Key Performance Indicators Should Reflect Your Business' Goals

Last week we discussed an overview of the characteristics of good Key Performance Indicators. As promised, we will delve into each characteristic a little more thoroughly.

First, your business goals should determine what things you will measure. Here is an example:

A local mall cafe providing lunches to workers in the surrounding office buildings will need to serve its customers promptly and efficiently to meet its overhead as well as make a good profit. They choose not to encourage customers to linger at their establishment. Customer turnover is an important goal in their business plan.

On the other hand, a street front restaurant in the local shopping center may decide that high customer satisfaction will bring in repeat and higher-spending customers it needs. In this instance the goal is to encourage repeat business by eliminating any reason for customers complaints.

In each case the choice of the KPI to monitor will need to reflect the goal of the particular establishment. To determine what that KPI might be, we will need to look at the critical success factors that would drive achievement of that goal.

Come back next week to learn how your KPIs should be derived from your Critical Success Factors. In the meantime, please call a Simons Bitzer team member at (317) 782-3070 to speak to someone personally about establishing and monitoring your own indicators.