In a previous article in this magazine (‘The new thinking on key performance indicators’, F&M 133), I discussed the importance of identifying, measuring and monitoring a business’s winning key performance indicators (KPIs). Companies with 250 or fewer employees often ask if identifying winning KPIs would work for them and, crucially, whether there is a simpler, truncated process for doing so. The answer is yes to both queries. I have seen a two-person recruiting agency monitor their KPIs on a daily basis to great effect! Many successful small to medium-sized enterprises (SMEs) rely on the natural ability of a few key people, and when these individuals sell up or move on the organisation often changes dramatically for the worse, because their intuitive ‘feel’ for the business has not been shared or passed on to others in the business. By embedding winning KPIs better, SMEs would benefit from:
- knowing their critical success factors (CSFs) and conveying them to all staff;
- more widespread empowerment, and clarity on what should be recorded and reported;
- CEOs – current and future – connected to staff who are working with the CSFs, eg with daily follow-up calls on the KPIs; and
- staff’s daily activities linked to the strategic direction of the organisation.
Even though an organisation has a strategy, teams are often working in directions very different to the intended course. If the CSFs of the organization are clarified and communicated, staff will now be able to align their daily activities closer to the strategic direction of the organization.
The 8 phases of implementing KPIs in SMEs are:
- Selling the change and agreeing on the appropriate timing
- Workshop to find the organisation’s CSFs and start team scorecards
- KPI project team trained and empowered
- Teams complete their scorecards and record their measures
- Selecting organisational ‘winning KPIs’
- Developing the reporting templates and guidelines
- Facilitating the use of winning KPIs
- Refining KPIs in 12 months to maintain their relevance
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Newly Updated: Database of Measures and Associated Success Factors 4th Edition (Updated August 2019)