To transform your business, you first need to establish clear goals that are completely understood by management and employees. When these goals are achieved, you’ll be one step closer to finding measurable success. Transforming your business begins with visualizing where you want to end up and determining how to get there.
From there, you need to establish key performance indicators (KPIs) to measure your performance — and success.
Entrepreneur and business expert define KPIs as, “A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their strategic and operational goals.” Your business will increase its chances of success if your KPIs are clearly and consistently quantified.
Why You Should Measure the Transformation with KPIs
You could be missing out on invaluable data analytics if you are not using KPIs to measure your company’s progress. These key performance indicators could be the missing ingredient that you need to take your company to the next level of success. Consider the following five ways in which KPIs can help transform your business.
1. Quantifies Objectives
It is important to understand the difference between KPIs and business objectives. They are related, but are not the same thing. Objectives define where you need to go and how to get there. KPIs quantify how well organization goals and objectives are met. When you have actual data that defines the level of goal completion, that can help management decide on future action plans. For example, if monthly sales goals were not met, steps can be taken to evaluate why and then implement actions to ensure that the sales team increases sales to meet and exceed all goals.
2. Opens the Conversation
KPIs are an excellent way to open the conversation among management and team members regarding productivity levels and how to increase efficiency to further transform the business. Completing comprehensive data analytics (DA) on accrued data regarding achieved markers through KPI evaluation will give management concrete information to bring before their teams. Employees can then see areas where they need to improve individually and as team members.
3. Inspires Personal Responsibility
The proof is in the pudding! If the data shows it, how can an employee argue? During the data analysis and review stage of the KPI process, your business can be transformed one employee at a time. This data can be used by managers during employee performance evaluations. With this data in hand, the manager can use the “sandwich technique” to start with a compliment, deliver the constructive criticism, and end on a high note. The KPIs can cultivate a company culture where employees are inspired to develop personal responsibility. They can then excel at their jobs and help the company achieve success.
4. Enhances Team Spirit
Team work can make the dream work — if it stands on a foundation based upon concrete data and data-driven decisions. Managers can become motivators to their team members. Results-driven employees are an important factor in maintaining success in your business. When employees are shown facts regarding the company’s business viability level, they can be coached into working better as a team to achieve greater success.
5. Transcends the Competition
Using key performance indicators to evaluate how well your business is doing will help your company transcend the competition. The amalgamated data is a vital factor in understanding business analytics (BA) — which can then enable management to employ data-driven decision-making. With data-driven decision making based on KPIs you’ll understand your company’s strengths, weaknesses, and be positioned to take action to beat the competition.
Take steps to transform your business today by creating strategic business objectives, fused with KPIs. Use that information to build an action plan, and you’ll be on your way to creating a more successful company.
