Metrics, Scorecard, KPIs

Measurement of business seems rather easy to first glance.  Indeed it seems like all you have to do is to evaluate financial indicators and perform simple mathematical operations.  The company may be earning good money, hire new employees and even develop and introduce new products.  But what about the strategy?  Is the company doing OK in terms of implementation of strategic goals?  As the company strong enough to withstand tough competition?  Is the company ready for challenges?  Of these a very important questions which may be not acute for a company at a present time but they will become extremely important in future.

That’s why, strategic goals and future vision are very important for any company operating in a highly competitive environment.  Strategic vision is about forecasting and predicting possible problems and obstacles.  Future vision is about outwitting of competitors.  It is a real art to solve problems even before they occurred.

Any organization faces two challenges: evaluation of current performance and communication of strategic management with operations.  It is very important to know that the company is doing the right things to reach strategic goals.  Moreover timely introduction of changes to the strategy, goals and measures will make it possible to correct mistakes before the lead to negative consequences.

BSC implementation stages

Balanced scorecard is a must have tool for any organization pursuing strategic goals.  Through evaluation of key performance indicators balance scorecard will tell much about past and future events for the company.  Financial indicators characterize something that has been already done, while nonfinancial ones will tell pretty much about what will happen in future.  Evaluation of intangible assets and nonfinancial indicators is the greatest advantage of balanced scorecard.

Major BSC mistakes

Key performance indicators are grouped in four categories: financial, customer, internal business processes, learning and growth.  Every category characterizes key success factors in the internal and external environment.  Customer category includes goals and measures related markets and relations with customers, while internal business processes category answers the question “how will keep our customer satisfied?”

Balanced scorecard can be used in two ways: as a performance management tool and as a system of strategic planning.  In its first function it will easily measure business and its product in a tea, locate problematic areas and weaknesses etc.  In the function of the strategic management tool balanced scorecard has no competitors.  This tool if you buy the most successful world companies.

The measurement of how well members of the training class are doing is done through training KPI or training key performance indicators. This is a set of standardized processes that identify not only the areas of opportunity of each trainee, but also the training needs of each individual or as a group. This way, significant improvement is achievable in terms of training materials, curriculum, location, and many more.

With standardized training KPIs, one will be able to measure minimum skills required or MSR for hiring—which Human Resources will have to infuse in the hiring process—and minimum skills validation or verification (MSV). The minimum skills validation will be based heavily on what is expected from the students. This will also be used in congruence to what is desired and what is currently available from the pool of resources or manpower. Simply put, key performance indicators are numerical representations of targets. To drive performance on production, one must be data driven to ensure that all actions are backed up by statistical observation, not on assumption.

In training, one needs to assess how well a group or a class learned. This may be done in several ways. Some trainers conduct a pre-assessment test prior to the learning experience and then another after the entire curriculum is done. This is to measure how the student improved in terms of product knowledge. Some trainers do it after every module to make the findings more accurate and to validate the learning capacity of an individual while the information is still fresh in one’s mind.

Being data driven in training empowers a company to set standards that are all aligned with organizational goals. The numbers—say, test results—are all indications of what has possibly gone wrong or right in the training process. If majority of the students failed, it is very likely that there is a gap in the training methodology or with the trainer’s approach. If majority of the students passed the certification, it is also likely that the people who failed need to be re-assessed in terms of skills. Perhaps there are similarities in the gap between the non-passers, such as absences in classes, during which their failing areas were discussed.

To identify which key performance indicators to use, one should have a clear set of objectives and direction. A company should have a procedure that measures all required results, so this will be the basis in developing a standard measurement or evaluation, also known as minimum skills validation. Once the goals and performance expectations are set, training needs analysis may be conducted to identify key areas of concern for the development of a curriculum that will address then current issues in the operations team.

If the currently productivity level is low because the employees do not know what to do, the training team may increase the weight or bearing of that particular aspect of the job to identify who among the current roster of trainees will be hired.

This is done to ensure that action plans are really targeting what is missing in the training process. The weigh of attendance during training certification may also be increased if the main issue is attrition. In general, training KPI can be very flexible as long as each metric addresses the current issues at hand.

If you are interested in training kpi, check this web-site to learn more about balanced scorecard kpi.