The 5 criteria for a successful KPI…

Do statistics help achieve goals?

In sport many would say yes, statistics can help achieve goals. Yet, in the business world it is very much up for argument. One thing for sure is that statistics can, if reported correctly, give a great snapshot of past and present positions of a business. Statistics can then go on to help forecast, budget and create targets for a business to achieve.

Statistics are a good way of measuring operational processes that a business may come across. However there are disadvantages regarding focusing on statistics for a business. The data is often difficult timely to collect and needs to be collected frequently in order to give a more accurate image of the position of the company. Data alone does not give an explanation of external factors for fluctuations of poor figures.  It can also be hard to compare statistics between two companies; therefore the statistics can sometimes be isolated to the company in question only.

Some statistics can be referred to as Key Performance Indicators (KPIs), this is a measure of performance and can help understand the position of a company on many different levels. KPIs are generally non financial and focus on the operations of a business. For example in retail it could be the amount of footfall in a shop, or in healthcare it could be the waiting times for patients.

The indicators can show a positive side of the company such as the amount of compliments received or negative such as the amount of contract breeches occurred.  KPIs can cover many different areas of a business depending what the industry may be, these can include HR measure, customer satisfaction and operational bespoke targets created.

In order to create reliable and efficient KPIs there is an easy process to follow. SMART, specific, measurable, achievable, relevant and timely.

Specific relates to the indicators being individual and appropriate for the individual case. Measurable means that the indicator must be able to be measure.

Achievable means that the targets must be realistic and possible to meet.

Relevant must show that the employees understand then and that they have a meaning.

Timely, this means that the indicators must have an appropriate time frame to be met.

If every set of KPIs and statistics follow these five criteria, they are going to produce a set of useful figures and help improve the performance of a company.