Using KPIs to Identify and Solve Your Business’s Problems
No business is perfect—not even the ones that make the rounds on “Best Company”-type lists each year. Each has its flaws and challenges, but what makes them better than others is how a company confronts the obstacles it faces. Adapting Key Performance Indicators (KPIs) to reshape and solve problems is what separates great businesses from mediocre ones. But it’s important to establish the best KPIs for your company’s needs.
Put Your Aces in Their Places
Your team is what will consistently differentiate your company from the competition, but only if you’re getting the best out of them. Prior to hiring a person, employ KPIs to evaluate a candidate and where they best fit among your team. Reviewing a person’s resume is helpful to gauge their ability to keep a job, but a resume doesn’t hold all of the answers. Set up particular scenarios and questions during your interview process that will demonstrate the “street smarts” of a prospective employee. Using performance metrics to evaluate all candidates strengths will root out certain problem areas before hiring someone as well as deciding whether a candidate is better suited for a different role.
Check Your Timeline
Similarly, regular performance checks with current team members can solve (or even prevent) problems. Low sales numbers do not always translate into a staff issue. As you are aware, sales is a multistep process beginning with client recruitment. To fully understand lower-than-expected sales, you must evaluate conversion rates of each salesperson, as well as the time in between a new client is signed and places their first order. Tracking the entire process of a client relationship will indicate where there are lags and flaws. You may realize clients do not receive frequent follow up after a contract is signed or that more tenured clients operate on autopilot, without contact of their sales representatives, who could be boosting sales or simply increasing overall satisfaction. On the contrary, you may find out that sales are actually increasing overall, but you’re losing time, and therefore money, because client turnover is high. Tracking performance metrics for every aspect of your business is simple with the right technology and will prove to be a profitable investment because you’ll no longer be treating symptoms (i.e. increasing sales when revenues are low) but rather the problems themselves (like customer engagement).
Don’t Look Back
Reviewing your profit and loss statements of quarters past is helpful, but focusing in the rearview can be dangerous because they don’t evaluate the full scope of your inputs. Using KPIs to look forward and make predictions on what will affect your goals and how. KPI measurements will also dive into the specifics of whether or not a particular strategy is working. You will begin looking more critically at your successes and what drove your business in that direction and at your failures to understand what you incorrectly predicted. But as you begin to track and evaluation performance metrics, it’s important to get buy-in from your team. Creating incentives for KPI-driven behavior through game and reward systems will help change your team’s approach toward work. Though, it is equally as important to implement your KPIs slowly. The results you’ll find are likely to force changes upon your business. Analyzing the data and implementing changes at once can overload your team and lead to a strategic failure. You don’t have to perfect the process the first time around. Find what works best for your team through trial and error to be on your way to better results.