60 performance indicators you should follow

It often happens that people don’t know where to start when the decision was made to track business performance. Or it is paralysis: nothing moves as no one knows what to do first. Or it is the opposite: people measure everything in the organization, and this is quickly a real nightmare.

Here are 60 performance indicators (they’ll become “key” performance indicators if you decide so) to improve performances within your organization.

Strategy

1. Sales from new: clients, suppliers, channels, technology, partners, etc.
2. Project Health Index
3. Abandoned Project Opportunity Cost
4. HR Cost for Support Services (HR, Finances, other “Corporate” positions)
5. Marketing Expenses by Euro in Sales
6. R&D Cost by Euro in Sales
7. HR Cost by Euro in Sales
8. KPS: Key Project Status
9. Actual Achievement compared to business plan commitments

Marketing

1. Key Products Market Shares
2. Return on Investment for each customer segment
3. Return on Investment for each distribution channel
4. Key Customer Satisfaction Index
5. Customer Churn Rate
6. Competitors’ Marketing Expenditures
7. Moving Away Customer Alert
8. Bad Press Index
9. Number of Sales Staff vs. Total Staff
10. Sales People Availability by Customer Segment
11. Product Pricing Positioning on Key Products vs. Competitors
12. Leads Pipeline
13. Clients’ Dispersion in Age (the variable depends on your business)
14. Time-to-market new ideas

Sales

1. Sales from Key Products vs. Competitor’s Products
2. Cost of Good Sold by Distribution Channel and by Product (Service)
3. Time to Sell by Distribution Channel and by Product (Service)
4. Forecast Accuracy by Salesperson
5. The volume of sent deals by essential products (or services)
6. Conversion Rate by Product Category
7. Sales Pipeline Value
8. Time Facing Customer

Production

1. Capacity by Resource (minimum, maximum, optimum)
2. Occupation Rate by Resource
3. Availability Rate by Resource
4. Rework Percentage
5. Waste Rate
6. First-Time-Through Rate
7. All your inventories in days
8. Maintenance Cost
9. Raw Materials Utilization Rate
10. Recycling Rate
11. Required Time To Produce One Unit
12. Productivity by Product Line (or Service)

Human Resources

1. Vacancy Rate
2. Internal Promotion Rate
3. Number of regrettable losses of employees
4. Supervisory cost of teams per unit produced
5. Employee Satisfaction Index
6. Resources Flexibility Compared To Market Fluctuations
7. Average Time To FulFill A Vacant Position
8. HR Recruiter Performance By Sourcing Channel (or by HR people)
9. Employee Turnover Rate for Key Positions
10. Less Than 3 Days Absenteeism
11. Absenteeism Rate vs. Turnover Rate

IT

1. IT Cost by Headcount
2. Key Software Availability Rate

FINANCES

1. Return on Critical Resouces (RCR)
2. Free Cash Flow Generated by Regular Activities
3. Distribution Channel Profitability
4. Cost of Breaking (Employees’) Contracts

Now you have to answer the following questions:

• Why do managers have to measure them?
• To improve what kind of decision?
• What are the limits?
• Their disadvantages or their undesirable effects?
• Which are the metrics that create a chain of causes-and-consequences between the resources and corporate profit?

According to Professor P.M. Georges, in the session he lectures in his MBA at INSEAD.