25 KPIs Every Manager Needs To Know
Jul. 29, 2014•0 likes•723,431 views
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Key Performance Indicators (KPIs) should be used to understand performance and drive better decision-making. However, most companies struggle to find the vital few KPIs. Here is a list of the 25 top KPIs is use today.
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25 KPIs Every Manager Needs To Know
- 2. Key performance indicators (KPIs) should be the vital navigation instruments used by managers to understand whether their business is on a successful voyage or whether it is veering off the prosperous path. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 3. The problem is that most managers are struggling to understand and identify the vital few management metrics and instead collect and report a vast amount of everything that is easy to measure. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 4. Based on many years of helping companies across the world select and use KPIs, I have picked my top 25. Published in my latest Financial Times book: 25 Need-to-Know Key Performance Indicators © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 5. I have picked the ones that should be relevant to most companies. But remember, these are KPIs you need to know, not use! Only use the ones that are relevant to your business strategy and make sure not to miss out the industry specific ones for you (you won’t find those in any generic list). © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 6. I have organized my top 25 KPIs into the following four business areas: 1. Measuring and understanding your customers 2. Measuring and understanding your financial performance 3. Measuring and understanding your internal processes 4. Measuring and understanding your employees © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 7. Part 1 Measuring and Understanding Your Customers © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 8. 1. Net promoter score (NPS) - How likely is it that a customer will recommend your business to a friend? © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 9. 2. Customer profitability score - How much profit do individual customers bring your business, after deducting the costs of attracting and keeping them happy with advertising, customer services etc? © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 10. 3. Customer retention rate - How many of your customers are going to come back for more? And how loyal are they to your brand, organization or service?
- 11. 4. Conversion rate - How well do you translate enquiries, sales calls and web page views into paying customers?
- 12. 5. Relative market share - How big your slice of the pie is, compared to your competitors in the same market. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 13. Part 2 Measuring and understanding your financial performance © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 14. 6. Revenue growth rate - The rate at which you are increasing your company’s income. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 15. 7. Net profit – Income minus expenses – the bottom line, but certainly not the only metric you need to worry about! © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 16. 8. Net profit margin - The percentage of your revenue which is net profit. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 17. 9. Gross profit margin - The percentage of your revenue which is gross profit (the profit generated for each dollar of sales). © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 18. 10. Operating profit margin - Operating income divided by revenue – another measure of a company’s profitability. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 19. 11. Return on investment (ROI) The revenue generated by investing money into an aspect of a company’s operations, in relation the cost of that investment. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 20. 12. Cash conversion cycle (CCC) - How long does it take for money invested in the business (for stock etc) to come back to the company in the form of increased revenue. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 21. Part 3 Measuring and understanding your internal processes © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 22. 13. Capacity utilisation rate (CUR) - Are you meeting your potential in terms of amount of work you can carry out, with the resources you have available? © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 23. 14. Project schedule variance (PSV) - Are your projects reaching completion on time? © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 24. 15. Project cost variance (PCV) - Are your projects coming in without going over budget? © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 25. 16. Earned value (EV) metric - Value generated by your company’s ongoing projects. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 26. 17. Order fulfilment cycle time (OFCT) - The time that it takes from a customer placing an order, to the product or service being delivered. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 27. 18. Delivery in full, on time (DIFOT) rate - Customer orders filled in full, and on time, compared to total number of customer orders. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 28. 19. Quality index - Is the quality of your goods or services as high as your customers are expecting? © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 29. 20. Process downtime level - How much time is wasted due to downtime, technical breakdown or staff sickness. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 30. Part 4 Measuring and understanding your employees © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 31. 21. Staff advocacy score – How likely are your staff to recommend you as a company to work for? © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 32. 22. Employee engagement level - How does your employee’s behaviour contribute to the business’s overall goals? © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 33. 23. Absenteeism Bradford factor - How much is unauthorized staff absence costing your business? © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 34. 24. Human capital value added (HCVA) - The financial value added to the business by individual members of staff. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 35. 25. 360-degree feedback score How staff rate each other – as well as themselves. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 36. Find out more and order the book here: 25 Need-To-Know Key Performance Indicators © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 37. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 38. © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 39. Order Options: • Amazon US • Amazon UK • Barnes & Noble • Pearson © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.
- 40. About This overview was put together by Bernard Marr, Founder and CEO of the Advanced Performance Institute. Bernard Mar is a bestselling business author, keynote speaker, strategic performance consultant, and analytics, KPI & Big Data guru. He helps companies with their KPIs and trains teams to better develop and use KPIs. Read Bernard’s blogs: • LinkedIn Influencer Blog Connect with Bernard on: • LinkedIn • Twitter • Advanced Performance Institute © 2014 Bernard Marr, Advanced Performance Institute, BWMC Ltd. All rights reserved.