Performance indicators, to measure is to know
Performance Indicators (PIs) are metrics that provide insight into how well processes, teams or the organization as a whole are performing. Sometimes they are confused with Key Performance Indicators (KPIs), but KPIs are in fact the most important PIs: the critical metrics directly linked to strategic organizational goals. In this blog, we focus on PIs in the broad sense. Because it is precisely by measuring at multiple levels in the organization that you get a complete picture of performance and can make targeted improvements.
The secret of effective performance indicators (PIs)
Performance indicators are indispensable for organizations managing for quality. And quality can be expressed in many ways. A good product, safe execution of work, or good accounts payable management. Therefore, performance indicators are present in various forms at various levels in the organization. Everyone knows by now that performance indicators must be defined SMART. Yet many performance indicators in organizations are no more than a necessary evil.
Many organizations feel obliged to use indicators because it is required by ISO or health insurers. But this almost never works well. Therefore, it is important to find out the intent behind the indicators and find smart solutions.
Performance indicators and the PDCA cycle
PIs can be used to measure (partial) performance within an organization. This provides insight into the effectiveness and efficiency of business processes. But a measurement is only valuable if action is also taken on the basis of the results. This is the third (check) and fourth (act) steps of Deming’s well-known PDCA improvement cycle. Many organizations ignore these steps, but by mastering them well, you can respond quickly to unforeseen circumstances and continuously improve business operations.
Simplicity works
There are a lot of pitfalls when it comes to choosing and using performance indicators.
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Keep it simple
Avoid jargon and make indicators understandable to everyone. Profit is obvious to everyone, but EBITDA is not always. Translate strategic goals into concrete, understandable PIs for each department. -
Involve employees
The best PIs often come from the people who work with the process every day. They know exactly where the key measurement points are. -
Make them actionable
A PI is only valuable if it leads to concrete improvement actions.
And now put it into practice!
Once the performance indicators are known, they should be made available in a smart way.
Preferably without manual actions and in real-time overviews. This avoids delays in follow-up, as well as the organization’s dependence on an official. Some data will be able to be taken directly from an ERP or machine control system.
Nevertheless, there are also a lot of business processes that are performed in Excel action lists or on a shared network folder. Up-to-date updating, as well as simultaneous editing by multiple people are potential risks that can negatively affect data quality. In addition, these activities are seen more as registration obligations than as a necessary part of the business process in question!
Our solution, digital forms with workflow
We have developed a smart process to automate all kinds of supporting business processes with digital forms with workflow management. This makes data collection a result of business operations.
With built-in checks and standard drop-down lists, data quality is nearly flawless and readily available for reporting. As a result, performance indicators are always current and presentable in a controlled Excel Dashboard. In cooperation with our customers, we also have a graph module available for publication on PC screens and video screens. And of course without complicated codes.
Wondering how this can be implemented in your own organization? We’d love to show you!
Checklist: this is how to tackle performance indicators effectively
- Define purpose: know why you are measuring an indicator
- Choose relevant PIs: measure what really matters for process and quality
- Make it concrete: use understandable language and clear definitions
- Involve the shop floor: let employees give input on PIs
- Automate where possible: avoid manual work and errors
- Link PIs to actions: continuously analyze and improve via PDCA
- Keep it current: make sure data is available in real time
Want to know more? Get in touch
Do you have questions or are you curious how LeanForms can support your organization? We are ready to answer all your questions! Get instant specialized advice on the best solution for your specific situation.
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