Do you ever look at certain companies, whether global sensations or local favorites, and wonder – what is it that makes them such strong front-runners in competitive environments? Imagine the potential impact on local businesses and local economies if we could figure that out. After all, strong local businesses build strong local economies, and that benefits everyone.
Of course, there’s a myriad of factors that contribute to accomplished businesses, from having a compelling value proposition that meets certain needs or desires to brand, strategy, customer service, employee engagement, and more. Still, one of the most fundamental but critical drivers of business success is this: setting, monitoring, and measuring key performance indicators (KPIs).
A KPI measures activity that is critical to successfully compete in the marketplace. It can show when something is working well and should continue, while pointing to potential issues and necessary course corrections to keep a business and its employees focused and on track.
A business may have three or four overall KPIs and require each business function and individual employees to set KPIs as well. This way, all efforts are aligned to drive common goals.
In addition to evaluating critical activity, a KPI must be realistic, specific, and quantifiable. It should highlight areas where increased efficiency/decrease in use of resources can be achieved, and illustrate progress over time.
Implementing and tracking KPIs provides reliable data to streamline decision-making, encourages teamwork by promoting cooperation, and offers clarity for workers in terms of performance expectations. (As an added bonus, they can also help identify seasonal trends.)
Setting a KPI is just the start – the real value comes from regularly checking in to see if progress is being made and having a clear course of action once the results of the KPI are known.
Implementing KPIs can increase your business’ efficiency and production capability. An added benefit, KPIs can generate a positive attitude among team members by letting individuals know how they contribute to a business’ success. Setting, monitoring, and measuring KPIs regularly can reenergize your team and align everyone to work together to achieve the same goals. For information on KPIs, see our story: “Are You Using the Right KPIs for Your Brewery?”
If you are interested in learning more, RBT CPA advisory services professionals are available to help. (We can also support your tax, audit, and advisory needs). To learn how we can be Remarkably Better Together, give us a call today.
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