Mapping your business objectives to well-marked key performance indicators (KPIs) allows it to remain more competitive and progressive. It is important to establish KPIs that can help minimize a wide range of uncertainties. This is especially true today now more than ever as we see a rise in cross functional teams, remote working, new technology triggering changes in work and the shifting market as the world recovers from the economic impact of the pandemic.
Importance of establishing clear KPIs
- Supports clear internal messaging: a clear set of KPIs serves as a North Star for everyone to focus on without them misinterpreting the wider objectives.
- Enhances effective partnerships: a company with strong KPIs knows exactly what it’s working towards and has a reinforced purpose for working with its partner. The two parties who can easily communicate their purpose will support each other and help each other in achieving their individual goals
- Keep companies focused on where to spend and invest time and money
- Help to vet new opportunities whether they be new technologies or new partners due to constant goal achievements.
Today’s world is heightening the importance of KPIs
As a business you can plan for what you know and set your objectives accordioning, backing these with tangible metrics enables you to respond to outside influences by giving you a clear guideline on how to measure your response.
For instance, several months into 2020 business had to alter entire operations to allow for remote working almost overnight. As a result the need to understand the impact on productivity quickly was a necessity. For those businesses with clear metrics assigned to goals there was a measure of normal and a measure of the targets needed and these could be used to review how the changes to work practices were affecting output. Those without KPIs in place struggled to catch up to the effects of these changes and react accordingly.
The global changes we have seen in 2020, and for many businesses the start of 2021 means a lot of uncertainty. This inevitably impacts your employees and their concerns over job security. By being able to point to your business success, backed by well-established KPIs will allow you to communicate more effectively to employees. Your team needs to know where you are headed and how that journey is going and clear KPIs allow a common language across departments to tell that story and not rely on misinterpretation.
Looking away from the impacts of the pandemic businesses have been responding to technology changes. As the rate in which technology is relied upon for all businesses increases this puts those working in this sector in a place of heightened demand but also competition. It can be tempting to move quickly to stay ahead but this may be to your detriment if not done carefully. Having a set of established KPIs will provide you with a template from which to start making decisions and quickly measure the impact of those decisions. For example if you are looking to launch your offering to a new sector and you gain new customers quickly can you easily determine if this rollout is going well if you have no measure of customer satisfaction?
Having a firm set of measurements to turn to is not only going to help you weather any challenges 2021 has to offer but it will allow you to recover and grow more quickly this year by having a way to measure your decisions
