Effective company key performance indicators (KPIs) guide a business on the journey towards its strategic goals. A good KPI should act as a compass: a measurement of where your business is, relative to where it has come from and where it is going. KPIs translate your business strategy into manageable, operational actions, based on the data you collect and monitor. They are an important component of the information needed to understand a company’s progress.
However, many business owners aren’t leveraging the power that comes from understanding their performance data. Failing to invest in compiling accurate business data, beyond the usual financial statements and reports, means business owners will continue to rely on “gut feelings” and assumptions when it comes to making decisions. But there is no substitute for concrete numbers when it comes to measuring the health and understanding the direction of your business.