Successes—and also failures—should be measurable, because only in this way can a company assess whether a business is successful or not. But in order to measure success, success itself must first be defined.
Small businesses can typically recognize at a glance if their business is running well. They can use less visible indicators to make a correct assessment: they can see how much money is in the account at the end of the month, how many invoices have been issued, how many offers have been written, how many customers have been acquired.
In large companies and groups, on the other hand, measurability is often complex. Various key figures are used to measure the performance of a company or a project. Further digital metrics come when increasing digitalization of the business—often old and new worlds collide here. Countless values can be measured with analytic tools and sophisticated business intelligence systems, but only a few say anything about the actual performance: Not all figures are suitable as KPIs!
Therefore, companies should first be clear about which results, goals and achievements they actually want to measure.
Here it is essential to think carefully about which measurable values actually assess the company‘s success, and which are meaningful, before turning to the indicator system. This prevents overloaded reports with too many indicators, from causing confusion and ambiguity, leaving the essential components unrecognizable.
In principle, we, therefore, rely on agile corporate management with lean key performance indicators. A few, well-selected key performance indicators deliver more and are easier to handle than reporting too many metrics. To develop these KPIs, it is best to find answers to the following questions in a moderated workshop:
What are our most important goals?
Which indicators reflect the achievement of these goals?
Which of these have the highest significance for our corporate success?
In the course of digital transformation, digital indicators should also be derived from the goals and integrated into the existing target and incentive systems. When the KPIs are tailored to the business model, opportunities and risks can be identified at a glance and undesirable developments can be corrected quickly.