Key performance indicators (KPI) boards are a measurable way to see if your business is meeting goals.
Most people agree that measuring successes and shortcomings is a fundamental part of reaching your objectives, but the way you translate the information is equally important.
Imagine this - you’re keeping score for your son's little league team. All the bases are loaded and the most valuable player is up to bat. You think it’s a sure win for the team. But after the first swing, you have your doubts. After three strikes the player is out of the game and the team loses by the skin of their teeth. Would you throw your clipboard on the floor and storm out because they missed the win? Or would you encourage them and show them how close they were to winning the game.
With Key Performance Indicators (KPI), you can gauge how your business or team is performing against its strategic goals. KPI boards let you show them, instead of telling them how they’re performing and provides a focus for the entire team or business.
A good KPI should act as key decision-making tools.
Show how effective your key business objectives are with KPI boards designed to create structure. With KPIs, you can highlight common goals, which help you achieve strategic goals.
Many organizations use different types of KPI boards to measure their successes, based on specific targets.
KPI boards can help you track:
1) Inventory – Track and maintain the level of inventory. When inventory isn’t managed you can end up with overstock and ongoing costs. Communicate common goals your entire business is working towards to keep inventory at a manageable level.
2) Shipping – Track and monitor how many packages have shipped out of your building on specific days, weeks, and months to see if your shipping team is reaching goals. If goals can’t be met, it’s time to make modifications to your shipping processes so more items can ship out on time.
3) Sales – Choose a tracking metric that works for you – something like lead flow, qualified opportunities, conversion rates, or booked revenue – and measure how individual sales team members are doing or track the entire progress of your sales force. Periodically assessing the progress of your sales will help you motivate your team to meet personal or group goals.
4) Production – Track the number of items pulled through your production floor and set goals. Seven common production KPIs are: count, reject ratio, rate, target, takt time, overall equipment effectiveness (OEE), and downtime.
5) Performance Status - This KPI will provide measurable data that shows the progress of a company’s business goals and how they’re doing collectively. With a performance status KPI your entire company will understand the goal so your business can strive to meet it.
How to create an effective KPI board:
There isn’t one specific design to track key business objectives – what works for one company, might not work for another. KPIs are closely linked to strategic objectives. KPIs assist in answering the most critical business questions while echoing the main goal – to aim for success!