If you want your business to enjoy sustainable growth, it’s important to know the Key Performance Indicators (KPIs), which MUST be performed well in order to achieve your forecasts and goals.
What are KPIs?
A Key Performance Indicator (KPI) is a way you can measure the value of a business objective by showing how effective it has been towards achieving a key goal. By using KPIs in your business it can act as an early warning system that will notify you when targets have not been reached.
How many KPIs are there?
Broadly speaking, there is no actual limit on the number of KPIs that are available for a business to use. In fact, there are a number of financial and non-financial measures that can easily be put in place to monitor performance.
They tend to fall into four main categories:
Financial KPIs: Factors that affect revenue, net income, cash flow, your balance sheet or any other kind of financial success fall into this category.
Growth KPIs: By using KPIs to analyze growth factors, you can focus on the areas of your business where more investment will reap an even bigger return.
Customer KPIs: Using KPIs to monitor customer satisfaction or the frequency of repeat purchases can help to reduce your ‘churn’ rate – and lessens the need to win new business.
Operational KPIs: These scrutinize the efficiency of your business and can lead to improvements in shipping or delivery times, the inventory of products and lag times.
Which KPI is best for my
business?
We’d all love to know which KPIs have most impact on our business. Most of us don’t want to get too bogged down in KPIs and suffer from information overload.
Following is a four-step plan to help prioritize your KPIs.
Step #1: Write down the three most important KPIs for your business to be a success. Make sure they are closely tied to the sector you are in, as this will provide a more accurate picture of overall performance.
Step #2: Look at the KPIs and decide whether they need to be successful in the short term or established if they are more in tune with long-term growth.
Step #3: Decide whether immediate growth or long-term growth is more important to your business.
Step #4: List the KPI with the most pressing needs first, place the least most important one at the bottom and put the remaining one into the second spot.
Once you’ve identified the three most important KPIs to focus on, you can then work out what data you’ll need (and how you’ll collect it) to measure them effectively. Remember to only collect and track what’s most important.
If goals are not being met, it’s important to identify the underlying cause of the problem and consistently focus on improving it every month.
If you’d like to take the time and hassle out of finding your most effective KPIs, contact our office today to schedule a consultation.
Strategic Planning:
The Basics
The objectives of strategic planning including understanding the benefits of strategic planning, understanding the products of strategic planning, and learning the keys to successful planning and implementation.
Many organizations spend most of their time reacting to unexpected changes instead of anticipating and preparing for them. This is called crisis management. Organizations caught off guard may spend a great deal of time and energy “playing catch up”. They deplete their energy coping with immediate problems with little energy left to anticipate and prepare for the next challenges. This vicious cycle locks many organizations into a reactive posture.
It does not have to be that way. A sensible alternative is a well-tested process called “strategic planning”, which provides a viable alternative to crisis management.
Strategic planning is a step-by-step process with definite objectives and end products that can be implemented and evaluated. Very simply, it is a process by which we look into the future, paint a picture of that future based on current trends, and influence the forces that will affect us.
Strategic planning looks three to five years ahead and charts a definite course based on strong indicators of what the business environment will be like in those years.
Indicators include census demographic statistics, economic indicators, government policies, and technological advances. They reveal strong trends regarding changes in lifestyles and the economic and political climates, which are important factors influencing the facilities planning and management industry.
Some of these trends are potential opportunities, some potential threats, and some are both. Examining the possibilities and formulating strategies to meet the challenges can help the organization take full advantage of opportunities and minimize threats.
In short, we can take control of the future. We can use our energies and resources more effectively and conduct our business more successfully, despite changes in the environment.
Why Strategic Planning?
Besides the personal satisfaction of taking charge of the organizations future, strategic planning offers at least five compelling reasons for its use.
1. Forces a look into the future and therefore provides an opportunity to influence the future, or assume a proactive posture.
2. Provides better awareness of needs and of the facilities related issues and environment.
3. Helps define the overall mission of the organization and focuses on the objectives.
4. Provides a sense of direction, continuity, and effective staffing and leadership.
5. Plugs everyone into the system and provides standards of accountability for people, programs, and allocated resources.
In summary, strategic planning is the key to helping us collectively and cooperatively gain control of the future and the destiny of our organization.
Five Products of Strategic Planning
The overall goal of strategic planning is to produce a workable plan. Along the way, we will develop, evaluate, and refine these five products:
1. Environmental Issues And Trends: Internal issues include staff, services, skills, resources, and needs. External factors include such things as threats of outsourcing. A strategic planning committee compiles an environmental scan, a body of information about the environment. Broad issues, singled out as potentially having significant effect on the facilities planning and management industry, are referred to as mega issues.
2. Needs Survey: This provides information from clients and peer institutions. The prioritized needs and expectations resulting from the survey are crucial as a basis for setting objectives.
3. Mission Statement: This defines the organization’s fundamental reason for existence and establishes the scope of its business.
4. General Objectives: This broadly describes the results of what the organization wants to achieve in light of needs and relevant issues.
5. Strategies: These are specific, measurable actions and directions designed to reach the objectives established. Strategies are fulfilled through creation, continuation, change, or elimination of programs.
Keys to Successful Implementation of Strategic Planning
The three major keys to successful strategic planning and implementation are commitment, credibility, and communication.
Up-front commitment by the leaders must include an adherence to the full and thorough process of strategic planning. There must also be a commitment to implementing the recommended strategies.
The leaders should implement programs and services and commit allocations to meet the objectives of the strategic plan at a level that is doable for the organization and level of activity.
Credibility is created and maintained by following these three guidelines: representative participation, adherence to the complete process, and clear documentation.
While the actual logistics of research and implementing the plan can be tailored to the available resources, all five products should be carefully developed and evaluated.
Input, feedback, and understanding are crucial at every step. A key concept to remember is that strategic planning is a cooperative and participatory process. Everyone should have input and, ideally, everyone should feel a sense of ownership over the final plan. Such personal commitment will facilitate the implementation process.
An additional aid to implement the strategic plan is to create an integrated system by which the strategic plan becomes the benchmark for progress in our organization. It then becomes a system of accountability.
The best way to set up an integrated system is for the directors to accept the strategic plan and make the mission statement part of the directives. The strategic plan can then become the context from which programs and services flow. Strategic planning is the key to assuring that our organization is prepared for the challenges of tomorrow. We are experts at strategic planning – call our office today to schedule a consultation.
SMART Goals: Making Your Goals Achievable
Do you ever feel like you’re working hard but not getting anywhere? Maybe you see little improvement in your skills or achievements when you reflect on the last five or 10 years. Or perhaps you struggle to see how you’ll fulfill your ambitions during the next few years.
Many people spend their lives drifting from one job to another, or rushing around trying to get more done while actually accomplishing very little. Setting SMART goals means you can clarify your ideas, focus your efforts, use your time and resources productively, and increase your chances of achieving what you want in life.
What Does SMART Mean?
SMART is an acronym that you can use to guide your goal setting.
1. Specific: Your goal should be clear and specific, otherwise you won’t be able to focus your efforts or feel truly motivated to achieve it. When drafting your goal, try to answer the five “W” questions:
- What do I want to accomplish?
- Why is this goal important?
- Who is involved?
- Where is it located?
- Which resources or limits are involved?
2. Measurable: It’s important to have measurable goals, so that you can track your progress and stay motivated. Assessing progress helps you to stay focused, meet your deadlines, and feel the excitement of getting closer to achieving your goal.
3. Achievable: Your goal also needs to be realistic and attainable to be successful. In other words, it should stretch your abilities but still remain possible. When you set an achievable goal, you may be able to identify previously overlooked opportunities or resources that can bring you closer to it.
4. Relevant: This step is about ensuring that your goal matters to you, and that it also aligns with other relevant goals. We all need support and assistance in achieving our goals, but it’s important to retain control over them. So, make sure that your plans drive everyone forward, but that you’re still responsible for achieving your own goal.
5. Time-bound: Every goal needs a target date, so that you have a deadline to focus on and something to work toward. This part of the SMART goal criteria helps to prevent everyday tasks from taking priority over your longer-term goals.
It’s important to give yourself a realistic time frame for accomplishing the smaller goals that are necessary to achieving your final objective.
SMART is an effective tool that provides the clarity, focus and motivation you need to achieve your goals. It can also improve your ability to reach them by encouraging you to define your objectives and set a completion date. SMART goals are also easy to use by anyone, anywhere, without the need for specialist tools or training.
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