Hitting performance targets isn't easy. But if you knew there was a secret weapon you could deploy with minimal effort to achieve this, would you use it? Of course you would!

The secret weapon of choice for businesses that have grown, or been comfortably maintained over the course of the recession, is an acute focus on achieving company wide Key Performance Indicator (KPI) targets.

KPI's are quantifiable measurements which benchmark and monitor performance in all levels of your company on a regular basis. KPI's can also gauge the trends in your company, which helps you make critical decisions that move your business forward.

Because KPI's are company wide, the whole team has a clear understanding of what is important, and their role in making this happen, thereby encouraging employee commitment to improving your productivity growth.

Setting the right KPI's, and having a robust system in place to make sure KPI's are continually monitored and met, is paramount from the outset. It is important to know what drives your business. In order to do this, you need to know what your KPI's are, and how they compare with industry averages.

This is known as benchmarking. For commercial businesses, it might be gross profit percentage or sales growth. For farming it might be lambing percentage or gross income per hectare. In order to get results, KPI's need to be measured and monitored on a regular basis.

Key Performance indicator DO's:

• DO limit your KPI's to factors that are essential to the company reaching its goals.
• DO keep the number of KPI's down to just four to five per person / team or firm.
• DO have a mixture of daily, weekly and monthly tracked KPI's.
• DO benchmark your KPI's against industry standards.

Key Performance indicator DON'T's:

• DON'T have too many KPI's. It quickly will become an arduous task to track and measure them all.
• DON'T base your KPI's on those of another business. Your KPI's will differ depending on your unique critical success factors.
• DON'T get lazy and let the monitoring of your KPI's lapse.

At WHK, we can take the guesswork out of selecting exact right KPI's for your business. Plus we can benchmark those KPI's against the standards in your industry. That way you can see exactly where you sit compared to your competitors.
For further information, or to book a KPI planning session, please contact your WHK adviser.

FIVE STEP KPI SET UP PROCESS:

Step 1: Know what the key success factors to your business are (gross profit, sales per staff or productivity), and how they affect your bottom line. Translate these factors into KPI's.

Step 2: Know how to measure those KPI's and set up a structure to monitor them. Set targets or benchmarks for your business, staff or team. They need to be easy to measure and understandable.

Step 3: Act on the results of the measuring and monitoring process. Gathering the information is just part of the process; it is what you do with that information or knowledge that is important. You must make the required changes to your business.

Step 4: Celebrate the successes. Let the staff, team, firm all know when they have hit their KPI's.

Step 5: Evaluate those KPI's on a regular basis to ensure they are still the key success factors. Things change and so do the rules of running your business.

The one rule is keep it simple.