Part of infrastructure optimization is developing the right Key Performance Indicators (KPIs) for your company or department. On the face of it, this might seem easy. You might think you’ll determine where you want to be, break down the steps you need to take to get there, break those steps down to KPIs, and you’re all done.
Sorry, nothing is ever that easy.
There is much work that must go into developing the right KPIs for your company.
When you are developing KPIs, they have to have several characteristics to be effective. KPIs must be:
Have an objective
There is one more thing they need to be, and you won’t often hear about it: they must be compatible with your company culture and core values.
Compatibility and Your KPIs
Your key performance indicators are a reflection of your company’s processes and their success, at least they should be. When you develop how you are going to measure your progress, they should also reflect your company’s unique business processes. After all, what might be a success for your competitor doesn’t mean it would be the same for you.
For example, if one of your core values is excellent customer service with a “to the ends of the earth” vibe, you must let your KPI’s for things like distribution, returns, and customer service resources reflect that value. Did all of those departments meet their goal for customer service and interaction?
If you see a lot of returns, is it because you have a defective product? Are shipments arriving damaged or partially filled? Or, are you attracting more customers and driving up the numbers based on the volume of orders?
Likewise, if you want your customer service reps on the phone with customers for a specific amount of time, and you enforce this measure, does it work with your core values about customer service?
Begin Where You Are
True infrastructure optimization can only be achieved when a company works with what they have at the time they are trying to improve things.
To add new resources as you measure your processes is only going to muddy the waters. You aren’t going to know if the changes came about because of the way things are now, or because of the new resources you poured into your company.
So, what are the steps to take when developing your KPIs?
First, carefully develop them within the framework of your core values and company culture. Then don’t change anything until you do your first review, this is the only way you will be able to see how things are working at your company.
Finally, when you do make changes, conduct another round of KPI development and study. It’s an ongoing process, but constant review and revision is the key to being successful in the long term.
Infrastructure optimization is one of the core pillars Equal Parts Consulting uses to help businesses navigate both their internal workings and their markets. We help you achieve optimal execution with your on-hand resources and identify those areas where you can’t seem to make any headway.