Rhythm Blog | KPIs & Dashboards

Written by Cindy Praeger and Eskinder Assefa

A fairly significant body of research now clearly shows that the reason why a number of mid-to-large companies face is not because their strategies were not sound, but because they were unable create a culture of strategy execution to perform well on those otherwise sound strategies.

Because Rhythm strategy execution software acts as a framework for pulling together into one single system many improvement initiatives and management tools that are popular among manufacturing companies, many of our most successful clients come from the manufacturing industry. One area that our clients come to us for help with is determining the right manufacturing KPIs (Key Performance Indicators) for their manufacturing metrics dashboard to drive performance.  Some production managers are not sure where to start, and many are measuring so many things that their manufacturing metrics are just noise, not driving action or change to drive your operating efficiency.

Manufacturing KPI Examples

It is important to grow the top line of your business on an annual basis, but you also need to make sure the bottom line is healthy which can help fund that growth. This is particularly important if you are a manufacturing company and need to be efficient in your production process. In most cases, the two biggest expenses in your manufacturing business are labor and raw materials. There are exceptions, of course, in machine intensive automated manufacturing environments, but let’s focus on the former. So how can we make sure the production line is running at peak performance? One very effective way is to put the right balance of production KPIs in place. Some of these are leading indicator KPIs that help provide insight into future performance and some are results KPIs that tell you how you have done. It is good to have both, although I always prefer giving my production managers a good set of leading indicator KPIs as these drive the results.

Here are some of my favorite KPIs and metrics that I used when I ran or set up manufacturing companies.

Mergers and Acquisitions (M&A) are not for the faint of heart. Any CEO who has navigated those waters will tell you it is a tremendous challenge to blend cultures, systems, processes and teams successfully. The statistic is 70-90% of M&A's fail -- that's a scary number! Instead of focusing on that metric, let's talk about numbers we should be measuring around M&A.

Every acquisition deal starts with an incredible amount of due diligence. Are the cultures and values compatible? Do the product lines and customer bases support each other? Do the numbers work and take us down a path of growth? Ultimately, if the deal goes through, benefits have been seen by both parties. Now, it's up to the newly-merged company to both preserve the current value of the organization and meet growth projections. It's a delicate balance.  

It is no secret that your people are instrumental to the success of your business. In order to have a great company, you not only have to hire the right people and get them in the right seats as Jim Collins says, you also have to work to retain and engage those people once you have them.  The best companies use key performance indicators for employees to make sure that they are getting the most out of their most important investment - their employees.

It can be intimidating to sit down to a blank slate and begin working on your company’s first official KPI dashboard! Over the years, I’ve worked with hundreds of technology and software companies doing just that - beginning their KPI journey in Rhythm. So how do you get started?

First, it’s helpful to think of your business in terms of 4 key areas: Employees, Customers, Processes and Revenue. In order to have a clear high-level view of the health of your company, you should have visibility on all four areas. What can you measure to give you the proper insights on the health of your employees, customers, processes and revenue?  

If you are still stuck, we’ve compiled the ultimate KPI cheat sheet for software companies! Below are some of the most common KPIs we’ve seen from technology companies using Rhythm for each of the 4 key areas:

As the middle market strategy execution experts, we get asked a lot of questions about KPIs or Key Performance Indicators for firms to manage the metrics that matter. In fact, we get hundreds of thousands of yearly views on our KPI blog posts alone! Our comprehensive KPI Guide is one of the most valuable free resources that we offer to the middle market community free of charge to help companies determine the right set of KPIs for their business if they don’t have the resources to utilize our expertise and KPI dashboard software to create a balanced scorecard of their performance.

As a general rule, CEOs need easy access to a few key performance indicators—they need a CEO KPI  dashboard that allows them, at a glance, to monitor how healthy the business is at a given point in time. With all the data you can have at your fingertips these days with mobile and tablets, it would be easy to go blind trying to interpret too many KPIs at once. And, it can be frustrating to be blindsided by problems or missed numbers when you don’t have the right data easily accessible. It’s imperative to identify a handful of metrics that you need to see daily or weekly. According to an article in Inc, "For busy CEOs, the KPIs you monitor should tell a quick story and give you insight into both external and internal trends."