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 plants, 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 manufacturing metrics drive the results.
After recently reviewing thousand of Annual Plans and Quarterly Plans, I can say without a doubt that improving employee engagement seems to be top of mind for everyone this year. How on earth do you keep today's dynamic and diverse employees happy, engaged and productive? It's the million dollar question that we ask ourselves year after year.
According to Gallup, companies with highly engaged workforces outperform their peers by 147%. Gallup also concluded that 87% of employees worldwide are not engaged. So, how do you know if your company is on the right side of those statistics? You need to start measuring employee engagement KPIs this quarter so that you can keep your A Players and reduce employee turnover. This is not just a function for the human resources department, the best team managers measure employee satisfaction KPIs on their teams.
As a training and on-boarding expert at Rhythm Systems, I know a lot about KPIs. Recently, I’ve also learned a lot about OKRs. Many of my newer clients have come to us for a systematic way to implement their OKRs. As I help these clients map their goals into our software, I’ve been thinking a lot about whether the KPIs I know and love have a place in this world of Objectives and Key Results. I’ve come to the conclusion that while KPIs and OKRs are different, there’s a clear benefit to having both. They are both instrumental in goal setting and performance management.
Businesses looking to implement goal setting best practices are often drowning in a sea of acronyms that can be hard to navigate. What’s better - MBOs or OKRs? Where do KPIs fit in? Should I have SMART goals or stretch goals or something else? There are lots of tools and frameworks and different acronyms out there, but there are some key elements of effective goal-setting that underlie all of the most effective business and performance management goals.
First, let’s clarify the terminology a little bit. I’ll give a brief explanation of what MBOs, OKRs, and KPIs are and what the pros and cons may be for each.
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 (BSC) of their performance.
Many planning tools are used on an annual basis—yet, they are often overlooked in the middle of a pandemic like COVID-19. There is an opportunity, now more than ever, in your team's need for direction, a way to focus their action and a bumper rail to keep them moving forward. This will allow you to harness the energy of your team rather than sinking in the quicksand of panic.
Many executives have heard of SWOT but aren’t familiar with how to leverage it for their business plan, much less how to utilize it in a time of crisis. Every business I work with has seen affects from the pandemic—either positive or negative. Let’s look at how to utilize the SWOT approach for either effect by making it a cSWOT (Crisis SWOT). A SWOT analysis about covid 19 is key to establishing a healthy decision-making capability and communication rhythm in your company during trying times.
Measuring the right Key Performance Indicators (KPIs) is vital to the health and success of your business. However, when we onboard new clients, we find that some of them are uncertain about what they should be measuring and how they can use these powerful tools. They often ask "Why do we need KPIs?" or "Why use KPIs?" or "Why are KPIs important" as they think their way of doing things isn't broken. Effective KPIs are important metrics to make sure that you can accomplish any business objective.
According to a recent article I read in Harvard Business Review, "most employees want to be productive, but the organization too often gets in their way. Our research indicates that the average company loses more than 20% of its productive capacity — more than a day each week — to what we call 'organizational drag,' the structures and processes that consume valuable time and prevent people from getting things done." What productivity KPIs (Key Performance Indicators) and metrics can we measure employee performance, employee satisfaction and employee engagement?
The article continued to say that "people have huge amounts of discretionary energy that they could devote to their work, but many are not sufficiently inspired to do so. Virtually every employee can bring more to their job, but many don’t invest the additional ingenuity and creativity that they could to improve productivity. Inspired employees bring more discretionary energy to their work every day. As a result, they are 125% more productive than an employee who is merely satisfied. Stated differently, one inspired employee can produce as much as 2.25 satisfied employees."
Wow! I was stunned by this data!
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. Having the right set of quality metrics can greatly improve your performance management in creating a high-performing team.