In part 1 the danger of measuring something for the sake of it was considered. So, what should you measure and how do you decide what to measure?
Over the years people have developed systems for measuring all aspects of a business. In this blog I will point you to some which you might like to consider and in some instances, where these can be used to benchmark against other businesses, there is an added benefit.
One of the first frameworks was developed by Kaplan and Norton in the 1990’s and is called the Balanced Score Card. The BSC provides measures for a commercial business. It only considers just four dimensions, but many of the wider issues can be included in those dimensions. This short Harvard Business review Video explains the interaction of the dimensions measured.
In the digital age, it has been found there should be a stronger emphasis on how a business interacts with the community. A highly profitable business may not be sustainable, if the public suddenly decides that they consider their activities to be unethical or not in the best interests of the planet. It is interesting to see how quickly businesses respond to the public’s mood, if they are doing something which is out of favour. For example, plastic and coffee cups are big in the news now. The big chains have responded by giving discounts for anyone using a reusable cup.
One frame work which covers how a business is reacting with the community has been developed by Business in the Community. It includes the commercial aspects and the wider aspects. It also makes suggestions for the metrics in each dimension, which will save you developing specific KPI’s.
If specifically, you considered staff to be a focus area then, the Investors in People, IiP,system could be used. Many of the metric’s in this will overlap with those in the more holistic systems above, but there will be more detailed KPI’s for staff as there is a focus on those.
When setting KPI, start with the business objective and what are the biggest risk to the business and create some KPI’s so those areas are put in the spot light. As mentioned in the first blog in this series, be selective about what you measure and review the measures if they start to distort the business. By all means seek umbrella frameworks for specific areas but keep the necessity for the umbrella framework under review as the business grows, or different frameworks become available.
If you need to reset how you keep your business on track, get in touch with me, for a no obligation discussion on setting KPI’s. http://ow.ly/SyPn30j0MUY