Over the last several weeks, we have been discussing the characteristics that make up a good Key Performance Indicator. Now that we know how to create a KPI, let’s discuss collecting the data for and managing your new monitoring system.

It can be very useful in promoting company policy and getting buy-in to make sure team members see some of the data that is being gathered. This can be done in the form of a scoreboard for example. This chart or handout can show the numbers that drive business profitability-sales, Cost of Goods Sold,etc.-and the KPIs for the critical success factors in each area. Some companies even include the team’s bonus evaluation forecast based on the up-to-date KPI indicators. This can prove to be a highly motivating measurement tool.

Providing the scores and explaining the situation is one way of keeping them focused on the jobs that really need doing and encouraging them to move the KPI’s in the right direction.

Of course you may desire to do some training around this. Some team members may not be familiar with such terms as “operating efficiency”, “turnover”, or “gross margin” without some type of explanation. After they become familiar with the terms, and have the data made available to them, you can ask them to discuss ideas on improving the situation.

For more information about knowing what to do with the KPIs once developed, please contact a Simons Bitzer team member at (317) 782-3070.