1. Key performance indicators
Let's dive now into defining essential metrics for dashboards.
2. What are key performance indicators?
Key performance indicators (KPIs) play a critical role in monitoring business health.
They allow companies to track their progress against their goals,
establish an analytical foundation for decision-making,
focus on areas that need attention,
and provide a basis for strategic and operational improvement.
Creating KPIs is a relatively straightforward process.
Establish the company's goal.
3. What are key performance indicators?
Identify the best measure for tracking progress towards that goal.
4. What are key performance indicators?
And decide when and how often to track progress.
5. What are key performance indicators?
It is often recommended to aim for between two and four KPIs per goal.
6. KPIs measurements and types
Every organization needs to track both operational and strategic measures. These measures include:
input metrics for the resources consumed in business processes,
process metrics for the efficiency and quality of processes,
outcome metrics for the work completed.
Strategic measures focus on accomplishments and their impact on organizational goals.
7. KPIs measurements and types
They can be divided into intermediate and end outcomes.
8. KPIs measurements and types
An example of intermediate outcomes is customer brand awareness as a result of marketing or communication.
9. KPIs measurements and types
An example of end outcomes is customer retention or sales.
10. Kaplan & Norton balanced KPIs
It is also important to track KPIs from different perspectives.
Kaplan and Norton's framework divides measures into four perspectives.
11. Kaplan & Norton balanced KPIs
The financial perspective is related to financial performance and results, such as return on investment.
12. Kaplan & Norton balanced KPIs
The customer perspective is related to customer satisfaction and loyalty, such as service rating.
13. Kaplan & Norton balanced KPIs
The internal processes perspective is related to the efficiency and effectiveness of internal processes, such as cost units.
14. Kaplan & Norton balanced KPIs
Organizational capacity measures the resources and capabilities needed to achieve organizational goals. Employee retention is an example.
15. Are you leading or lagging?
Also indicators can be lagging or leading.
Lagging indicators are focused on historical performance.
They indicate where your business has been
and show outcomes using business output metrics.
They usually provide high-level metrics.
Sales revenue is an example.
Leading indicators give early indications of performance
and measure where your business is going.
They use input metrics to show the progress toward goals
and provide fast feedback on your efforts.
Website traffic is an example.
16. Objectives and key results (OKRs)
To connect measurable success criteria with the company's goals, an objective and key results methodology can be used.
OKR is a goal-setting method to improve performance
17. Objectives and key results (OKRs)
by achieving specific, measurable objectives.
18. Objectives and key results (OKRs)
It is frequently reviewed and adjusted.
19. Objectives and key results (OKRs)
aligning the team's goals with the company's objectives.
20. Objectives and key results (OKRs)
In contrast, KPIs are business metrics for performance measurement
21. Objectives and key results (OKRs)
showing progress towards a pre-determined target.
22. Objectives and key results (OKRs)
It is typically re-evaluated annually
23. Objectives and key results (OKRs)
and used by leadership.
24. Goals: be S.M.A.R.T. or even S.M.A.R.T.E.R.
To evaluate business performance, it's essential to set up goals. That's where the SMART framework comes.
SMART stands for:
25. Goals: be S.M.A.R.T. or even S.M.A.R.T.E.R.
specific and well-defined,
26. Goals: be S.M.A.R.T. or even S.M.A.R.T.E.R.
measurable to evaluate the success,
27. Goals: be S.M.A.R.T. or even S.M.A.R.T.E.R.
achievable and realistic,
28. Goals: be S.M.A.R.T. or even S.M.A.R.T.E.R.
relevant to business strategies and aligned with the company's mission,
29. Goals: be S.M.A.R.T. or even S.M.A.R.T.E.R.
time-bound, with a defined deadline.
30. Goals: be S.M.A.R.T. or even S.M.A.R.T.E.R.
But we can make our SMART goals even smarter by adding two additional categories:
evaluate and revise or re-adjust.
31. Let's practice!
Let's put it all into practice.