The Art of Setting KPI’s

How many of us have worked in businesses where conflicting KPI’s prevent us from doing our job effectively?
One business I worked for, spurred on by a shrinking client base, called their sales team together and demanded that they specifically target smaller clients. They pointed to figures that showed that this market segment had been left to dwindle by egotistical sales people that look for the quick fix of selling to large customers at discounted rates.

Later the same day, the manager of the credit department stood before the same sales team and told them she had successfully reached her KPI, of reducing debtor days, by closing accounts the moment they went over 45 days. She pointed to figures that backed her claims, showing that most of the smaller businesses that had historically bought from the business had their accounts closed because they had cash flow problems at some point.

The truth was both the sales and the accounts department were working to KPI’s that were conflicting. This in turn caused unrest in the business as everyone pursued their own KPI’s with no regard to anyone else. The important lesson form this is to ensure your KPI’s are aligned throughout your business to ensure success for everyone. If you are having troubles setting KPI’s in your business that deliver results, please head to www.smallfish.com.au where help is available.

To read more on The Art of Setting KPI’s, click here for an article that was listed on smartcompany.com.au.

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