Key performance indicators (KPI) are extremely vital in improving the operations of business because they help us to know if a business is achieving its strategic goals. Some of the operational KPI examples used to measure performance are; income, expenditures, number of customers being served and customer satisfaction. Look at it this way, how would a business establish the business’s income increase or decrease without any parameters to give guidance? Well, this is where the importance of KPIs comes in. Follow the steps below which will enable you to come up with the best performance KPIs for your business.
1.Select KPIs that are in line with your strategic goals
Every business has strategic goals and missions, and the KPIs should always be grounded in line with these goals. It is categorically acute that the KPIs you come up with, measure the operational intelligence that is most significant in attaining your accomplishment.
2. Ensure that they are Attainable
It doesn’t make sense if you come up with key performance indicators, which are unrealistic or which would be so costly for a business to implement, however, when coming up with KPI, you should make sure that the goals are achievable in the specific timelines set depending on the technology and capital you have at your disposal.
3. Have KPIs that are Precise
A KPI that is not precise ends up being interpreted in different ways hence ends up creating ambiguity in the way that it is implemented. Having few KPI also goes a long way in narrowing down the ambiguity of the indicators. Having a precise KPI helps you in coming up with aspects that are truly vital for your business.
4. Ensure that they are Relevant to all the Levels in the Organization
The easiest way to measure performance is by using financial indicators. Unfortunately, some levels in the organization may not be able to relate the financial matrix indicators to their performance. As a result, they tend not to relate to this indicator at all. A good KPI should be relatable in all the aspects of the organization.
5. Make your KPIs Valid
Validating the reproducibility of our measuring systems is fundamental. By so doing, we ensure that the system yields data that is evocative, appropriate and dependable for any sound decision-making process.
6. KPIs should be Controllable
The person who has been put in charge of the KPIs in a business should be able to control them. The individual should be able to make any essential changes that drive the performance. We get what we measure but what we chose to measure must be controllable to make it possible for you to achieve your required strategic objectives.
To conclude more often than not, the management of business will sit down and come up with amazing KPIs to drive the company, and they do not spend time training the staff on the same. Management has to take time to educate employees in order to make the implementation of the KPIs to be successful.