Key Performance Indicators (KPIs) are useful tools to keep your business moving and growing within a strict timeframe. Setting decent goals is crucial to success. However, these numerical or qualitative goals should be scaled appropriately to the size of your business. It's no good setting an enormous percentage turnover target if you're a one-person trader. Likewise, large businesses should avoid setting their sights too low by underestimating what they could attain. Here are the main differences between large and small-scale KPIs.
Scaling your priorities down
What stage of growth your business is currently at will determine which KPIs suit it best. If you're starting out, your KPIs should resemble a checklist of vital tasks to be completed before your business is open and operational. Concentrate on setting KPIs that emphasise meeting deadlines for installation, establishing an estimated number of customers, and breaking even by a set date. Very simple, qualitative objectives are fine. You may want to set up several KPIs at once - new businesses require a lot of criteria to be met to get off of the launch pad.
During the planning stages, KPIs can be mapped by dedicated software onto a flowchart or timeline. This combined view forms an initial blueprint for how your business should run. Combining metrics and set-stage planning is a good business habit to get into. Using suitable KPIs in conjunction with overview planning that incorporates your grander objectives is vital to keeping your measured metrics coherent, relevant, and focused on enhancing the right areas of productivity.
Advanced, small-scale businesses that have established a decent market should focus more on improving employee performance and enhancing profit margins. Improving cash flow, productivity, and growth is vital at this stage. KPIs should help you maintain your momentum towards greater things.
Employee micromanagement is also key. Set your employees’ personalised goals for productivity based on how your organisational KPIs relate to their individual roles. You should also start considering global KPIs for factors such as growth per quarter, new channels to be opened up by a certain date, and average customer satisfaction.
All new projects should have set, timed goals to monitor their construction, completion, and implementation. Consider carefully what you want to gain from each new major investment, then create a KPI to match.
Large business KPIs
If you're running a large business, you don't want to worry about the small details. You've got middle managers and HR under your command, who will set their own targets for the employees under their supervision. Unless the employee is absolutely vital or exceptionally problematic, top-down micromanagement KPIs are an expensive waste of time.
Nevertheless, make sure that your organisation has a policy for monitoring employee attainment through a Personal Performance Indicator strategy (PPI). A tiered system of PPIs tracking individual performance can be processed into a metadata overview, which will give you a better picture of employee morale and performance than sifting through hundreds of individual reports. Excessive staff turnover can often be picked up through PPI monitoring, a critical sign that something is deeply wrong with your business.
The big picture
Whatever stage your business is at, your organisational KPIs should reflect the fact that you're pursuing a greater vision. What you should ideally be focused on is where you see the business in one, five, ten, or even fifty years. Big picture KPIs should set targets for sales, departmental performance, turnover, loss mitigation, brand perception, and market navigation.
Monitoring these grand factors is critical to determining whether your business is still on the right course year-by-year. Keeping track of whether your KPIs are met will allow you to adjust your plan to compensate for weakness and build on what's working. New project goals should be handled in much the same way as your top-level KPIs.
Day-to-day performance is still important for any business. If you've got the resources to do it, real-time monitoring of retail spaces, offices, and factory floors can help you assess whether KPI targets are being met on a day-to-day basis.
A final note
There's one piece of advice you should keep in mind, regardless of the size of your business: avoid setting yourself too many KPIs at once. As well as taking up precious time and resources to monitor and log, a glut of information can confuse matters and hide more important issues.
To find out more about our Clearview Performance Management Suite and how it can help streamline and monitor your KPIs and associated business goals, please get in touch today for a free demonstration.
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