Why Embrace KPIs?
This article builds upon the concepts outlined in our ‘What makes a great KPI’ article sent earlier. Although the article implied that KPI’s align with best practices, I had an interesting conversation with a colleague over the holiday break around why KPIs should be a top priority for 2015. The conclusion of our fire-side conversation was that KPIs represent both a long-term vision, as well as a measure of short-term tactical initiatives. The following article looks at both the strategic and tactical side of ‘Why embrace KPIs’.
The Strategic Side of KPIs
KPIs are used to gauge the performance of how your strategies are being implemented and executed. As covered in our last article, a great KPI has a Measure, Common Understanding and is Actionable. The planning sessions alone can often be strategic in their focus by sequestering your senior management team to build a common understanding on the fundamental drivers and market positioning that makes your organization shine. You may want to consider an experienced 3rd party to facilitate such a lively discussion.
By definition, strategy and strategic planning involves looking at your organization with a holistic long-term view, often 3-5-10 years out, and making the high level decisions around the allocation of resources. Every business operates with a limited set of resources; thus, tradeoffs have to be made to find the right balance to support your operations, market positioning and the value that your team delivers to each customer. KPIs serve to keep a narrower view of specific tactics, keeping a scorecard on the actions and programs that are implemented to support your strategic goals.
The Tactical Side of KPIs
With Yardi and its ecosystem of products and customizations there is a wealth of data that can be captured and calculated to form the basis of your KPIs. From a short-term tactical perspective, the use of specific KPIs can help your management team use quantitative metrics and evidence to test different hypothesis (business case) related to tactical programs or efforts to improve financial results and business operations. Sometimes referred to as a “quick win” or “fast-fail” the notion of trial and experimentation accompanied with data and measureable results is a proven method for improving the performance and competitiveness of an organization.
The goal being that multiple successful small improvements will combine to generate significant improvements in the long term. By keeping projects and initiatives relatively short term it allows for lessons to be learned and tactics to be refined in instances of projects that are deemed to be under-performing (fast-fail) or allows for to tactics to be expanded upon if KPI goals are exceeded (quick win).
A Sample Strategic KPI
KPI Name: % most likely to recommend (Aka. C-SAT or Net Promoter scores)
Strategic Nature: Positive correlation between satisfied tenants and potential referral leads (Increased Sales Results) and tenant retention (Reduced Cost of Sale)
Tactical Nature: Communication of short term KPI attainment goals, accountability and action plans to further improve results: Testing different policies and methods for capturing survey results; linking results to individual or team based performance goals and compensation; publicizing KPI results internally and externally along with goals for the following reporting period.
Technical: Development of survey and survey distribution mechanisms, collection of results, calculation and reporting on survey participation rates and KPI results, update of Yardi CRM/ customer records.
Want to learn more, I can be contacted by email or by phone 1.866.517.1088 x 263.
Best Regards,
Don Robinson
President
Lynx Systems
1.866.517.1088 x 263
drobinson@lynxsystemsinc.com
