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For effective KPI's you need this...

Updated: Mar 3


Creating KPI's

As far as Key Performance indicators (KPI's) go, this is exactly what they should be. Data measures of key area's in your business that are aligned with the vision of what you deliver and how you plan to grow your business. Whether that is Customer satisfaction, Sales, On Time Delivery, Quality, Lead-time, Cycle time, Safety and many others, if you aren't measuring it you don't know if you are doing any good, or not as the case may be.

Measure The Right Things.

Measuring the right things is important to understand whats really helping you grasp the performance of your business. Listen to your customers and gain insights from your employees, these are the true signs of whether things are performing well or on a frustrating downward slide. You need to be involved in how the business is doing business on a day to day. Map what this looks like and where its critical points are. Start measuring the outputs and ensure there is a review regularly but do not jump to conclusions as soon as you get a few readings! You don't know how bad its been before or how good it could have been, and how these measures are effected by diverse product or scenarios hence you wait.... and check the data. Once you have some meaningful comparative data that gives a fair breadth of your business then Statistical Process Control can be applied to establish what is a poor performance requiring action and where you may have bottle necks, quality issues or inefficiencies compared to expectation. Only then should you start to problem solve and improve.

Avoid conflicting measures

Avoid implementing conflicting measures, particularly in different departments who are each others internal suppliers and/or customers. This does not help with creating synergy across the business, one perfect example of this is setting an on time delivery target on one team and a sales delivery target on another yet not setting a conforming target for load levelling on the sales team to help manage this. The result of this is inevitable arguments, conflicting interests and broken relationships. Creating more work for you to decipher what is war torn opinions or reality and managing a reset of the situation rather than reaping the rewards of a connected system.

Create Ownership

Create ownership not just of measures within a team or department but for each member of those teams to have a measure that they maintain and report. This way each employee has an invested interest in achieving the whole and delivering an achievement for their bit of the business. This is not a easy construction to do of such a network, as it needs understanding of the business, its interactions and how the business vision filters to all levels to be relevant. Once set this is where real growth potential and benefit can be realised.

Communicate

Once You have decided on your measures and owners, make it all central to the day job and visual across the business. Create simple visual boards and methods to communicate these performances and capabilities and make it a team support function to understand what is happening and how can the situation be improved or raised. Automate the data collection and reporting where possible, this makes it easier to ensure the KPI's are produced but also reduce the likelihood of data tampering or error. Now you can scope areas to improve, save and grow!


If this is a desire for you but is tough to find the resource to break through the main kick off stage or you need a fresh experienced pair of eyes to help guide you through to implementation, then click our logo above to contact us for more information and to talk about how we can help you achieve more.

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