The sooner you identify issues, the sooner you can find a cure
Health professionals recommend seeing a doctor for a check-up every 2 years – even if you aren’t experiencing any symptoms. Why? The regularity lets them measure the vital statistics of your body and see if there are any concerning changes since the last checkup.
Just like in our personal health, our businesses have vital statistics that should be measured regularly.
These statistics – known as Key Performance Indicators or KPIs for short – make it possible to pick up changes before they become a problem.
Many business owners and managers rely on KPIs to keep their finger on the pulse of their business. KPIs can help show progress and results and allow owners to reward good work, as well as address unsatisfactory trends and performance.
Adopting KPIs to measure business performance
If you don’t use KPIs in your business, it’s not difficult to incorporate them into your business management toolset. The good news is, regardless of your size, your business will have no shortage of raw data to give you baseline health measurements. You likely see them already in one way or another in your bank statements, invoices and in your accounting system.
The challenge is turning that raw data into something you and your team can use to make decisions. And that’s where dashboards come into their own.
On a single screen or page, a dashboard lets you see how all the key levers that effect your business– especially those you discovered in your Business Model Canvas – are performing.
KPIs done right can give your team visibility and ownership of results without giving them access to every spreadsheet and bank statement. This visibility can be a powerful motivator.
Dashboards mean data, but don’t need to be digital
Technology helps, but it’s not the be all and end all. The most important thing is consistently communicating on the primary KPIs that affect the business. As long as it’s visible (many businesses choose to show their dashboards on a television screen) to everyone and up to date, it can quickly become the yardstick for all activities.
In fact, the American steel magnate Charles Schwab famously used this approach to turn around production in his factories by showing each shift how progress the previous shift had made. A single number, drawn in chalk on the floor at the end of each shift encouraged natural competition and pride in results.
On mining sites, it’s not unusual to see a days since last accident statistic on entry to work areas. This serves as a reminder to be professional and diligent and reinforces the value of safety.
What to show on your dashboard
What are the top 5 or 10 things that impact on the health of your business?
Here are some ideas (we actually use some in our own operation):
- Marketing Performance – How many leads and enquiries were received this week?
- Sales Performance – How many quotes turned into orders this week?
- Product/Service Quality – What percentage of products/services needed to be fixed/repaired as a result of workmanship?
- Efficiency – How long did it take to do each job, on average?
- Growth – What’s the total revenue this week compared to last week?
- Accuracy of Pipeline – How much did the final cost vary from the quoted cost, on average?
- Customer Satisfaction – How many complaints did you receive this week?
- Efficiency – What’s the delay between quote requested and quote delivered, or order placed and order shipped?
Now think about where that information currently lives, and the simplest way to access it. You’ll probably find that a few are very easy to get to and the rest take a bit more work. That’s perfectly normal. The easiest thing to do is prioritise them and add them to your list of things to get through by the end of the financial year.
Making a dashboard that works for you
If you mainly operate your business using a combination of paper, Excel spreadsheets and MYOB/XERO (or similar), you’re halfway there. The general rule is, if you can get it into a spreadsheet, anything is possible.
If you’re wanting to build a digital dashboard, we’ve prepared a list of free downloads you can use to get started with a dashboard.
- Smartsheet.com KPI Dashboard – https://d2myx53yhj7u4b.cloudfront.net/file/kpi-dashboard-template.xlsx
- Geckoboard.com KPI Dashboard Template – https://www.dropbox.com/s/eao35o9upmbws6o/SAMPLE-DATA-geckoboard-dashboard-example.xlsx?dl=1
- Chandoo.org KPI Dashboard Template – https://chandoo.org/wp/wp-content/uploads/2008/10/kpi-dashboard-revisited-ii.zip