Performance management is a powerful management tool when it effectively focuses on things that will improve your overall business success. This requires focusing on the key business drivers for your business and sector. They must be objective and can be measured and verified.
Measurements need to be quantifiable. Units per hour, returns, complaints, date of delivery can all be dissected into numbers that can be compared over a determined period of time. When these measures account for past activities, they are referred to as “lagging.”
Once you have identified what in your business needs to be studied, “leading measures” look at future performance, and is what one uses to assess if the implemented strategies are effective or need to be adjusted. Careful study of leading measures, can also gives clues as to where specifically an improvement can be made in order for your company to achieve optimal growth.
Here are four perspectives you need to measure for healthy growth:
- The internal business perspective — The need to focus on the internal processes to insure customer satisfaction and find where they need to excel
- The customer perspective — The need for customer satisfaction and to understand how customers view the company.
- The innovation and learning perspective — The need to create a climate in a company that is conducive to organizational change, growth, and innovation.
- Financial perspective — The need to focus on profitability, market share, and risk from a shareholder’s view.
Measuring your business is an ongoing examination, which is beneficial to growing healthy and making strides past the competition.