One of the greatest business tools you can have is a well-constructed performance indicator report that gives clarity around what’s working or not working.
In your Management or Board Meeting it’s the tool that allows you to continually improve all aspects of the business. You have to measure the critical business indicators regularly in order to improve them.
Ideally the business should have a number of KPI’s that measure the drivers (activity) of business success (lead KPI’s) as well as measuring the outcome (lag KPI’s). Identifying what to measure and how often is all important. There are a plethora of activities or outcomes in business that could be measured. The key question to ask is ‘will the KPI allow us to continually improve the business through better strategy development or decision making’. If the answer to this is no, then that activity or outcome may be nice to know, but may add little value to the board or management team.
I use a tailored KPI report template that allows analysis of data across all functions and across a financial year. This yearly view provides visibility of performance against targets, visibility of trends against previous months and years, and allows directors or management to monitor and measure improvement initiatives, or identify warning signs regarding future performance.