When asked which are the most important KPI’s
for a business, I share the shoe buying experience. Let me share some background. In a small business priority KPI areas are
often obvious, they need include the value of sales made, profit, cash flow, stock levels,
customer satisfaction and sales conversion rates.
Larger organizations still retain the same KPI’s but held in different departments
and not openly shared or available across the whole organization.
For instance the manufacturing cell department for widget x may want to concentrate on their
operational KPI’s, the procurement department on delivery performance and cost reductions,
IT and marketing on separate metrics. Through company growth phases such as start-up
to establishing market maturity, new technology opportunities exist to implement new relevant
KPI’s that need to be identified in such areas as improved efficiency, increased productivity,
brand metrics to steer the business in boosting its profits and even improve the staff retention
and employee development skills. There is great importance to retain a global focus
on how each of these separate KPI shall contribute to the business goals and objectives. OK,
now let us look at the steps of buying shoes and explore some similar sounding questions
to the correct KPI selection for your department or business. HOW TO BUY? 1) How long shall I browse the market and
research types of shoes available? 2) Do I buy online with a good returns policy or do
I go to a shop to try out the shoes? 3) After selecting the shoes at a physical shop do
I still buy online or purchase from the best provider in the high street or mall? 4) Before
making the final purchase decision it is good practice to visualize how the shoes will be
used and what concluded benefits we see in their selected purchase.
WHAT TO BUY? For any pair of shoes we are going to buy,
new questions need to be addressed. Are you seeking for a special event performance
improvement? What environmental conditions are you expecting
to wear your shoes in? For how long do you want your shoes to last for? Do you have a personal preference regarding
style, color, material and comfort? Are you seeking 1 pair of shoes or several? What size feet do you take? Are you a wide or normal size fit? Do you wish to have extra options like spare
laces or polish? Is there a special grip you need depending
on the surfaces you expect to use the shoes in? Will you have no socks on, tights, thick,
thin or normal socks when wearing the shoes? What level of budget have you set aside to
buy the shoes? Will they need to be waterproof, provide ankle
support, protect the toes in any special way? All of these are important some to a higher
and lesser degree to the person buying shoes. In conclusion, the shoes do need to fit, however
you may need to make some compromises. If we apply the above analogy to decisions
on KPI’s we can see it is relevant to go back to the business mission and vision. What
is the end destination the business wishes to bring itself to? From this question the
answers will drive pointers the correct and most relevant KPI’s. Consideration needs
to be made to external macro impacts to a business. These factors can bring a higher
or less importance to certain KPI’s, depending on PEST requirements (Political/Regulatory,
Economic/Environmental, Social, Technology). So, a business in China may have a higher
need for staff retention KPI’s, or a business in India may have electric supply continuation
KPI’s and a business in Ireland may have a skills development KPI, these are all specific
and relevant to their business in achieving the end goal objective.
“ Measurement is the first step that leads to
control and eventually to improvement. If you can’t measure something, you can’t
understand it. If you can’t understand it, you can’t control it. If you can’t control
it, you can’t improve it.” — H James Harrington It is clear that some
KPI’s at first appear to be universal and yet their significance may have variable weight.
We see this in measures of waste, quality, profitability, cash flow, customer satisfaction
and innovation to name just a few. 2 key elements in deciding your KPI is to
understand some basic factors in KPI design. 1) The KPI should be described where possible
in a numerical value, ratio or percentage. 2) Is the KPI a measure of an end result or
management of ongoing performance. “ I want to write a book about shoes that’s
full of footnotes.” — Jarod Kintz
If you are seeking new shoes then please use my above tips! If your business is seeking
clarification on selection of the most relevant and effective KPI’s then contact JAMSO and
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