Urgent: Do you have KPI?
No, I’m not spreading the word on a new epidemic, social networking site, or video game system (Christmas is only 7 months away, after all!). Rather, I am talking about Key Performance Indicators, or KPI. Key Performance Indicators are quantifiable measurements that allow one to check the health of an organization based on their progress or completion of these measurements. F. John Reh, About.com’s Management Guide, goes into more detail here.
Some KPIs are easy to identify and are publicly available. Baseball players, for example, have hundreds of thousands of fantasy sports fanatics checking their KPIs every day. Batting average, home runs, and runs batted in are a simple KPI that we may see every day but not realize what it is exactly we are looking at. Large firms will announce their quarterly goals for earnings per share on their publicly traded stocks and an easy way to assess success or failure of that firm is whether or not they met, exceeded, or fell below their announced goals.
KPIs can be on as large of a scale as a nation’s GDP or on as small of a scale as customer response cards received at your local bookstore. The important thing to remember is that whatever aspect of your business you are measuring, you have to pre-determine your parameters and goals within those parameters; you should not create a KPI to make your existing data look good!
So what are your KPIs? What are you measuring that allows you to gauge your business’ performance? Have you had this discussion with your team? If not, try an impromptu meeting and ask what your team feels their department’s KPIs are. You may find that you have important KPIs that you’re not measuring that you should be. And as we all know, if you can’t measure it, you can’t manage it!
