Every company needs to constantly improve or grow. If they don’t have the right tools and information, however, this is impossible. Soon, they will fall behind as they watch their competitors grow faster than ever before. That’s why you need KPI’s. Here’s what they can bring to your company and why they’re crucial for your growth:
Lessons from the Past
You don’t want to dwell on the past, however it does provide excellent lessons if you peek back. With KPI’s you know exactly what your metrics are. If a project is successful, it will be proven so based on its metrics, not random conjecture. This gives you the power to reward certain programs with renewed funding or to cut the ones that aren’t performing. Your spending will be more lean while your returns will grow. The end result is a better bottom line without extra effort (other than reviewing your KPI’s).
To know where you are going, you have to know the resources and realities of your business that you are dealing with right now. KPI’s are one way to give you an unbiased picture of what state your company is in. Without this data, you could have a singular, limited perspective that could lead you into the wrong direction. KPI’s let you take stock of what fuel you have and determine what you need to get where you’re going. Speaking of going forward:
If you don’t know which way you want to go, then it doesn’t matter which direction you’re headed. But when you know your KPI’s you are free to dream big. You can attach visions and outcomes to you daily actions. And to add to your productivity you will know exactly how to measure your outcomes. You’ll know when you have arrived because you defined so specifically earlier on.
Measuring and Updates
What gets measured gets managed. If you don’t know what the KPIs are you can’t possibly know how well you’re doing. You could feel like you’re winning but in reality your expenses are outweighing your profits on a new project. That’s where accurate reporting and measuring is so crucial. There are many softwares available to make this process easier. Try a software with BI reporting tools to consolidate all of your data and create visuals interpreting the data. Having a way to look at your data helps you easily create goals, measure progress in a way that is more effective than just looking at plain numbers.
With KPIs, you have something to compare multiple initiatives to as well. For instance, say that you split your company’s sale division into two teams. Each team is given a different script, but everything else stays the same. Perhaps the metric you are measuring is the amount of time it takes for the average sale to be closed. With this KPI in mind, you now can tell which script is better after several months. If you purely relied on feedback from the sales team as far as how they felt about the script, you would have gotten biased feedback.
KPI’s give you a framework to work with. Within this boundary, your creative imagination is free to come up with new ideas. You might not have a major breakthrough every time you review your KPI’s but with time you’ll get more than you had before.
Speed of Opportunity Assessment
You likely have more opportunities coming at you on a daily basis than you can handle. So how do you decide which ones are worth pursuing? You have to have the discipline to use your KPIs as a guide. They will determine what path will actually get you your outcomes in your business based on the cold, hard, facts instead of opinions and subjectivity.
In today’s world, you can’t afford to be lazy with your business. You need to have specific targets and KPI’s that you’re working towards. The good news is that by setting that up in advance, you gain the benefit of going farther and faster than the competition. This frees you up to increase profits without increasing man hours, making your company a lean, mean machine.
by: Dennis Hung