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How to Use KPIs to Improve Your Operations

Categories: KPIs & Metrics
Author: OpsDog Team

KPI Reporting and Performance Management

In our last article, we taught you how to choose relevant KPIs for improving your specific business situation. In this article, we’re going to show you how to share what you find, and how to “manage to the KPIs” — that is, really put them to work to drive ongoing improvement.

Let’s start with the reporting.

Who are you Reporting to?

Socrates said “Know thyself.” Sun Tzu said “Know thine enemy.” OpsDog says: “Know thine audience to ensure effective KPI reporting.”

The fastest way to lose your audience is to flood them with data they don’t need. So ask yourself: “What do they need? How will they use this information?” The answers will help you structure your reporting properly for each audience. Consider:

  • Executives probably don’t need to know that John Smith in Sales took three more calls this week than last week. Wouldn’t they want a bigger-picture overview?
  • A manager would care that John Smith took three more calls—it presents a golden opportunity to reward John for this positive trend.
  • Front-line staff would want to see the difference that their hard work has made. Any change in their routine and/or effort should be noticeable in their KPIs.

Hold regular update meetings. More importantly, make them simple. Everyone attending should know what metrics and data will be discussed—and that information should be readily available to them. Each meeting should end with some tangible next steps, too.

Now let’s talk about managing to KPIs.

Using KPIs & Reports to Improve Operations

In their eagerness to see results, too many executives roll out (or should we say “steamroll”?) changes without those affected knowing what’s happening, why, or where any of this came from.

So take a minute. Breathe. Explain to those affected just what KPIs are (heck, you can refer them to our KPI 101 articles if you like), what they show, and what their positive and negative drivers are. Once employees understand what’s being studied, and how they, as individuals, can help drive positive change, they’ll take ownership of the problems, instead of throwing up barriers (or throwing up, outright) in the face of mandated changes.

Here, then, are some tips:

  • Set targets based on best-demonstrated historical performance. If it had actually been achieved before, then it’s clear that it’s quite possible to do it again. Seen from the other side: If a goal is unreachable or unclear, performance can suffer. Not to mention morale.
  • Avoid subjective performance management. As we’d made clear in our discussion of qualitative vs. quantitative KPIs in our “Different Types of KPIs” article, here at OpsDog, we’re big fans of the objective, not subjective. This is especially the case when you’re trying to motivate employees to improve. When you have unbiased, measurable data to support any findings of shortcomings, employees will understand that you’re not being swayed by emotions, rumors, or gut feelings. You’ll be perceived as fair, and the KPIs will be used as true motivators.
  • Reward improvement. This may seem obvious, but note that we didn’t say, “Only reward those who hit their targets.” An employee who’s making progress toward a stated goal is also one who needs that extra recognition, reward, and motivation. Keep them on that great path upward. Let them know you see, and you care.
  • Create action plans with achievable milestones. Understanding where an employee or functional area’s performance is today, and where it should be in the future, is great. Creating a detailed action plan with observable and reachable milestones along the way is even better.

Sustained Improvement with KPIs & Reporting

KPIs are not a one-shot deal. Continuous improvement is the real goal. Now, changing a company’s culture and instilling the idea of continuous monitoring, feedback, and improvement implementation is tough. But it’s achievable. Here’s how:

  • Maintain the quality of the data and reports. Once data-collection is automated and reports get generated, it’s easy to fall into the “set it and forget it” mindset. This is dangerous. None of this is carved in stone. Data should be audited regularly for quality, and report functionality should be tested to prevent any setbacks in tracking performance.
  • Adjust reports as needed. Guess you saw this one coming. When you create your reports, try to incorporate as much feedback from the end user as possible. But don’t let it stop there. Keep pushing. Continue to ask for improvement ideas to increase usability or ease of access.
  • Frequently re-evaluate best-demonstrated performance targets, or benchmarks. “Is that the best you can do?” Last year’s answer may well get outstripped by this year’s performance (thanks, in no small part, to your KPI-driven initiatives). In other words, as change propagates throughout the organization, performance will improve. So update your definition of “best” and keep those sights aimed appropriately high.
  • Get feedback from all levels. No system is perfect. Always strive for improvement. With that in mind, seek and get feedback, issues, and concerns from front-line staff all the way up to executives. While every organization is different, one fact spans all functions and industries: No one can see how every how every change affects users both upstream and downstream. Therefore, maintain open lines of communication to promote a culture of positive change and continuous improvement.

Guess what? You’re now armed to start reporting and managing to KPIs. In other words, you’re that much closer to driving real, measurable improvements in your organization.

Want to learn more? Our next article series will make you an instant expert on the oft-discussed and more-oft-misunderstood topic of benchmarking. Check it out.

Or, of course, avail yourself—right now—to OpsDog’s rich bounty of KPIs and templates to use in your business.

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