Identifying and establishing relevant KPIs is not as simple as it seems; it needs continuous KPI company research.
It is very hard for companies to determine whether or not they are doing well without having identified and established beforehand what KPIs to use in measuring accomplishments. This means, of course, that goals and objectives must be detailed and specific enough for them to be broken down into doable plans with measurable outputs. For managers, the key to integrating into management the structures and mechanisms that will ensure that paths taken are always aligned with goals is having effective key performance indicators. For this, KPI company research is required, as identifying what the company must focus on is not always as easy as it seem.
Management teams of companies in similar businesses would inevitably see markets or opportunities differently. This is because of their differences in terms of resources. Thus, you cannot expect them to employ exactly the same key performance indicators. A start-up would probably focus more on market development via strategies that are very different from what an established player would employ; although, both will have market penetration as one of the essential key performance indicators.
Vital to companies is to be able to base the selected KPIs on actual internal situations they find themselves in. There is no denying that one cannot give what one does not have. This simply means that if goals and objectives are to be achieved, and goals and objectives are general among companies competing for the same market, key performance indicators must focus first on acquiring what one does not have before any substantial gains can be made. What this tells us is that research must be able to describe accurately what a company has now — its strength, weaknesses, and opportunities. Only after determining this, can one be sure what KPIs to employ.
There is one KPI common to all organizations and that is how they respond to external and internal issues. In a constantly evolving business climate, it is imperative for organizations to be always updated on trends that can impact on performance and profitability and adjust plans and the allocation of resources accordingly. Evidently, if one can effectively measure responsiveness to changing scenarios, this must be top among the list of key performance indicators.
The most important asset of organizations is their human resources. This goes without saying that employee performance or productivity is a constant key performance indicator. Employee productivity or performance can be related directly to all other KPIs that organizations employ — revenue, customer satisfaction, product quality, and the like. Thus, the best strategy for companies desiring a dynamic structure is to place human resource development at the top of the list of key performance indicators.
Unfortunately, evaluating employee productivity is not that easy. There are many factors that impact their performance, like workplace environment, inappropriate management policies, job mismatching, salaries and benefits, inadequate training, and many others. All these can affect productivity, which in turn, affects other key performance areas.
What this all boils down to is that productivity, which is the core KPI of any organization, must not be assessed only in terms of quantitative figures, but must be analyzed for underlying causes as well. This, of course, requires institutionalization of continuous KPI company research that starts from its efforts to develop committed and efficient human resources.
Tags: company kpi, kpi research