You Can’t Manage What You Can’t Measure!
by Rudi Scheiber-Kurtz, CEO of Next Stage Solutions, Inc
Keeping a competitive edge in today’s market place requires ongoing investment in the transformation of your business. What kind of information should you be looking for to give you the necessary insights? Are you collecting the right kind of data? Are things on track?
Let’s take a look! A Performance Metric is a measure of an organization’s behavior and performance against a stated target or goal. You can’t manage what you cannot measure. Key Performance Indicators (KPIs) are a group of metrics that allow you to track your progress and promote accountability & transparency throughout an organization. The measurables have to be informative; they must be chosen carefully.
KPIs are a management tool, a set of metrics to assure complete alignment with your corporate strategy. Create a few metrics that provide a holistic overview. The metrics vary from activity to activity and industry to industry. However, they should support the needs of your company as well as your customers, stakeholders and employees. Strong KPIs give us ample time to make necessary changes. Make sure you have some metrics similar to those of your competition so that you can compare.
What is important to your business? If you use metrics, how well do they measure your goals?
Here are our steps to implement effective measures for your organization:
1. Clearly define your Corporate goals
2. Identify short and long term operational goals
3. Develop business plans with goals and objectives that tie to Corporate goals
4. Establish milestones, deliverables, and tasks to support these objectives
5. Develop and implement metrics for all key activities
6. Monitor progress and make corrections/improvements as needed to stay on course
7. Assess the effectiveness of metrics and modify if necessary.
Communicate all the steps with your employees; buy-in is an important piece of the success of your actions. Include them in deciding what metrics are important for their department or division. If an employee is held accountable for certain outcomes, it is best to include him/her in the decision making process. Evoke a sense of ownership and they will have ideas in how to optimize their task or department. Make it a learning environment.
Once your metrics are in place, begin to gather data and trends. Accurate and timely data are vital and automation can facilitate their collection. Remember, as your business changes, so do your KPIs, so monitor them regularly and re-align them with your budget and forecasting process.
Transparency and accountability are a big part of this initiative. All information used to create a KPI must be transparent and data must be accurate. All KPIs must have actionable steps and the behavior-driven steps are backed by incentives to your employees. Talent retention is vital to the middle market success. Disengagements are associated with an employee not knowing the potential contribution he/she could be making. Keeping KPIs simple with clearly defined expectations will improve job satisfaction and will add value to your business.
According to the Aberdeen Group, midmarket enterprises that establish methods for defining key performance indicators, and conduct regular reviews for these performance indicators, tend to perform better in the marketplace.”
Whether you are starting new with performance metrics or you are concerned your current metrics do not give you the desired outcome, start the conversation today in how you can drive results with the right performance metrics. Transparency and accountability will be on your side as you have a way to measure and manage.
Get some additional points from this month’s RudiTuesday short video and call us at 617-449-7728 so we can help you get there faster!