How To Measure Key Performance Indicators In Your Business
Updated: Aug 27, 2022
As a business leader, one of the most important things you can do to gauge success is to view your company’s KPIs. Key Performance Indicators, also known as KPIs are performance measurements that a business uses to ensure that the company is on track for a successful business year. There are four major types of key performance indicators that all business owners should be able to measure: internal process quality, customer satisfaction, financial performance, and employee satisfaction. These four areas are critical to your success, and I want to share with you ways to measure each of these in your business.
Internal Process Quality
Ensuring quality control of the internal process can be done via a project management system. Every time a team member completes a task on or before the due date, the system will calculate that into a rate of completion. This can easily be turned into a report that can be pulled by the project manager to ensure that tasks are completed on time for clients and customers. This KPI will also tell you things like the average time it takes to complete a task if a project is in good standing, and more. Not only is this a great internal KPI, but you can also utilize these numbers in potential stakeholder meetings when explaining the value that your company brings to the market, which in turn creates a longstanding need for your company. Now that is a win-win for you and your team!
Without customers and clients, there is no business, so a customer satisfaction survey is a perfect opportunity to hear from your customers about how you are doing. Keep in mind that this KPI will be a mix of qualitative and quantitative, it will be a good way to gauge what your customers truly think of you. I personally encourage you to conduct these once a quarter so that you can familiarize yourself with how the client is doing, and you can know what areas to improve in. Having open and honest conversations about performance can also build a trusting relationship with a client. Remember that people want to do business with people that they trust, so a customer satisfaction survey is a great way to establish and continue trust with a client.
This KPI will be the most cut and dry out of them all because it is a simple question that you must ask yourself: is the business on track to make a net profit? How much net profit has already been made? How close or far away from the target goal for the quarter is the business? These questions and more need to be answered as you determine what the strategy will be moving forward in business. Financial KPIs will also help you determine what to start, stop, and pivot from doing in terms of expenses and spending.
It doesn’t matter if you have contractors, subcontractors, or employees. The people that you work with matter. The work environment matters. The company culture matters. Employee satisfaction also determines the likelihood that your team will stay with the company for an extended amount of time. This presents itself as the perfect time to create an employee satisfaction survey. In the same way that you create the customer satisfaction survey, take the same approach with your employees. If you want to create a safe space, make the survey anonymous, and truly listen to what your team says about working at the company.
KPIs are not this immeasurable thing that a business coach tells you to have. Think of them as a thermometer for your business, where its job is to tell you how the business is doing. By keeping an eye on key metrics, you will be able to know where to pivot in your business, and where to continue in the great work you are doing.