We seem to live in a world saturated with KPIs. Our corporate rivers are overflowing with them drenching everything in numbers and targets. KPIs stands for Key Performance Indicators and most companies and government organization are either drowning in metrics and/or are using them so badly that they are leading to un-intended behaviors.

The other week I wrote about the 75 KPIs every manager needs to know. That list of metrics was intended as an overview of all the good KPIs I see in use today. I thought I made it unmistakably clear in the article that no-one should pick all 75, but some still didnt get the message. Anyhow, my suggestion was to learn about the 75 good ones and then select the vital few that would be most relevant and meaningful to any given business.

With this post I want to follow on to say that there are really only 4 KPIs that every manager needs to use. These four are the same KPIs that come out of every workshop I run with executive from all over the world, across all different types of industries. To get to them I create a simple exercise and say to them: You are running this business and want to understand how well the business is performing. You now have to select KPIs for the business and those metrics are the only management information you can use to judge whether the business is doing well or not. The challenge is that you have to agree on only 4 and together they should give you a complete picture.

This, by the way, is a great exercise you can do in your own company or with your own team and is one that sits in stark contrast to the way KPIs are usually developed: Brainstorming what we could possibly measure and ending up in a position where we measure everything that walks and moves and nothing that matters!

Anyway, the four KPIs that always come out of these workshops are:

Customer Satisfaction,Internal Process Quality,Employee Satisfaction, andFinancial Performance IndexHere are the reasons why these KPIs are picked time and time again:

Customer Satisfaction: Its simple, without customers your organization wouldnt be here. Any organization has customers it has to satisfy. For example: Apple, Inc. has customers that buy their products, the FBI has customers (the American public) whom they protects from terrorist and foreign intelligence threats, and an internal IT or HR function has customers (their co-workers in the operational departments) to whom they deliver services. Any business, government or not-for-profit organization has to ensure it delivers to their customers.

Internal Process Quality: Companies need to make sure their services and products are to the expected standards and that they optimize the way these products or services are delivered. It doesnt matter whether you are Apple, the FBI or a shared services function, all of them have to ensure their processes are as efficient and effective as possible and deliver the quality their customers expect.

Employee Satisfaction: Even though my last article was about the elimination of human jobs through the use of artificial intelligence and big data robots, we can safely say that employees are still the most important ingredients in any business. We all know that companies dont do well if their employees are not happy and this again applies to all enterprises.

Financial Performance Index: Money matters to Apple as much as it matters to the FBI or a shared services team. Apple needs to ensure it satisfies shareholders by delivering turnover growth and healthy profits, the FBI has to demonstrate it delivers value for money to the tax payer and the internal IT function has to ensure it controls costs and generates efficiency savings.

So here we have it. The four KPIs every manager needs to use. But how exactly do we know collect data on these? Ah, this brings me back to my original article about the 75 KPIs. Apple might develop their financial performance index by combining revenue growth with profit margins and EBITDA. The internal services team might track customer satisfaction using the Net Promoter Score. And the FBI might measure staff satisfaction using the Staff Advocacy Score.

Some will have spotted that these four KPIs fit neatly into the four perspectives of the Balanced Scorecard (BSC). The point I am always making is that this means the BSC is a very intuitive framework which might explain why it is one of the most popular management tools in use today. However, it suffers from the same problems as KPIs most scorecards are stuffed full with KPIs that are not relevant or meaningful.

So if you are seeking relevant and meaningful KPIs, simply start with customer satisfaction, internal process quality, employee satisfaction and financial performance.

As always, please share your views and let me know what your thoughts are. Does this make sense? Do you agree or not?

Admin KPI

WinningKPI-Admin department- KPI for general admin teamposted in category Admin departmentwant to measure admin team work on monthly basis, KPI is the best thing to do it, please let me know how to start this. planning to measuresoffice maintenance, security services , housekeeping services, courier, tea coffee, pantr

The list of 75 KPIs includes the metrics I consider the most important and informative and they make a good starting point for the development of a performance management system. Before we look at the list I would like to express an important warning: Dont just pick all 75 You don't need or indeed should have all 75 KPIs. Instead, by understanding these 75 KPIs you will be able to pick the vital few meaningful indicators that are relevant for your business. Finally, the KPIs should then be used (and owned) by everyone in the business to inform decision-making (and not as mindless reporting references or as 'carrot & stick tools').To measure financial performance:1. Net Profit2. Net Profit Margin3. Gross Profit Margin4. Operating Profit Margin5. EBITDA6. Revenue Growth Rate7. Total Shareholder Return (TSR)8. Economic Value Added (EVA)9. Return on Investment (ROI)10. Return on Capital Employed (ROCE)11. Return on Assets (ROA)12. Return on Equity (ROE)13. Debt-to-Equity (D/E) Ratio14. Cash Conversion Cycle (CCC)15. Working Capital Ratio16. Operating Expense Ratio (OER)17. CAPEX to Sales Ratio18. Price Earnings Ratio (P/E Ratio)To understand your customers:19. Net Promoter Score (NPS)20. Customer Retention Rate21. Customer Satisfaction Index22. Customer Profitability Score23. Customer Lifetime Value24. Customer Turnover Rate25. Customer Engagement26. Customer ComplaintsTo gauge your market and marketing efforts:27. Market Growth Rate28. Market Share29. Brand Equity30. Cost per Lead31. Conversion Rate32. Search Engine Rankings (by keyword) and click-through rate33. Page Views and Bounce Rate34. Customer Online Engagement Level35. Online Share of Voice (OSOV)36. Social Networking Footprint37. Klout ScoreTo measure your operational performance:38. Six Sigma Level39. Capacity Utilisation Rate (CUR)40. Process Waste Level41. Order Fulfilment Cycle Time42. Delivery In Full, On Time (DIFOT) Rate43. Inventory Shrinkage Rate (ISR)44. Project Schedule Variance (PSV)45. Project Cost Variance (PCV)46. Earned Value (EV) Metric47. Innovation Pipeline Strength (IPS)48. Return on Innovation Investment (ROI2)49. Time to Market50. First Pass Yield (FPY)51. Rework Level52. Quality Index53. Overall Equipment Effectiveness (OEE)54. Process or Machine Downtime Level55. First Contact Resolution (FCR)To understand your employees and their performance:56. Human Capital Value Added (HCVA)57. Revenue Per Employee58. Employee Satisfaction Index59. Employee Engagement Level60. Staff Advocacy Score61. Employee Churn Rate62. Average Employee Tenure63. Absenteeism Bradford Factor64. 360-Degree Feedback Score65. Salary Competitiveness Ratio (SCR)66. Time to Hire67. Training Return on InvestmentTo measure your environmental and social sustainability performance:68. Carbon Footprint69. Water Footprint70. Energy Consumption71. Saving Levels Due to Conservation and Improvement Efforts72. Supply Chain Miles73. Waste Reduction Rate74. Waste Recycling Rate75. Product Recycling Rate3 basic performance measuresIf you are at a loss for what to start measuring, then heres what I reckon are the absolute most important things to begin with, to establish a focus on what matters and a habit of measuring to improve performance in what matters:Customer Satisfaction: The average customer satisfaction rating provided by active customers on a scale of 1 to 10, taken from a monthly or quarterly pulse surveyRework: The total number of hours spent per week fixing or redoing things (rather than getting it right the first time)Cycle Time: The average time (in hours or days or whatever is appropriate) to complete or deliver the specific outputs of your work process (weekly or monthly)