It’s true that if you want to excel at something, measure it.

Metrics. Why you Need Them

Our lives are filled with measurement. Why? Because that is how we stay on track or get back on track. It’s true that if you want to excel at something, measure it.

In business, there are Key Result Indicators and Key Performance Indicators. What’s the difference?

What are Key Result Indicators?

Key Results Indicators can be financial or non-financial. They are reported regularly on a predetermined schedule (i.e. quarterly). They are not tied to a specific activity or team. They show results only and are retroactively assessed.

Profits, customer complaints, and leads may be results indicators.

What are Key Performance Indicators?

Key Performance Indicators are nonfinancial. They are reported regularly on a predetermined schedule but are best if reported often. They focus on a single activity that is the responsibility of a specific team. They point to immediate action that is required.

Time from referral to appointment, repeat customers by service provider, and wait times may be performance indicators.

The Relationship Between Performance and Results

Performance indicators steer results, that is why performance indicators should be monitored closely before results are impacted.

Here is a practical example: You are going on a road trip. The desired results are taking a cost-effective trip and arriving at your destination on time. The performance indicators are your GPS (map and routes) and the things on your dashboard. How fast are you going? How is your fuel consumption? Are you making good time? So, to achieve your result (cost effective, arriving on time) you need to gauge how you are performing (speed, stops, etc.).

Implementing Metrics in Business

In business it is best to track results and performance by department or division. Sales, operations, service provider, outcomes, administration, etc.

Questions to Consider

1.      What are the key results areas of my business? By department?

2.      What the corresponding performance indicators for these results?

3.      Can I delegate the compiling of results and performance indicators to someone?

4.      What can we use as a dashboard for these?

5.      Who can report on these?

Want to learn more? Let’s connect.

Adapted from “Clarity 1.2 Know Thy Business” by FocalPoint Coaching and Training Excellence, Copyright 2018, by Brian Tracy and Campbell Fraser. Reprinted with permission.