What Are Your Key Performance Indicators?

by Ruth D Schwartz

Creating key performance indicators (KPIs) in your business and then taking those KPIs to create a dashboard gives you an “At a Glance” driving record. Sit in the driver’s seat and watch that dashboard. Why? Because it can streamline your business and make your employees smarter. My recommendation is that everybody in your business should have a dashboard and that everybody should be aware of each other’s key performance indicators.

Let’s look at a situation using a small bookkeeping company as an example.

The owner of the company already has an idea of what her key performance indicators are in terms of the critical financial measurements. Those numbers included total billable hours-critical for everybody in business. So she put on her dashboard to watch everyone’s billable hours, and everybody else put their billable hours on their own dashboards as well.

From there it starts to get more interesting. All five members of the team (including the owner) now has to consider what they are personally counting-what I refer to as the “metronome,” the beat of your day.

It’s natural that when the owner of a business starts thinking about everybody’s key performance indicators, they tend to think in terms of accountabilities. It can take some time to step away from the accountabilities and let each person identify the metronome of their day, their week, their month.

One of the staff decided to count her days based on how many clients she had to go out and pick up materials for, and how many times the bookkeepers gave her deposits to run to the bank. She even counted how much time she spent doing miscellaneous chores in the office.

One of the key accountants at the office decided to count how many e-mails are in her inbox, because she tends to fall behind or ahead based on how many she manages to answer or get responses for. She also counted the filing of her e-mails. She also looked at all the monthly deadlines that had to happen for each one of her clients. She started to think about how much time it took to complete a task (time per task). And since she is in charge of reviewing clients, she counted client reviews.

Another staff member who has to take in a lot of customer data had a pile of bills, a pile of deposits, a pile of invoices, and so she tracked her day by the piles going up and down. She was a little bit frustrated by how many times she had to ask her client a question in order to accomplish something, how many touches it took; therefore, client contact went on her dashboard.

A new bookkeeper trying to learn the ropes counted the time being sent out to other people’s offices as the metronome of her day as well as learning the client needs, time spent on location, and accuracy of work, which was measured in feedback (how many times did they have to tell her how to do it right?).

Let’s go back to the business owner, who needs to see some of the dashboard items that were on everybody’s dashboard, like billable hours. She also has some cash flow that she keeps track of, so that goes on her dashboard. She’s concerned about regular staff training, so she keeps a calendar of when she works with people on their training. She counted her client reviews which were also feeding into her training calendar. And she counted her staffing to client ratio.

When you go through this process, like our bookkeepers in this example, your staff will more than likely have a better understanding of the impact they have on the business and which KPIs they actually count. With this knowledge they can start to move the needle in your business, and you, the business owner, won’t be responsible for standing over them and motivating them to move the needle. Employees who know what they are counting move the needle themselves. That is the power of opening the books.

When you run an open-book business you benefit from having engaged employees and self-managing, teams empowered with their own success. You experience more freedom in your business.

About the author

Get more information about Open-Book Management and how it can help you to create more freedom for yourself and everyone in YOUR business here: http://highperformanceadvocates.com/what-is-open-book-management