KPIs (Key Performance Indicators)
Understanding when goals are reached is a necessary aspect of business acumen. Key performance indicators (KPIs) are metrics that show when goals are met. Each company will have a different set of KPIs, depending on individual business needs. Creating and managing KPIs will improve the success of your business as well as your own business acumen.
KPIs need to be developed decisively. This requires an understanding of which performances need to be measured and how they should be measured. Creating random metrics will not help gauge the effectiveness of your organization.
· Define areas to monitor: Determine which areas are successful and which ones need improvement.
· Identify criteria: Brainstorm ideas, and use them to create criteria that need to be monitored. For example, criteria would include customer conversion or units per transaction,
· Define the measurements: Create specific SMART goals to monitor. An example would be an average of three units per transaction.
Once you have decided the type of KPIs you want, you need the buy in of the stakeholders. Communicate the information decisively and make sure that everyone understands the purpose.
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Tina Oliver, M.Ed.