How to work with KPI

What is a KPI

KPI - these are the key performance indicators (Key Performance Indicators). Indicators are different. Key - those that affect profit. Indicator itself can vary quite a bit, but the profit - is palpable.

For example, the owner of the Barbershop calculated that if we increase the average check barbera 100 rubles, the annual revenue will grow by 300 thousand rubles. If the costs remain at the same level, and increase profits. The average check for the Barbershop Barber - a key performance indicator.

Why KPI

KPI task - to make life easier for the head of the enterprise, business owners and employees. I introduced KPI system, when our team has grown from two people to 22. Too much time was to go to solve operational problems, it was not enough to direct his directors' duties. Thanks to the KPI, I delegated the authority and responsibility to the level of heads of departments and employees, but it nevertheless monitored.

When the use of KPI is not, the fact is that the company does not work properly with them. This was the case at the co-owners of a beauty clinic. They worked with the sales funnel, collected indicators, but did not know what to do with them next. And when figured out which metrics affect

profit and who should be responsible for each, made from unprofitable business profitable within three months.

How to work with KPI

implement KPI

The authors of management books depict the implementation of KPI as a multi-stage process: paint the company's organizational structure, financial structure, business processes. With this approach, the process threatens to drag on for at least six months. Big business it may reach. But small businesses can not afford this long headway.

But there is a simple and fast way. You will need to determine which indicators are significantly different effect on the profit and who in the company affects these parameters. Universal set of indicators no. they are unique to each business. For online sales key performance indicators - cost per click and the conversion of the site. For a call center - the duration of the operator calls.

Isolated figure, which affects the profit realized on whom he depends, and put in charge.

motivate staff

The next step - the creation of a system of motivation of staff. A popular option when an employee bonus tied to the overall results of the company or its subsidiaries, operates poorly. The employee is responsible for their own results. But how it will affect the results of colleagues? Therefore it is necessary to know what does and does what a particular slave, and link bonuses to each of its individual results.

It is necessary to take into account, directly or indirectly, an employee affects the financial result. Our team includes editors who produce content for the site. Content works for an increase in demand, but indirectly. Editorial - a cost center. Therefore tethering motivation chief editor of the profit it makes no sense. And here at the sales department of a plan by the number of calls and conversion applications in the sale. They have a direct impact on revenue.

A sign of a good KPI system of motivation - this is when in the middle of the month the employee sees as already earned and what to do to get as much as he wants.

We draw conclusions based on KPI

Employees do not always reach the target. And not always the fault of their own. When you see that something goes wrong, do not rush to shoot staff in the corridor. First understand, what is the reason. If the employee is not at fault, then we must help him to create the conditions under which he will be able to achieve the targets.

If the employee of the month to month plan does not comply and the matter is in it, we can only replace it with those who will cope. There will not save neither the charm nor good management attitude. Performance against these factors are powerless.

We spend KPI system audit

Implement and develop KPI system - that's not all. It is necessary to understand that the system you implemented - is not once and for all. always something to me in the business. With every change may require an adjustment KPI system. To this we must be prepared.

When the need to adjust the KPI system, understand which metrics are no longer relevant, what they need to be replaced and who should be responsible for the new figures. Adjust the system easier than creating from scratch.

Needs to be corrected and the system of motivation. This is best done with the involvement of employees. Each employee has a personal goal. And best of all incentives work when both you and the employee understand what he wants and needs to do for the company to realize their personal goals. If an employee wants to earn 150 thousand per month, though his salary is 75, and the rest - bonuses. So he will understand that it is worth 75 thousand, but it can make 150, if it is a successful professional.

Remember

• Understand what parameters affect the profit of the company and who influences them.
• Select key indicators are stronger than others affecting the profit and assign responsibility for them. Install 2-3 clear KPI for each division.
• Motivate employees in their key indicators.
• Keep reach whether employees targets.
• When the conditions are not met, you will be examined, what is the reason. If an employee needs help - help. If that's it - replace the other.
• Constantly audits the KPI and motivation system. Make adjustments when you realize that the system needs them.