We so often hear this saying. And it’s true!
However, what happens is that we often identify too many measures to keep track of and then become overwhelmed by what to look at. Research shows that we can only remember 3-5 things. This is the magic number for values, for words in a vision, and also for your Key Performance Indicators. Yes, you will have other things that need to be measured, however, there should only be 3-5 that you consistently focus on.
The other thing that we don’t do well is actually have KPIs that we can measure and ensuring that the ones that we measure actually measure business performance, without undue interference from other factors. Too often we have fluffy motherhood statements, but they aren’t tangible goals and therefore people in the organisation are not clear what they are working towards.
Here are some examples of strategic KPIs:
- Strategic goal – move into a new market and have $5m of turnover in this market by 30 September 2019.
- Financial goal – 20% EBIT for the 2019/20 financial year.
- Systems / Process goal – all staff use the CRM for the end to end manufacturing process by 31 December 2019.
- People / Culture goal – achieve a Staff Satisfaction Survey rating of 75% by 31 March 2020.
- Quality goal – 99.9% of customer orders delivered in full, on time and to specification.
- Corporate Social Responsibility goal – donate 1% of turnover to Guide Dogs Australia during the 2019/20 financial year.
Divisions within an organisation may have additional goals. For example, the marketing division may have 4 KPIs that they monitor, which contribute to the overall goal of moving into a new market and gaining $5m in turnover in that new market, however these are operational goals within the marketing division and the goal that the organisation is seeking to achieve is still the overall goal. The Board and leadership team need to remain focussed on the organisations overall goals without getting distracted by each division’s internal operational KPIs.
To talk further about your KPIs, please contact one of the team from Tweak HR via Corinne Butler at corinne@tweakhr.com.au.
As the Director of Tweak HR, Corinne brings a wide range of HR expertise to add value to your business. Corinne has worked in management and consultancy roles across a range of industries including – health, transport, building, civil engineering, agricultural and construction. As a small business owner herself, Corinne understand the challenges (and opportunities!) of local businesses.
