6-10 indicators enables leaders to focus on what matters most. In addition, if a KPI begins to fail, it’s easier to react and make adjustments accordingly.
Measure progress over time
Making sound business decisions requires information. Without precise, accurate, current data, making a quality decision of any size is challenging. Additionally, without clear data, how do you know if an attempted change in process or procedure leads to improved efficiency or produces the desired results?
For any organization, regardless of size or industry, the use of KPIs can answer all of these questions. Every department should have those four or five KPIs that they track, monitor, and put forth plans to improve. Additionally, those individual department numbers should support an additional three or four numbers the company is working towards achieving as a whole. In this way, can you ensure each department is working towards the company initiatives and transparent communication and direction are being given across the employee base in order to build a culture of progress and improvement.
Defining and implementing KPIs is an ongoing and evolving process. Selecting the correct KPIs helps you measure progress towards your long-term goals and business strategy and ensures that the numbers are easy to gather and visible in a dashboard format for everyone to see and access.
Gaining the support of everyone and giving them ownership of their departments can lead to significant leaps in success. With your entire team on board, you can review efforts to see where additional improvements are possible and build improvement objectives and priorities based on the numbers. The more you and your team know about your progress, the better informed you will be, enabling you to make better decisions.
KPI scorecards are one of the most efficient ways to manage a business. Implementing KPI scorecards makes it easy to measure certain things in the organization when someone wants to focus on them. For example, KPIs can measure the efficiency of a team by tracking response times and the number of people required to perform a specific task.
KPIs allow you to measure the progress of your initiatives and enable your team members to track and see in real-time how they are performing. When one or more KPIs start to slip, that is an indicator of a potential issue that requires immediate attention. Conversely, KPIs are also an indicator that things are progressing smoothly.
Analyze patterns over time
The main reason to use KPIs is to ensure your business is paying attention to metrics it wants to change or ensure that required behavior occurs. By consistently measuring the same KPIs, you can detect patterns in your numbers to help you in your business. For example, KPIs may enable you to predict when a slow period will be and allow you to use that time to improve your organization, such as with a training initiative or a system update.
Over time, KPIs can provide valuable data concerning, among other things, sales forecasts and individual performance accuracy. For example, KPIs may show that sales forecasts are consistently over or under actual sales for the period and can also show where employees are falling short or excelling. This data can be used to explore consequences related to poor performance and learn ways to implement the techniques used by employees that are achieving results.
Why Businesses in the Greater Toronto Area Need Key Performance Indicators
Managing your business through KPIs enables you to establish targets and goals and track your progress towards reaching them. Using KPIs as a tool to help run your business makes it possible to determine the effectiveness of your initiatives and can help you make sound decisions. KPIs help you focus your resources and efforts on the things that are most vital to the success and health of your company. Contact us today to learn more about why your business in the GTA needs Key Performance Indicators.