Measuring the non-financial results of your organisation
Financial figures alone do not provide a complete description of an organisation’s health, but there are so many other things which could be measured; how do you decide which measurements are the most important ones to make? Patrick Georges and Josephine Hus assert that any organisation can succeed if it measures and improves only a few carefully selected key performance indicators, in their book Six Figure Management Method: How to Grow Your Business With the Only Six KPIs You’ll Ever Need.
The six most important performance indicators for an organisation to monitor, according to the authors, are:
- Sales from new sources: A measure of your innovation performance
- Time facing customers: A measure of how well you are interacting with your customers
- Gains from processes: A measure of your improvements in operational efficiency
- People responsibility level: A measure of how well you are delegating responsibility to your best people
- Return on critical resource: A measure of the benefits you are gaining from your most important resources
- Key project status: A measure of the status of your most important change project
These six indicators are said to be universally applicable, to small businesses as well as to large, to individuals and departmental units as well as to overall organisations, and to non-profits as well as to businesses.
The authors indicate that these six performance indicators were identified as the most important as a result of surveys of hundreds of executives from around the world, conducted over numerous years. The description of methodology is too brief for a reader to form an opinion on the survey’s scientific validity, and the authors have a software product to promote, but nonetheless most readers are likely to find the six performance indicators described in the book to be a very useful starting point in the selection of critical measurements for their own organisations.