How To Choose The Performance Indicators Of Your Company?

Whether an entrepreneur, executive or designer, the first concern of a business owner is to have a profitable company to sustain its business.

To do this, it is based on performance indicators that enable it to monitor and measure the proper functioning of the company (activity, prospection, quality, production process, profitability, solvency ..

MEASURE TO MAKE RELEVANT DECISIONS

The indicators of a company are much more than a tool for measuring the quality of the company’s performance. This is, for the leader, a real tool for decision support and training.

Indeed, the performance indicators that will allow him only to make decisions based on factual elements and not impression or feeling. In other words, their effectiveness is due to two complementary factors:

They help to take a step back. Since indicators are numbers, they lead to the search for causes through factual analysis. It is in this that they contribute to taking a step back and good analysis. Performance management system is used many times

They allow the manager to learn about the operation of his business and to train. Indeed, monitoring the indicators over time allows the manager to make decisions, but also to measure the effectiveness of decisions made previously. This is an excellent tool to understand how his company reacts to this or that decision (what happens when I change prices (reaction time, magnitude and nature of the reaction …).

Performance management system

To be effective, a performance indicator must be a synthesis of several important business data. It is useless to multiply the indicators in order to follow the whole activity, it would result in drowning the leader under a flood of information that is impossible and compelling to analyze. On the contrary, it is preferable to build synthetic indicators that allow global and rapid analysis.  The indicator is an alert trigger. It is only in case of slippage that the entrepreneur will ask for clarification to understand the cause of the difference

Indicators are therefore concrete and operational data that make it possible to reveal dysfunctions in order to correct them quickly. A basket or an average price, an average consumption, an overall return rate, a number of page views are more concrete and therefore more useful than a balance sheet or an income statement

LARGE TYPOLOGIES OF INDICATORS

To be easily usable, the indicators must be synthetic and clear. In other words, they must allow a quick analysis and provide “instant” information. A table of several tens of lines and several columns is in no way an indicator, it is a table to analyze. The indicator must provide immediate information, it can, for example, take the form of a traffic light a gauge, a graph …

Indicators can be grouped into 3 broad categories, alert indicators, level indicators, and anticipation indicators.

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