Custom Designing a KPI Program

In today’s world of “Big Data,” there is an ever-growing capacity for measurement. The challenge for company managers is to decide which measures matter. What are the measurements that generate the highest leverage of your company’s competitive position? 

A Value Proposition defines a company’s position in the market relative to its competition. For managers, their top priority is leveraging their company’s Value Proposition. Accordingly, the first step in designing a KPI program is determining the KPIs that drive your Value Proposition.  

Value Propositions are not likely to change in the short term unless there is a significant change in circumstances. If a change is required, your KPIs will need to be adapted to leverage the new Value Proposition. 

The second step in establishing a company’s KPI program is designing the KPIs related to the company’s marketing mix strategy. Marketing Mix strategy, like a Value Proposition, is not likely to change over time. There can be competitive situations where a company needs to change its Marketing Mix strategy. If this is the case, the related KPIs will need to be adapted. 

The third step in KPI design is identifying those KPIs that accelerate the turnover of a company’s Financial Ratios. In many cases, the KPIs that drive a Value Proposition and Marketing Mix strategy will also accelerate Financial Ratio turnover. If a Financial Ratio is stuck in the mud, managers will need to establish KPIs to free things up. 

OKRs vs. KPIs 

Objectives & Key Results (OKRs) are temporary programs, whereas KPIs are used from one day to the next. Some OKRs, once achieved, may result in a new program that a company wants to run in the future. In this case, a KPI will likely be needed to manage the new program. 

The last step in designing KPIs is to ensure that individuals who perform solo job functions have their own KPIs. Teams responsible for processes have their KPIs, and departments with individual roles and team roles have their KPIs. It is essential that when it comes to handing out KPIs that no one is left out. 

At Rise CPA, we draw on our 40 years of experience to help identify your High Leverage policies. We can Custom Design your KPI program to achieve your Absolute Financial performance. Call us to kick start your KPI program. 

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