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Key Indicators allow you to track the health, growth and performance of your business. By looking at what values are important, then tracking and measuring them over time, you can determine exactly where you are in your progress towards your business development goals.
Most business owners believe they have a 'good feel' for the way their business is running. This is probably true but it is not really enough for your business to be successful. The Key Indicators in your business need to be developed and scheduled to track and measure your progress over time.
Key Indicators can be used to track both measurable and non measurable areas of your business. They can also be categorized as Performance (Key Performance Indicators) and Strategic (Key Strategic Indicators).
Measurable Key Indicators are values that you can actually measure or calculate by looking at the operations of your Business including the inputs and outputs. Typical examples include: - Net Profit, Growth Rates, Sales Person Calls and Production Rates etc.
Non Measurable Key Indicators are values where you establish the best case and worst case values and then assign a measurement value at a point in time using your best judgement. These values may not be able to be determined by looking at the operational metrics of your business. It may be useful for you to document exactly how to arrive at a value. Typical examples include:- Customer Satisfaction, Market Leadership and Employee Moral etc.
To begin tracking Key Indicators in your business:
1) Quantify your Business Development Goals.
2) Determine the areas that need tracking in order to reach your Business Development Goals.
3) Determine the range of values you will use to measure a Key Indicator, these may change as your Business Develops.
4) Develop a description for the Minimum and Maximum values that you will use to measure the Key Indicator (This will assist you when measuring the values).
5) Measure the current value of the Key Indicator.
6) Schedule a task for the regular measurement and evaluation of your progress with the Key Indicator so you can track where you are over time.
You should share the measurement and evaluation responsibilities of Key Indicators with employees and managers in your business. You will find that once you start using Key Indicators to set the goals and parameters of your business, you and your employees will become aligned and begin working towards achieving your Business Development Goals.
Be bold but realistic in setting your Business Development Goals. By defining and then measuring Key Indicators there is a good chance you will reach and exceed what you have set as the best case scenario.
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