The success of professional services firms like yours will ultimately be determined by the consistency of results. And those results can only be reached if your workforce consistently meets its expected goals and targets.
KPIs (key performance indicators) are quantifiable measures that your business can use to determine how well your goals are being met. Plus, KPIs can be set out for projects and used to identify how well certain employees are performing.
Let’s dig a little deeper into the benefits.
While they can be easily confused, KPIs aren’t business goals or target themselves, but a measurement of goals/targets. For example, if your goal is to reach a specific win rate of new projects each month, your KPIs will show how close (or far) you are from achieving those targets.
A KPI in this instance could be showing that your teams new project win rate is only at 50% and below what your business has set as a benchmark. This would make the leaders in your organisation instantly aware of your team’s progress and reason behind them not hitting the expected new project win rate.
By measuring goals in this way, you can pinpoint exactly where your teams are going wrong and make the necessary changes to help you reach your goals faster.
KPIs can reveal vital statistics about performance. So, by not using them, you increase the chances of making inaccurate assessments of your employees during reviews. For example, you might assume an employee is performing below par because of their punctuality or a perceived lack of company engagement, but you have no measurable proof of this.
A KPI might reveal that your assessment is incorrect and the “underperforming” employee may have some favourable stats and had been delivering good results.
On the other hand, staff who are performing poorly can hardly argue their case if their KPI stats are making for unfavourable reading. Essentially, KPIs encourage accountability for both employees (if they’re underperforming) and employers (if KPIs are believed to be unrealistic).
Keeping your employees happy is arguably the most important aspect to a building a successful professional services firm. However, many companies have trouble finding measurable ways to track their employees satisfaction.
Setting targets which can only be achieved once a quarter/year isn’t enough to keep them engaged. A good KPI system can be highly rewarding for your employees if they’re getting positive reports for meeting specific KPIs in the interim.
These results are often instant, helping them create a sense of purpose and remain focused on meeting targets. Plus, KPIs help keep your managers informed on your teams performance.
This data can then be used to:
By measuring the same KPIs over each quarter, you can begin to identify patterns in your data. For example, you can better predict when your slowest quarter will be. This time could then be used to improve other areas of your business (think running a system update or a company-wide training initiative).
Other patterns you might spot is your sales manager always forecasts that you’ll win a certain amount of deals over/under where you normally end up at the end of the quarter. Or, you’ve got team members who are consistently under/over performing on their KPIs - use this data to talk to them about the expectations required (good or bad)
Use a combination of KPIs in a dashboard to gain access to the right information at your fingertips, helping you solve problems or tackle opportunities.
For example, let’s say you’ve got a great idea for a new service. You could test it out with a few clients and use KPIs to validate your business model before launching it on a larger scale.
You might monitor:
Without a clear understanding of how to measure your success, you’ll struggle to get the maximum value from your business and deliver the best results for your customers.
KPIs will give you clear goals and specific metrics to track performance. And in today’s professional services market, ensuring your business can pivot on demand to meet growing expectations is a must.
Our checklist covers the five key stages to achieving business agility. Download it below.