This week we continue to delve into the details of systematizing a business. Step #7 of the nine steps: Key Performance Indicators.
Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization. They will differ depending on the organization.
- A business may have as one of its Key Performance Indicators the percentage of its income that comes from return customers.
- A school may focus its Key Performance Indicators on graduation rates of its students.
- A Customer Service Department may have as one of its Key Performance Indicators, in line with overall company KPIs, percentage of customer calls answered in the first minute.
- A Key Performance Indicator for a social service organization might be number of clients assisted during the year.
Whatever Key Performance Indicators are selected, they must reflect the organization's goals, they must be key to its success,and they must be quantifiable (measurable). Key Performance Indicators usually are long-term considerations. The definition of what they are and how they are measured do not change often. The goals for a particular Key Performance Indicator may change as the organization's goals change, or as it gets closer to achieving a goal.
Click here to learn more about defining and implementing KPI's.
In the next Business Minute we will be covering the Operations Manual.
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The three great essentials to achieve anything worth while are, first, hard work; second, stick-to-itiveness; third, common sense. ~Thomas Edison
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Business Minute 13