A large topic is so called key performance indicators (KPI). They are numbers that refer to specific operational facts / developments and have a special significance. Key figures support entrepreneurial activity through their applicability to planning, control and monitoring activities.
They help to bring about rapid comparisons by relating different numbers to each other.
The information necessary for the formation of key figures can come from two areas:
- From the big "pot" of the numbers available in the financial accounting. These are e.g. return on equity, equity ratio, ROI and revenue per child care day. The danger with these indicators is that they are very abstract and often difficult to relate to everyday reality.
- Here it depends on which division and which processes in the company I would like to focus on. This could be the personnel area. In this case it could be e.g., the question of the sick days or days off which can sometimes be an important indicator.
Now the question arises, how do arrive at key figures, which have something to do with the above-mentioned "everyday reality"?
At IMO we work with the following image / process:
After reviewing various key figures, we select one. Then we look at the process that leads to the formation of the key figure. At the same time, we ask ourselves what further information is required to reach the desired key figure at the end.
After listing various key figures, the working group decided on the topic of "admission control" in a nursing home. It is very important to know:
- How many beds are available?
- How many are occupied?
- Did a person leave the facility?
- How many people are interested and would like to be accepted (waiting list)?
To answer these questions, a process is necessary. This can be, for example, that so-called. "Occupancy panels" are performed, which map the current occupancy level daily.
Working with the 7 Beacons can be helpful when structuring this kind of process. A separate blog on the topic will follow.
As a general rule:
No more than five metrics per business unit should be used.