Key Performance Indicators and Leadership Skills: The Formula to a Thriving Business
Key Performance Indicators tell you how well your business is doing.
Knowing what they are and how to use them will give you a competitive edge.
Running a business has become more competitive than ever before.
Your clients expect high-quality service. Your competitors are eager to step in and shove you aside.
Today competition is fierce and operational expenses are high. Now more than ever, your leadership skills may be the line between failure and success.
For your company to gain the market advantage you desire, employee productivity, and organizational effectiveness are essential.
No matter how well-structured your business is, without productive employees the company will not succeed or attain the level of success it can.
The question now is; how do you actually measure effectiveness and performance? How can you tell if you are spending valuable time and resources on activities that are aligned with your company’s goals? How can you track progress?
If you are not aware there is a measurement called Key Performance Indicators, or KPI.
This is a measurement tool used by businesses to measure and evaluate the success or the success of a specific project or activity.
KPIs are quantifiable metrics that you, your team, and the company can use to measure performance. Setting KPIs will enable the different levels of an organization to be aligned through clearly defined targets, allowing a more cohesive and seamless business operation.
Here are a few more guidelines about Key Performance Indicators
KPIs are a set of values organizations use to measure their productivity. KPIs depend on your business type or function of your team.
A marketing team may have the following KPIs:
- New customers acquired
- Status of existing customers
- Customer attrition
- Turnover
- Demographic analyses
A manufacturing business may have the following KPIs:
- Employee output
- Customer satisfaction
- Stock performance
- Budget performance
- Cycle time
- Rejection rate
Your Key Performance Indicators must be aligned with your business’ goals and objectives.
Your Key Performance Indicators must be easy to understand, simple, and measurable. They should be set within a specific timeframe, i.e. a month, year, or quarterly.
Organizations will develop Key Performance Indicators depending on specific goals of departments and divisions that perform varied functions. The finance department’s KPIs should be different than the sales department.
With your KPIs in place, this will serve to guide everyone in the organization to work toward a united goal. Each department will work under clearly defined objectives and eliminate non-essential activities that drain valuable time and energy.
Take note that creating inefficient Your Key Performance Indicators can drive counter-productivity. Setting targets not related to the department or project’s real work isn’t cost-efficient. It also isn’t motivating to the team, or even you.
Make sure what you are measuring, your KPIs are going to measure something useful.
Developing Key Performance Indicators is often forgotten during the planning process. Yet they are so important for short and long-term success.
Download The Dos and Don’ts of Planning to help you think through what to include in your plan.
About Linda Finkle
Executives in leading companies rely on Executive Coach Linda Finkle to call them on their blind spots, expand their influence and create bigger things for themselves and the companies they lead. She has coached and trained more than 2000 leaders in six countries since 2001.
Linda is described as ‘the best of both worlds in that she understands revenue pipeline management as well as running an organization day-to-day’ and ‘an invaluable resource and advisor’ by others.
Before launching Incedo Group, LLC, Linda built and managed an executive recruiting firm for more than twenty years.
Linda holds the Master Certified Coach (MCC) title from the International Coach Federation. She has been interviewed in Harvard Business Review, Investor’s Business Daily, US News and World Report, Reuters and The Wall Street Journal among numerous other publications.
Her book, Finding the Fork in the Road, hit the bestseller list on Amazon. You can learn more about Linda Finkle at: http://incedogroup.com/blog/
