Improvement Report

These enable a business to assess its key results. The measurements used are analogous to the dashboard of a car. The instruments give you measurements - speed, distance travelled, fuel-level, revs, engine temperature etc.

But this is just raw data. KPIs turn that data into business intelligence. Using Key Performance Indicators is rather like having a map-reader in the car. He or she uses the information provided by the instruments to plot the direction and speed needed to reach the required destination.

How should you use Key Performance Indicators?

Both external and internal KPIs should be taken into account when measuring performance.

External KPIs relate to outcomes - did we get the results we wanted?

Internal KPIs refer to processes - are we doing the right things to get the results we want?

Measuring Key Results

Many businesses don't use Key Performance Indicators properly. They put in place measures that tell them what has happened, not what is happening.

The choice of measures is important, to keep a business on track, and as such should be easily maintained and acted upon. Many businesses generate mounds of information but then don't use the knowledge it provides!

Review Progress

One of the best ways to use indicators is to incorporate them into business activities you currently undertake. In addition, ensure that the collection of data used to generate KPIs is effective and efficient.

Building the review of Key Performance Indicators into a daily team briefing or weekly management meeting is more effective than periodic summits.

The important thing here is appropriateness of measures used. Measuring something just because everyone else does is not always the most sensible approach.