Successful companies are continually monitoring and measuring their performance. This does not mean that they micromanage their employees, but rather they identify Key Performance Indicators (KPIs) and monitor their performance against those goals.
When they fall short of their goals, they analyze the situation to determine what went wrong and figure out whether the problem is a one-off or systemic. If it is systemic, they will take steps to get to the root cause of the problem and then deploy the necessary resources—people, capital, and training—to eliminate the problem. And they will continue to monitor the KPI to see if the new solution is allowing them to be successful.
One thing to remember with KPIs is that, even if you are performing well against your existing KPIs, you need to periodically review them to make sure they still are relevant to your business and set new ones as needed.
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There is no one-size-fits-all when it comes to setting KPIs. Each business is different, and each has strengths and weaknesses in different areas. A good way to determine which KPIs make the most sense for you is to perform a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). The obvious place to start developing KPIs is in the areas where you have identified weaknesses. There is not a lot to be gained from setting goals for things you are already doing exceptionally well.
Let’s take a basic example of breakdowns. There are industry statistics available that cover things like miles between breakdowns. You can see how you measure up to those industry averages. If you are below the average range, meaning your trucks are breaking down more often, you can set a KPI to lengthen the time between breakdowns. However, setting the KPI is not enough. Your next step is to review your breakdown records to see what is causing your trucks to breakdown. Is it a lack of maintenance? Poor driving skills? Poor vehicle spec’ing? Any number of factors can lead to breakdowns.
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Your goal is to identify the problem and figure out what needs to be done to fix it—additional training for technicians on certain maintenance procedures, a driver refresher course on how to avoid hard braking, a spec review with your truck manufacturer, etc. Once you have put a system in place to address the problem, then you need to monitor your progress toward meeting the new goal.
I suggest you continue to monitor the progress until you see meaningful improvement. When you are consistently meeting your KPI goal, it may be time to move on to another area of your business that needs improvement while still periodically checking to ensure you are performing as desired in all areas of your operation.
Set KPIs that address areas of your business most in need of improvement today. With KPIs, it is not so much a matter of what they are, but rather, it is about what you do to measure your progress so that you are continuously improving.
Jane Clark is vice president of member services for NationaLease. In this position, she is focused on managing the member services operation as well as working to strengthen member relationships, reduce member costs, and improve collaboration within the NationaLease supporting groups. Prior to joining NationaLease, Clark served as area vice president for Randstad, one of the nation’s largest recruitment agencies, and before that, she served in management posts with QPS Cos., Pro Staff, and Manpower Inc.
