(It´s critical to measure …)
When one of my contacts inquires me about the single indicator of business efficiency, I simply answer with a question: What is that company measuring ? In my more than 16 years of executive roles & last 5 working as an advisor I´ve been confirming on a daily basis that a sentence than an american CEO told us more than 10 years ago is really the answer to the efficiency question: “What gets measured, gets managed” (Original quote by global thought leader Peter Drucker)
No company will survive in today´s global complex world without an appropriate set of well designed kpi’s (Key Performance Indicators) that help management team understand “as is” situation and guide their decisions towards “to be” desired state.
Having right business kpi’s is absolutely critical for managers, so they can do what they´re supposed to (manage business towards sustainable success)
At this point all of our reader would say, so… why don’t all companies have their ideal set of kpi´s implemented ? Because, this is not so “simply”, there are many barriers for establishing them, measuring them, analyzing them & taking decisions based on them… Major ones are the natural human resistance to changes, and the pressure of some parts of organization to avoid “being measured” during the development of their activities. Imagine what will happen if you cannot measure a soccer, basket, football, tennis player & share him/her statistics after a match and compare/benchmark them with other players ? How would you decide then who should be best paid, which one is missing at your team, who should you change next game, who should you buy/sell in coming season….? Really very difficult without measuring their performance… that´s why you simply need good kpi’s at your business, in each and every area/function of ir.
My summary for this post has relation with one of my older ones (Triple axis…): Build the right/ideal kpi´s for your company, while developing together the best organization & team and at same time improving key business processes.
Enjoy your kpi’s designing & implementation, and be sure they will help you towards success…