Today’s Business Lesson Found on Key Performance Indicators (KPIs) comes courtesy of Joe Galvin, Vistage’s Chief Research Officer.

As Joe states in 4 ways to use KPIs to gauge the health of your business, KPIs provide a “view of the trajectory of your business, and when they change, you can predict long-term impact” on the business.  As such, they are an important tool to “help a CEO know whether their company is performing well, operating efficiently, and meeting its strategic goals.”

Of course, KPIs are only as good as what is being measured.  Joe offers four recommendations to ensure your KPIs result in meaningful and actionable guidance.  Here’s a brief rundown of those recommendations.

  1. Think critically about the KPIs that make sense for your business.” “What does your business depend on for its success?”
  2. Calculate rates of change for a deeper understanding of your most important KPIs.” “To measure your rates of change, take your key metrics and add in trend lines for rolling 12-month percentage change and rolling three-month percentage change to calculate the velocity of change.”
  3. Benchmark your data against external factors.” Overlaying your trend lines with competitors and industry trends provides a benchmark for your progress. Adding economic data such as GDP, Consumer Confidence, Manufacturing Inventory trends or other statistics, and analyzing both current and historical data, gives you a better idea of where your business is headed as the economy shifts.
  4. Give everyone ownership of your KPIs.” In my opinion, this is the most important of Joe’s recommendations. Introduce KPIs to your full staff in a clear, simple to understand manner and reward them for their part in achieving KPI objectives. If done correctly, you will boost morale and enhance the team once everyone knows how they fit into the big picture and become masters of their own fate.

As we enter 2020, let’s remember the significance of that number. 20/20 is the standard for expressing clarity and sharpness of vision.  Clarity within your company is achieved by establishing KPIs, or similar performance measures, for everyone in the business.

Want to learn more about KPIs or about becoming part of a community of CEOs and owners to work on those issues keeping you up at night?  Let’s get together for your free, no obligation initial consultation. Reply to this email (mark@StratigicBizGroup.com) or call me at 717-439-6254.

And Happy New Year!  May it be a healthy, prosperous 2020 with a clear vision forward!

Life brings us lessons every day.  Sometimes from expected sources.  And sometimes from sources and situations we never would have thought possible.  Either way, they are a gift found. I am fortunate to find these types of lessons regularly and wanted to share them with you with this weekly series of “Lessons Found”.
Did you recently receive the gift of a Lesson Found that has helped you with management, marketing or another aspect in business? I would love to hear about it. Comment below or send me an email to let me know.

ACKNOWLEDGEMENT:  Photo by VisionPic .net from Pexels