All for-profit organizations are looking to make a profit and achieve their growth objectives. But what information and data can they use to predict results and steer operations? How do they access accurate, real-time data that’s presented in a clear and meaningful way? Merkur’s consultants have found that many companies don’t take advantage of all the data at their fingertips. Yet data is key to understanding their actual performance.
Are your KPIs actually KPIs?
KPIs (key performance indicators) measure performance and are vital to the proper functioning of any company. Management teams are well advised to understand these indicators and monitor them closely, as they provide an objective view of the situation at hand.
KPIs can be implemented at various levels throughout your company:
- For tasks
- For entire departments
- Across the organization
No matter where KPIs are deployed, the important thing is that they must be interrelated and line up with your organization’s objectives. Merkur can help you assess the quality of your KPIs.
Use a dashboard
Once your KPIs have been identified and deployed at the appropriate levels, how do you maintain good visibility despite the influx of data? Think of the dashboard in a car. It shows your speed, RPMs, engine temperature, and more at a glance. Likewise, a company’s dashboard is an array of KPIs that it wants to monitor to get an overall view of its operations.
By grouping this data together in the same chart, you get a clear, accurate, and up-to-date overview of your situation. It also gives you an easy way to identify problems that need to be addressed.
As with KPIs, each department can have its own dashboard covering sales, operations, finances, and more. Each team gets its own custom view of relevant data at the desired frequency: weekly, daily, or even in real time with tools like Power BI. Care must be taken to ensure the dashboards are linked together and align with the organization’s goals.
Strategic dashboards in tune with customer needs
The balanced scorecard (BSC) is a strategic dashboard created by Robert S. Kaplan and David P. Norton that links KPIs and monitors an organization from four perspectives:
- Internal processes – Operations
- Human Resources – Employees
The challenge in setting up the BSC is establishing the causal links between the four perspectives. Starting with a company’s financial objectives, the first step is to measure critical aspects of customer satisfaction that ultimately impact your bottom line. Then you determine the key business process metrics that reflect customer needs and establish human resources development objectives that line up with your business processes.
The BSC is a fully integrated strategic management system that forces decision makers to look at what customers want BEFORE turning their attention to internal processes. Implementing the BSC is complicated, so it’s worth seeking out competent and experienced experts for support.
There’s a direct correlation between employee and customer satisfaction, so wise managers make customers the focus of their measurement tools. In order to see their company’s actual performance, managers need to make sure their performance indicators are aligned with their organizational objectives.