The Importance of Establishing KPI’s

Key performance indicators (KPI’s) are a gauge used by businesses to set and monitor both strategic and operational targets. KPI’s form a vitally important part of business operations as they help to determine and develop a detailed understanding of how a business is performing against its marketing and overall goals. As a result of this information, strategies and areas of attention can be improved to ensure that the business is always headed in the direction of success.

For your business to achieve great success, measuring and understanding the quality of work being carried out is essential, so setting internal KPI’s is a must! You should always start this process by establishing the factors used by your team in managing your business. At this point it’s always a good idea to ensure that your business success can be measured by these same factors used by your team, and if not, it’s time to introduce a new factor for them to measure by. By using KPI’s, your staff will be able to identify and monitor how they are personally playing a part in the success of the business, using factual real time data. In turn, your staff will be a lot more confident in the work they are carrying out and you also remove the potentially uneasy ‘gut feeling’ poor performance measurables that so often get in the way of people’s true abilities by introducing KPI’s.

Great team spirit is a vital cog in your business machine and setting clear KPI’s can boost staff morale. By establishing clear measures of success and (hopefully!) exceeding the expectations which have been set, you’ll find that enthusiasm and belief will be at an all-time high among your team. This breeds confidence, productivity and a ‘can do’ attitude- all of which are great and enviable assets for a successful business to have!

Worth noting at this point, is the fact that KPI’s will achieve the most success when everyone involved in the operation of your business completely understands how they work. Invest time in making sure your team ‘gets it’, allow them to ask questions, have an input on business direction and goals and revisit them regularly to create the perfect ‘one team one dream’ environment.

You may find that your business could also benefit from setting KPI’s externally to each of your clients (if this is applicable to your business model). How much of your staff time is currently spent on customer service and dealing with clients who need clarification and further understanding of the service they are receiving? Potentially awkward situations of you as a business having to justify the delivery of work, or your client questioning what they are getting for their money can be avoided by setting clear KPI’s at the start of the working relationship. This will not only provide clarity and reassurance to your client, but also to your staff as they will have clear, concise deliverables as a basis to work from. Over delivery is never an issue- the real problems occur when the lines of what’s expected become blurred, causing confusion and uncertainty for everyone involved. Setting client KPI’s will also improve the level of professionalism to your service, and as a result, could see an increase in customer retention.

In summary, KPI’s are extremely important when it comes to measuring and reaching business goals. They allow you to understand where your business is, relative to where it has come from and where it is going as well as breaking down your overall business strategy into manageable, operational actions. All while achieving great success with both happy staff and clients. That sounds pretty good to us…!


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