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3.3. Practice Management - Key
Performance Indicators (KPIs) |
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In order to properly utilize your Critical Success Factors (CFS’s) you need to have a way to
measure your progress. How specific, and the accuracy of your CSF’s, will determine what
to measure, how to measure it, and what part management plays on the outcome. |
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| The measurement tool most used is Key Performance Indicators (KPIs). |
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| They answer such questions as: |
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| • Are you close to success? |
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| • Are you moving towards your goals? |
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| • Are you at your goal? |
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| • Is the staff deserving of a bonus this year? |
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Proper KPI selection is crucial to ensuring that you’re focusing on
effectiveness and efficiency. |
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Efficiency is completing a specific task in the best way possible to achieve a result. While,
effectiveness, is completing the correct tasks in order to achieve a higher outcome.
Business can be efficient and yet not effective, which means fairly certain failure. A
business that is effective but not efficient can be easily turned around. When selecting KPI’s
make sure that you focus on effectiveness first and then look at efficiency. |
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It is very important that business owners be cautious with KPI’s. Far too many business
owners make the same mistakes with KPI’s, realizing they have not been achieving the
results that they wanted to. They decide to go overboard and implement too many. This
generally creates conflicting KPI’s and overwhelms the staff. The best results can be seen
by starting out with a few very well-thought-out KPI’s. |
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| Key stages to creating Key Performance Indicators (KPIs) are: |
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| • Define your business processes |
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| • Set requirements for each business process |
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| • Use quantitative and qualitative measurements to compare current results with goals |
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• Investigate variances and refind processes (or redistribute resources) in order to
achieve goals |
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Take your time when creating your KPI’s. You really want to customize them to your
businesses goals. The better your KPI’s are the more improvements you will see. The time
spent planning your CSR’s and KPI’s will be paid back to you in long-lasting improvements. |
