We seem to live in a world saturated with KPIs.

Our corporate rivers are overflowing

with them drenching everything in numbers and targets. KPIs stands for Key
Performance Indicators and most companies and government organization are
either drowning in metrics and/or are using them so badly that they are leading to
un-intended behaviors.

The other week I wrote about the 75 KPIs every manager needs to know. That list of
metrics was intended as an overview of all the good KPIs I see in use today. I
thought I made it unmistakably clear in the article that no-one should pick all 75,
but some still didnt get the message. Anyhow, my suggestion was to learn about
the 75 good ones and then select the vital few that would be most relevant and
meaningful to any given business.

With this post I want to follow on to say that there are really only 4 KPIs that every
manager needs to use. These four are the same KPIs that come out of every
workshop I run with executive from all over the world, across all different types of
industries. To get to them I create a simple exercise and say to them: You are
running this business and want to understand how well the business is performing.
You now have to select KPIs for the business and those metrics are the only
management information you can use to judge whether the business is doing well or
not. The challenge is that you have to agree on only 4 and together they should
give you a complete picture.

This, by the way, is a great exercise you can do in your own company or with your
own team and is one that sits in stark contrast to the way KPIs are usually
developed: Brainstorming what we could possibly measure and ending up in a
position where we measure everything that walks and moves and nothing that
matters!

Anyway, the four KPIs that always come out of these workshops are:

Customer Satisfaction,
Internal Process Quality,
Employee Satisfaction, and
Financial Performance Index
Here are the reasons why these KPIs are picked time and time again:

Customer Satisfaction: Its simple, without customers your organization wouldnt be

here. Any organization has customers it has to satisfy. For example: Apple, Inc. has
customers that buy their products, the FBI has customers (the American public)
whom they protects from terrorist and foreign intelligence threats, and an internal IT
or HR function has customers (their co-workers in the operational departments) to
whom they deliver services. Any business, government or not-for-profit organization
has to ensure it delivers to their customers.

Internal Process Quality: Companies need to make sure their services and products
are to the expected standards and that they optimize the way these products or
services are delivered. It doesnt matter whether you are Apple, the FBI or a shared
services function, all of them have to ensure their processes are as efficient and
effective as possible and deliver the quality their customers expect.

Employee Satisfaction: Even though my last article was about the elimination of
human jobs through the use of artificial intelligence and big data robots, we can
safely say that employees are still the most important ingredients in any business.
We all know that companies dont do well if their employees are not happy and this
again applies to all enterprises.

Financial Performance Index: Money matters to Apple as much as it matters to the

FBI or a shared services team. Apple needs to ensure it satisfies shareholders by
delivering turnover growth and healthy profits, the FBI has to demonstrate it
delivers value for money to the tax payer and the internal IT function has to ensure
it controls costs and generates efficiency savings.

So here we have it. The four KPIs every manager needs to use. But how exactly do
we know collect data on these? Ah, this brings me back to my original article about
the 75 KPIs. Apple might develop their financial performance index by combining
revenue growth with profit margins and EBITDA. The internal services team might
track customer satisfaction using the Net Promoter Score. And the FBI might
measure staff satisfaction using the Staff Advocacy Score.

Some will have spotted that these four KPIs fit neatly into the four perspectives of
the Balanced Scorecard (BSC). The point I am always making is that this means the
BSC is a very intuitive framework which might explain why it is one of the most
popular management tools in use today. However, it suffers from the same
problems as KPIs most scorecards are stuffed full with KPIs that are not relevant or
meaningful.

So if you are seeking relevant and meaningful KPIs, simply start with customer
satisfaction, internal process quality, employee satisfaction and financial
performance.

As always, please share your views and let me know what your thoughts are. Does
this make sense? Do you agree or not?

Admin KPI

WinningKPI - Admin department - KPI for general admin team posted in category Admin
department

want to measure admin team work on monthly basis, KPI is the best thing to do it,

please let me know how to start this. planning to measures

office maintenance, security services , housekeeping services, courier, tea coffee, pantr

The list of 75 KPIs includes the metrics I consider the most important and informative
and they make a good starting point for the development of a performance management
system. Before we look at the list I would like to express an important warning: Dont just
pick all 75 You don't need or indeed should have all 75 KPIs. Instead, by
understanding these 75 KPIs you will be able to pick the vital few meaningful indicators
that are relevant for your business. Finally, the KPIs should then be used (and owned)
by everyone in the business to inform decision-making (and not as mindless reporting
references or as 'carrot & stick tools').

To measure financial performance:

1. Net Profit
2. Net Profit Margin
3. Gross Profit Margin
4. Operating Profit Margin
5. EBITDA

6. Revenue Growth Rate

7. Total Shareholder Return (TSR)
8. Economic Value Added (EVA)
9. Return on Investment (ROI)
10. Return on Capital Employed (ROCE)
11. Return on Assets (ROA)
12. Return on Equity (ROE)
13. Debt-to-Equity (D/E) Ratio
14. Cash Conversion Cycle (CCC)
15. Working Capital Ratio
16. Operating Expense Ratio (OER)
17. CAPEX to Sales Ratio
18. Price Earnings Ratio (P/E Ratio)

To understand your customers:

19. Net Promoter Score (NPS)
20. Customer Retention Rate
21. Customer Satisfaction Index

22. Customer Profitability Score

23. Customer Lifetime Value
24. Customer Turnover Rate
25. Customer Engagement
26. Customer Complaints

To gauge your market and marketing efforts:

27. Market Growth Rate
28. Market Share
29. Brand Equity
30. Cost per Lead
31. Conversion Rate
32. Search Engine Rankings (by keyword) and click-through rate
33. Page Views and Bounce Rate
34. Customer Online Engagement Level
35. Online Share of Voice (OSOV)
36. Social Networking Footprint
37. Klout Score

To measure your operational performance:

38. Six Sigma Level
39. Capacity Utilisation Rate (CUR)
40. Process Waste Level
41. Order Fulfilment Cycle Time
42. Delivery In Full, On Time (DIFOT) Rate
43. Inventory Shrinkage Rate (ISR)
44. Project Schedule Variance (PSV)
45. Project Cost Variance (PCV)
46. Earned Value (EV) Metric
47. Innovation Pipeline Strength (IPS)
48. Return on Innovation Investment (ROI2)
49. Time to Market
50. First Pass Yield (FPY)
51. Rework Level
52. Quality Index
53. Overall Equipment Effectiveness (OEE)

54. Process or Machine Downtime Level

55. First Contact Resolution (FCR)

To understand your employees and their performance:

56. Human Capital Value Added (HCVA)
57. Revenue Per Employee
58. Employee Satisfaction Index
59. Employee Engagement Level
60. Staff Advocacy Score
61. Employee Churn Rate
62. Average Employee Tenure
63. Absenteeism Bradford Factor
64. 360-Degree Feedback Score
65. Salary Competitiveness Ratio (SCR)
66. Time to Hire
67. Training Return on Investment

To measure your environmental and social

sustainability performance:
68. Carbon Footprint

69. Water Footprint

70. Energy Consumption
71. Saving Levels Due to Conservation and Improvement Efforts
72. Supply Chain Miles
73. Waste Reduction Rate
74. Waste Recycling Rate
75. Product Recycling Rate
3 basic performance measures
If you are at a loss for what to start measuring, then heres what I reckon are the
absolute most important things to begin with, to establish a focus on what matters
and a habit of measuring to improve performance in what matters:
Customer Satisfaction: The average customer satisfaction rating provided by active
customers on a scale of 1 to 10, taken from a monthly or quarterly pulse survey
Rework: The total number of hours spent per week fixing or redoing things (rather
than getting it right the first time)
Cycle Time: The average time (in hours or days or whatever is appropriate) to
complete or deliver the specific outputs of your work process (weekly or monthly)