Determining what success looks like for your business and how well your business has performed is measured through key performance indicators or KPIs. Factoring these into the overall strategy will allow you to evaluate progress in real-time, identify areas for improvement and set new goals so that your business is constantly evolving. One of the most effective tools for performance measurement, a KPI can help you understand whether your business has reached specific targets or fallen short which, over time, will give you a baseline to compare against.
Want to know whether your company is growing and how to measure your performance against a specific set of goals and objectives? Here are some tips on how to identify the right KPIs for your business.
Align Your KPIs With Your Vision
There are endless KPIs to choose from but decide on the metrics that matter the most for your business otherwise you will begin to lose focus on what you should be doing to accomplish the wider vision. There are no rules for pinpointing the proper KPIs but take into consideration what will align with the broader business goals. If your vision is to be the region’s top-performing recruitment agency, and a goal is to increase your client base by 20%, key metrics to measure are client retention or share of voice for instance. Having KPIs means narrowing your focus on a few vital metrics that will influence your business the most.
Consider The Stage Of Your Business
How you measure your business have to be in line with your size so that the data and reports are informative and relevant. Know what stage you are at and assess where you currently are in your journey. Are you a startup new to the industry or are you an experienced and flourishing enterprise? Depending on the stage of your company, this will dictate what metrics you should be focusing on. If you are in the early stages choose KPIs related to business validation while those more established should hone in on metrics like customer lifetime value and innovation spending.
Focus On Development
Before deciding on your KPIs assess what areas of your business require development. KPIs are great for helping you determine what may have happened within a certain period to cause a change in performance. If something is lacking or underperforming and you have no indication as to why, measure it and get clear-cut answers. There are no rules to how many you should have but try to limit yourself to a few key metrics, rather than a multitude or you may lose track, have no priority and become overwhelmed. KPIs can be categorised into areas such as financial, customer-focused, processes and people management, so if you are trying to improve onboarding in your business for instance, turn your attention to the latter.
Be Specific with your KPIs
As all businesses and their specific goals differ, so will your KPIs. Pinpointing the right KPIs for your business will be determined by your businesses goals, so be clear about what each KPI will measure, and why. Just because you like the sound of a KPI or are intrigued as to what the data will entail does not mean that it is relevant or informative to you. They should be actionable, highlighting what areas you need to develop and how. KPIs should be quantifiable, well-defined and easy to interpret. They apply to what is happening in your business at present because outdated data will only be useful to compare against and see if and how you have improved. They are impactful and contribute towards the wider business goals.
Monitor And Re-evaluate
Regularly monitor and review your KPIs so that you are continually finding tangible ways to measure progress. Look to change them on a monthly, quarterly or pre-determined reporting timescale. If you are exceeding expectations, your goals will change and it will be necessary to update the KPI alongside this. Don’t rush this process, the last thing you will need is a report filled with data that is useless and gives you no indication of whether you have underperformed or overperformed in that specific time. Finally, keep the entire team informed and updated on what is being measured and by who because many measures and goals will be interconnected.