Imagine that your boss gives you a book of 100 pages, asks you to understand it well, and takes it from you after five days.. In this case, you will have two ways, the first: you start reading in a random way, excited at first, and then slowly takes you apathy, Until the five days are up and you haven’t finished the book yet.
The second method: to think of a plan that fits the completion of this book in the required period, so you distribute the 100 pages over four days to read 25 pages each day, and leave the fifth day for review. This is the role of performance indicators in this process, every day you see your performance and compare it with the plan, so you can measure the results every day, even every hour if you want.
Meaning of KPIs
Key Performance Indicators (KPIs) are metrics that convert big, general goals into specific, clear, and easily measurable goals and small steps. Through performance indicators, you can measure the success of the organization or person in achieving the required tasks and goals.
Many believe that KPIs are only used to evaluate the performance of large projects and programs, or to evaluate strategic plans only, but in fact they can be used on a personal level – as I mentioned to you in the example – and they can be used to evaluate the performance of small departments and employees, and you can also use them to measure the performance of a service team customers or call center.
How to Set Performance Indicators for Each Goal
Just understanding the performance indicators makes you put all your goals in an organized and clear framework, but beware of entering the labyrinth of goals, as the large number of goals and crowding them will negatively affect their achievement, even if you use the appropriate performance indicator scale for each task. Your entry into this labyrinth will be a cause of confusion for employees and distraction of their efforts, and the failure to achieve any success in all goals.
Put all your goals on a piece of paper and start ordering them in order of priority, most important, most important, then least important…and so on. Determining goals is based on your company’s position and its market strength. For example, if it is a startup company, the first goal will be to publicize the brand and work to increase awareness of it, and expand your customer base, but if it is larger, it will be a priority to increase sales and profits, for example, and so on.
After setting the goals and before starting to develop the strategic plan and determine the performance indicators, analyze the competitors first, and what is meant by competitors are companies that are similar in size to you, it is not correct to be a startup company and considered a global brand to compete with you! Because the target segment of this brand is completely different from the target segment of your company.
Your competitors are the ones who target the same customer segment as you, analyze their strengths and weaknesses, know their goals and rates, compare all this information with your counterpart, and study the matter well. Do your current capabilities enable you to achieve higher rates than them? Or do you need some modification and development?
Studying and analyzing the competitor is one of the most important things that help you in setting indicators to measure performance in a professional and high-accuracy manner. To make it clearer, I will mention to you the most important factors that you should consider while setting the measurement indicators for your company’s performance.
KPI Success Factors
Before you set your performance indicators, be sure to clearly define your goal, then you will take these factors into account to ensure that you are going according to correct and realistic indicators.
Digital Indicators: Make sure you have indicators that you can express in numbers and put them in clear reports, do not slip your foot in qualitative metrics that are difficult to measure.
Realistic: While choosing and challenging indicators, rely on your capabilities and qualifications that you possess in reality, do not rely on wishes and fantasies, and do not let your enthusiasm and drive for success deceive you.
Simple and Clear: Don’t set up complex indicators that are difficult to understand and measure, but rather make clear and simple indicators that the whole team can measure.
Aligned with the Company’s Strategic Goals: Your long-term goals and your company’s future are not in one valley and your benchmarks are in another. The goal of setting performance indicators is to achieve the company’s strategic goals.
Linking indicators to the general goals of the company is one of the most important factors for the success of your company, and therefore the indicators will cover all departments of the company, to ensure that everyone moves in one direction and seeks to achieve one goal. If you feel that you are in the maze or about to enter it, stop immediately and ask yourself these questions:
–What are the Main Goals i Want to Achieve?
–Do these Goals Accept Digital Measurement?
–What is the Appropriate Time to Measure it?
I’ll Give you a Simple Example to Illustrate this:
What are the Main Objectives?
Increase sales by 20%.
Do you Accept Digital Measurement?
Yes, by knowing the total sales.
The Appropriate Time to Measure?
Each month, comparing the result to the same month’s sales in the previous year.
Update Performance Indicators
The nature of the market has nothing fixed, and this will result in changes and updates within your company and system, and this change may reach your general goals, and therefore these changes will be reflected on your performance indicators. All this change may not happen and you may have to update the indicators, because they may be a little off your goals when you first set them.
Be sure to review your performance indicators, and analyze the results on an ongoing basis, to make sure that you are on the right track. Do not be lazy to seek advice from those around you, listen to their advice carefully, follow your competitors and study their movements, so that you can produce highly accurate and professional performance indicators.
If you have questions or inquiries about performance indicators, tell me about them in the comments, and do not forget to share the article with your friends.