Peter Drucker’s famous quote,“What gets measured, gets managed,” is especially timely in today’s difficult economic climate.
Today we are going to talk about the dashboard of your factory: the cockpit of the airplane, the compass for safe navigation…. the Key Performance Indicators (KPIs).
There is often confusion about its use. But if used properly, they are a powerful tool that can help SMEs achieve steady profitable growth.
Unfortunately, KPIs are often seen as just a measure of employee efficiency.
The standard five KPIs are usually…
- Revenue growth
- Revenue per customer
- Profit margins
- Customer retention
- Customer Satisfaction
While these facts are essential to know as a guideline, they often do not provide insight into what is really going on underlying. The most standard KPIs tend to be those over which the employee has little direct control. But tries to control them with this.
Well intended. But the opposite is achieved. leads to the behavior that is contrary to achieving goals, resulting in poor morale and a demotivated team.
In my opinion, KPIs should be a source of motivation and a predictor of the future, not just a measure of the past. They must engage the team in the things that matter to them, but also provide insight into what is going well and how it can be continuously improved.
So, the next time you want to set up KPIs, remember that they can also stand for…
- Keep People Inspired
- Keep People Interested
- Keep People Informed
- Keep People Involved.
The right indicators with the things that are important to staff, customers and specific goals set by the company.
For example, consider the 5 basic KPIs from above, supplemented by trends in improvements in lead times, how the process stabilizes, employee enthusiasm and resolved improvement suggestions (yes all of this you can measure).
Which KPI matters most to you? And how do you measure this? Click “reply” and let me know.
Want to get started with a dashboard for your factory? Let’s talk.
