Building performance indicators for success
Let's face it, metrics are too a penny. You can look at almost every business area and swiftly find well intended measurements helping to manage and monitor a task or business area success. The special challenge faced by most managers, leaders and ambitious workers is choosing the correct and most impactful Metrics, KPI's (Key Performance Indicators) , KRI (Key Results Indicators) and CSF (Critical Success Factors).
So let's look at how a business can build and develop metrics that have high value positive impact. This task can appear complex. The below step review will help your business define clarity for your metrics contribution and relevance.
- Understand the frequency of use for any given metric.
- What are the consequences if this metrics results are not acted upon?
- How does the metric link directly to a business objective?
- What is the internal level of influence over the metric?
- Define the quality of the metric data required.
Common metrics mistakes
Within the below JAMSO Slideshare deck is a highlight of step by step mistakes we often see within the use of metrics. At the end of the presentation is an check list to help you find common errors. This should be used as review process for all your existing business metrics.
Well done, you have now already gone further than many companies! Your decision to review, cleanse and define your basic metrics is a bold and effective step for your success. I suggest you place a reminder in your diary to review your metrics again in the future, set the date to match your business culture and growth, this may be 3 monthly for some companies or 12 monthly for others and a range of frequency in between.
Design of effective kpi's
The review of your metrics will now highlight some key areas of your business that are been well managed and other areas that require improvement. We strongly suggest the case of a BIASED (not balanced) SCORE CARD system is used. The key considerations for effective KPI design is shown within the below Slideshare deck. Review your own business KPI's to strengthen their positive impact for your business.
We have now covered a broad review of your metrics and ensured the KPI's address your business markets, financial goals, need for systems and process improvement plus retaining and developing the best skills and engaged staff.
Designed in metrics failure
One of the biggest challenges for international companies is to develop an acceptance across many diverse national cultures the acceptance of failure. The most prevalent methods of business success is measured through it's success and not it's failures. However, the strength and power of implementing the OKR (Objectives Key Results) system within a business is seen through the success of many leading companies. Review the slideshare deck below to gain an insight and appreciation of stretched goal setting with metrics for high impact change in business performance.
There are indeed many different business goal setting systems but OKR is a simple and effective tool to generate focus and clarity through metrics and measurement. The core principles of these steps can be integrated within a range of bespoke or standard performance management systems.
The business measures that matter
So far we have questioned, reviewed and I hope fixed some of your business metrics. We have also defined some key performance areas of the business to generate metrics that matter the most.
An implementation process has been proposed through to accept an element of failure within your business but a key question is how do we ensure these changes retain meaningful and of high value and impact for your business? Well, this is the purpose of the performance management review process. I call it a process to ensure we retain laser focus on results and significant steps for a business.
Use the guidelines within the below slideshare deck to create the personal and corporate links for ambition, development, principles and development. The need for open communication and expectations is a clear message and take away - this alone helps identify impactful metrics. The deck includes key elements for success such as accountability and the importance of simplicity within a common message.
The process to building impactful metrics never stops. There are many hard and soft areas to be included. Never forget each metrics has a specific life cycle . Some measures will start as basic metrics, turn into a KPI, return to a basic metric and then expire and be no longer measured. This is natural and should be a key goal for most companies.
Leaders of change
An effective leader, is a leader for change and positive improvement. Seek and encourage your staff and leadership to challenge, improve and be open minded with metrics. Ensure their training and education levels understand the difference between measures, metrics, KPI's and relative success linked to corporate goals.
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