What? Track only ONE Key Performance Indicator? That is like flying a jet plane with, say, a choice of fuel level, altitude, airspeed. Pick one, and good luck. Crazy, right?
A business is like a jet airplane in that to hit its target with accuracy it needs more than one Indicator to really fly. Likely about 8-12 Key Indicators.
I agree with that.
However, there may be one Super Key Performance Indicator that if you could discover it, it would be a kind of early warning siren for your business.
This early warning would wake you up to take immediate corrective action if it is off target or relax with a glass of wine if it is on target.
Let us take a look and explore this concept together…
Super Key Performance Indicator
Behind every business, in every industry there may be a kind of magic number. A Super Key Performance Indicator.
This number will act like an early warning sign of trouble brewing.
A Super Key Performance Indicator for an Airline
I read once that the CEO of British Airways looked daily at this Super KPI – flights leaving on time.
If flights did not leave on time, everything spilled out of control:
- Costs went up from the delay.
- Passengers would be irate and expect refunds.
- Passengers would need meal tickets and sometimes hotel costs covered.
- Employees may have to be paid overtime and booked in hotels with meals.
A flight not leaving on time does not arrive on time, adding more costs from the bottleneck.
You can imagine the snowball effect of one flight not leaving on time.
An Unusual Super Indicator for a Restaurant
Super Key Performance Indicators can be incredibly unique!
I heard of a restaurant owner who could roughly predict the number of guests he would get at his restaurant on Saturday from how busy Monday was.
Honestly, I have no idea how the two interrelate.
And that, in part, is the key.
An Accounting Firm Super KPI
For an accounting firm longing for long-term client retention, a Super KPI could be a simple one – the growth rate of sales combined with cash in the bank (cash in the bank of the clients, not the business).
Okay, okay I know that is two – sales growth and cash on hand.
Cash on hand (from sales growth) could indicate the following:
If the client’s cash is declining:
- Low cash causing stress paying bills including the accounting firms.
- Higher demands for the accounting firm to help them attain positive cash flow.
- Loss of the client if they go bankrupt.
On the other hand, high monthly cash flow means:
- A happy client eager to listen to your advice.
- A client who is growing and will likely expand their demand for more services from you.
A Super KPI for All Businesses
In the area of marketing, it will be relatively easy for a business to find a Super KPI…
To find your unique Super KPI in the marketing area do this – find the one activity that drives sales more than any other.
It could be phone calls, direct mail, events, or website contacts.
Find the activity that gives you the most sales.
To get more business, first track that activity and then increase the activity to grow your business.
Simple, right?
Lastly, keep examining new and innovative ways to market because your business tools might change. Phone calls that worked last year, might not now. Perhaps it is something online.
The key is to keep looking.
How to Find Your Super Key Performance Indicator?
A Super KPI will emerge for your business by you thinking deeply about and examining patterns.
To help you find the patterns ask yourself some questions:
- What one thing that we are doing as a business has the greatest impact on our business within the next 12 months?
- What one thing that we could do would have the greatest impact on our business results?
- What bottlenecks do we have?
- What is the single thing that drives our clients/customers crazy when we do not do it? (i.e. it could be on-time delivery, or what is delivered is not high-quality).
- What is our review score on Google?
- What strange pattern is there in our business (like Monday guests as an indicator for Friday guests!) that I have not seen yet?
- Ask your Team for patterns they may see that you do not.
Thank you for reading…