Business Objectives and Key Performance Indicators (KPIs) are a key component within any quality management system and business plan.  These business tools can really make a big impact for small and micro businesses.  The setting of business & quality objectives & KPI’s can be a very simple process and this tips sheet aims to show you how.

What are Business Objectives and KPI’s?

Objectives can be thought of as an overall desire, outcome or goal for your business, and KPI’s are the individual or specific activities you will undertake to achieve this objective.

For example;

A business objective could well be the following:- • Objective 1 – ABC Ltd will increase our turnover by 10% by the 1st April 2016

Some KPI’s to achieve the above objective could include:-

• Increase sales activities by 12%

• Implement 90% of Marketing Plan by 1st Feb 2016

• Train All the Customer Sales Team by Dec 2015

• Reduce Expenditure by 25% by July 2015

Most business objectives could be supported by multiple KPI’s that in turn help you to meet that objective.  In its basic form the KPI’s should break the objective into measurable bite size mini objectives.

Monitoring Progress

Objectives and KPI’s have to be measurable and SMART* so that you can monitor the businesses performance to them.  For them to be measurable you will need an existing performance level or bench mark to monitor against.  For the example the following shows what the previous year’s performance was and what it should be increased by and when.

Objective 1 – ABC Ltd will increase our turnover by 10% by the 1st April 2016 (based on turnover of £250,000.00 as at 1st April 2015)

The real detail in achieving any objective will come in the individual KPI’s which should also define what the action is and how it will be done, when it should be achieved by, who will do it and how it will be monitored or what it will be bench marked against.   Monitoring can happen as frequently as you feel is relevant to the objective but we suggest no less frequently than annually but recommend at least quarterly.

*specific, measurable, achievable, realistic and time limited

Recording Them

Objectives can be as simple or as complicated as you want to make them but there is always value in keeping things as simple and easily understandable as possible.  We always suggest that you should record your objectives and KPI’s but again this does not have to be overly complicated.  A simple table recording the Objective with columns for; key performance indicator title, how it will be implemented, who will do it and when it will be done by is a great place to start

Anything Else?

• Consultant & engage with employees when setting Objectives and KPIs.

• Let employees and relevant stakeholders know how you are doing in relation to achieving your objectives.

• Include business objectives and KPI’s in employee appraisals or performance reviews.

 

If you would like any more information please get in contact here