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If you’re going to be serious about improving the enterprise value of your company you must put a key performance indicator (KPI) program in your company.  I love the saying “that which gets measured, gets done.”  That statement is one of the most important one can make when improving the value of your company.

There is also a second and probably more important part of instituting a KPI program.  That is understanding what the drivers are for your business and what drives the KPI’s you’re measuring.  Driver measurement is what will actually make your business better.  KPI’s are just the proof that you are making your company better and more valuable, both to you as an owner and to a potential buyer when it comes time to leave your business.

Here is a list of some things you should think about as you institute a KPI program in your company:

  • Make sure your KPI’s are important to the success of your company.  Often people want to use profit as a KPI.  Although profit is very important, there are probably other measurements that will make your company more successful.
  • Have no more than three KPI’s you are measuring.  It’s nice to have dozens of goals.  My experience is that more than three KPI’s is often counter productive.  Having few KPI’s will usually mean more effort is made in improving these areas.
  • Share the KPI’s with everyone in the company.  If you want to improve your company, you have to share the metrics that you use for measuring that improvement.
  • Concentrate and chart all of your drivers.  The things that drive your KPI’s are really important.  You and your staff will want to have regular driver meetings to discuss ways that drivers can be improved.
  • Monitor the drivers.  Charting is only the beginning.  You will want to talk about the driver charts and point out successes in your company for those who have moved the bar forward.
  • Integrate your KPI program with your companies mission, vision, values and goals.  If your people have a reason to make your company better they will work very hard to move the bar forward.

I love to talk about KPI’s.  Click on the make an appointment button and I’ll be glad to have a conversation with you about this topic.  Also, let me know what your thoughts are.  Comments are always invited.

Josh Patrick

I’ve written a special report on using key metrics in your business.  I encourage you to download this report by clicking on the button below.  I believe you’ll find this report fits in nicely with the entry above.

Key Metrics Report


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Topics: business exit planning, Key Performance Indicators (KPI), KPI

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