Key Performance Indicators (KPIs) are a widely known tool to measure and evaluate organisational success. The acronym became a buzzword in business long ago, and the concept is utilised in management across multiple industries. However, the question needs to be asked…

How effective are KPIs in driving operational success in today’s customer-focused business environment?

KPIs have traditionally been given to individuals and departments without much thought about how these indicators contribute to the business’s goals and, ultimately, the value to the customer. [1] When teams and individuals strive toward different goals, it can cause operational complexity. Quite often, the customer-focused goal is abandoned in an attempt to meet highly specific individual measures of performance. [2]

For example, a sales team might have a KPI to increase revenue, while the production team focuses on reducing inventory. However, customer outcomes are achieved when departments work together to ensure inventory efficiently supports revenue growth. This example shows that cross-functional processes are needed to achieve organisational and customer goals.

So rather than focus on key performance indicators, should we shift our mindset and measure…

Key Process Indicators?

As we help cross-functional teams manage and measure processes, we remove operational complexity and ensure that the organisation is working efficiently to satisfy the customer. Processes are critical to delivering value to customers, so by measuring key process indicators, we can genuinely analyse organisational performance in achieving customer-focused goals.

In addition, when measuring process performance, it is easier to create real-time feedback that allows an organisation to make decisions promptly instead of traditional KPI’s that may take weeks or months to measure its effect.

Business owners and managers, need to establish critical indicators for business success. Choosing the right indicator is crucial to ensure performance feedback aligns with what we want staff to achieve.

Contact us to discuss how implementing key process indicators can simplify your business.

[1] https://hbr.org/2020/09/what-are-your-kpis-really-measuring

[2] https://www.forbes.com/sites/stevedenning/2021/02/15/why-kpis-dont-work-and-how-to-fix-them/?sh=381aecc01a20