Working with targets and key performance indicators is a way of knowing how your business is developing and whether you have a well-functioning business model. This guide is about assessing whether your business is developing in a desirable direction or whether the focus is in practice on things that do not contribute to the set objectives.
Key performance indicators contribute to goal achievement, can be expressed in a variety of ways and vary according to the objectives and targets you have set and the type of activities you carry out. Some examples based on the sale of goods and services in a shop, restaurant or similar may include:
- Net profit
- Gross profit
- Customer loyalty
- Sales per square metre
- Turnover per employee
- Number of customers or visitors
- Conversion on completed marketing
- Marketing activities carried out according to plan
By setting clear targets and key performance indicators, you increase the transparency of your business. There are many benefits to doing so. Aside from increased structure, it can, among other things, help employees feel more engaged and also avoid feeling sidelined and withheld information.
Reflection exercises: objectives and key figures
The examples of ratios presented above are based on trade in a physical shop, restaurant or similar. Now start from your business and your objectives.
- Have you formulated clear objectives and are they anchored among all of you working in your company?
- If not, why not and what can you do to increase transparency so that everyone has a common understanding of the company's objectives?
- For those of you who answered that you already have clearly formulated objectives, have they evolved and adapted to the past year and the conditions brought about by the pandemic? How and why? Or, why not?
- Have you formulated key performance indicators, if so what are they and are they anchored in the company?
- How do you monitor the key performance indicators? How often and in what way?
Finally, do you feel that the follow-up work could be developed and anchored more clearly? If so, how do you propose to structure the work over the next six months? If you wish, write down your proposal now so that it can be discussed and anchored in the company.
