KPIs are not just about finance: How to use them to improve your firm

Success ElevatorKPIs are important and play a large part in those firms who grow successfully. Why then  do many other professionals find them boring, irrelevant or worry about them taking too much time to measure?

KPIs can help improve your firm’s performance and progress towards your firm’s  goals, that implies they are not all about finance. If your KPIs are all financial results, you are wasting time, so STOP.  Scroll to the bottom of this page if you want to watch a video of this article instead.

Why would I measure non financials in my KPIs?

Measuring how well you’re doing will help you to improve performance. It will help focus efforts and communicate your priorities (to you and your team).

What are non financial KPIs?

They are measures (that should be easy to measure)  that help you achieve your ambition for your firm. Therefore they depend on your strategic priorities and will change over time.

A distinction between KPIs and things you measure / look at periodically.

  • KPIs - think about the car dashboard when you're speedingI’m driving my car along the motorway. I see a police car and as a reflex look at the speedometer – it’s OK I’m only doing 70. Essential, quick to check but not of strategic relevance to me.
  • I’m nearly late to get to a dive boat (yes I like scuba diving). It’s essential that my journey is as fast as possible, so looking at the speedo to ensure I’m still doing 70 is of strategic relevance. It could be a KPI I regularly check to ensure I meet my goal (board the boat before it sails).
  • My mechanic might like to know the temperature of the oil in each of the cylinders is, but that’s not easy to measure and isn’t essential to me as I drive.

What is your journey about?

You may like to read “why so many people get KPIs wrong, wasting their time and getting no results”. This article is about KPIs on your journey.

Non financial examples of KPIs.

Here are some examples of KPIs. You’ll also enjoy downloading  ”Improving performance, using KPIs and not destroying my firm’s culture”, it's free and waiting for you. Click here for instant access (email address required).

Client care: You’re trying to align your team around improving client care. What you measure depends on what you do, but maybe:

  • Number of complaints
  • Number of calls resolved within a certain time
  • the number of damaged or faulty goods returned
  • average order-fulfillment times
  • time taken from order to delivery
  • unpicked orders at the end of each day

 Sales development

  • Number of add on sales
  • Value of average sale
  • Sales conversion rate
  • Sales conversion at different points of the sales pipeline
  • Marketing effectiveness
  • Leads generated
  • Website activity (not just visits)
  • Website activity that came wanting something specific (yes you can measure this)
  • Social media ROI (a little more difficult, but can be done. Click Social media measurement if you’re interested)

Leadership effectiveness: Is it important to you that you’re developing talent in your team?

  • Productivity rates (boring and traditional, but useful?)
  • Delegation effectiveness
  • Staff doing different roles
  • Team performance and happiness (yes, but probably not a KPI as it’s hard to measure?)
  • Staff performance discussions completed effectively (hard to measure “effective” part, so be careful it doesn’t become box ticking)

You might also think about geography, market development, dependence on income from certain sources (maybe you don’t like having all your eggs in one basket). There is a of measures you could use, depending what you are trying to achieve.

The purpose of measuring is to know where you are, and how to alter things.

They are also extremely good at keeping your team focused on what’s important. Do you use them in your team meetings? (Click to read about better team meetings)

A KPI or just something I measure?

The purpose of it being a KPI rather than just a measure (performance indicator) is that you need to look at it often. So it’s critically important and knowing it is can change your actions (like the speedometer in the car).

In a series about a local award winning company “secret-5-of-5-measure-it-to-increase-sales” Stewart Peart of Applied IT talked about how he uses KPIs

Download  ”Improving performance, using KPIs and not destroying my firm’s culture”, it's free and waiting for you. Click here for instant access (email address required).

What do you measure and what change in results do you get from doing so?

Author Credit:
Written by Jon Baker The 5-50 Coach. I help professionals grow their firms from 5 to 50 employees, sustainably, profitably and still have fun. Have you got your "next step kitbag yet"? It's stuffed with guides, reports & templates helping you grow from 5 to 50 employees Click here for immediate access.

Car Photo used under creative commons licence. For more information, click here.

Comments

  1. jonbaker says

    Hi Graham,
    I think that’s a really good acronym and puts the focus on what is really happening (or should be). These are indicators about important things in the firm and everybody should be interested in them. They shouldn’t be some obscure financial numbers that most don’t really understand.

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