Top 7 KPI’s to Drive Efficiency and Profitability
Unlock business success with top profitability KPIs . Learn how to measure & optimize pipeline, revenue, labor utilization, growth, DSO & profit margin.
by Kim Koster
Gaining efficiency and being profitable are the goals of most companies. As great leaders, you have an instinct for your business and marketplace. However, it is hard to rely solely on gut feeling when looking at the financial health of your business. It is critical to also have an objective view based on data. If you are formulating an overall business strategy and want confirmation for the path chosen, that confirmation can be found in past and current financial and project data. Best-in-class companies know that using financial and project information and the resultant key performance indicators (KPIs) are the key to unlocking business strategies.
When defining KPIs, there are important questions that must be answered. What is the desired outcome? Does it matter to the organization? Can it be measured? Who can influence it? Who is responsible? How will we know we have achieved it? How often should it be reviewed? Reviewing KPIs and implementing creative ways to get information to your teams are both equally important. Bulletin boards, dashboards, or a sign in front of your office are all ways to spread information.
In a previous role, I worked for an explosives plant where safety was first and foremost. The sign in the front of the building displayed how many continuous days we had gone without a lost time accident. Every month that there was not an incident the employees got a unique bonus paid in two-dollar bills. It was great for employees but also great for the community. When the two-dollar bills were spent in the community, they knew we were keeping our employees and the town safe. Monitoring the safety within our plant was a critical KPI that our entire company was able to be a part of.
There are seven essential KPIs that should be considered as “standard” in all businesses. (Keep in mind the questions above as we discuss lucky number seven).
We hope that this review of critical KPIs gets you thinking about how to make your business more successful. Analytics tools and role-based dashboards can deliver real-time metrics directly to your device on demand Learn more here about the importance of monitoring KPIs within your own business strategy.