Key Performance Indicators (KPIs) are essential tools for measuring the success of your business strategy.
For UK SMEs, KPIs provide a quantifiable way to track progress and ensure that you are on the path to achieving your goals. However, while KPIs are widely recognised and utilised, there’s another crucial metric that businesses should consider: Key Behavioural Indicators (KBIs).
KPIs: Measuring What Matters
KPIs are measurable values that help businesses track their progress toward specific goals. These indicators are critical in strategic planning because they provide a clear, quantifiable way to assess whether the business is on track to achieve its objectives. For example, if a business's goal is to increase market share, relevant KPIs might include customer acquisition rates or sales growth. KPIs are typically aligned with the SMART criteria (Specific, Measurable, Achievable, Relevant, and Time-bound), ensuring they are both relevant and actionable.
As management expert Peter Drucker famously said, “What gets measured gets managed.”
This highlights the importance of KPIs in providing actionable insights that guide decision-making.
A survey by Bain & Company found that 90% of businesses using KPIs report improved decision-making, and SMEs that use KPIs are 30% more likely to achieve their strategic objectives than those that don’t.
KPIs are more than just numbers—they are the compass that guides your business strategy. By regularly monitoring KPIs, business owners can see what’s working, what isn’t, and where adjustments might be needed.
KBIs: Understanding the Drivers of Success
While KPIs focus on the outcomes, Key Behavioural Indicators (KBIs) emphasise the behaviours and actions that lead to those outcomes. KBIs track the specific actions and behaviours of employees or customers that are critical to achieving the desired results. For example, in a sales environment, while a KPI might measure the number of sales closed, a KBI might track the number of client follow-ups or the quality of customer interactions.
The key difference between KPIs and KBIs is that KPIs measure the "what" (the results), while KBIs measure the "how" (the behaviours that drive those results). By focusing on KBIs, businesses can gain insights into the underlying actions that lead to success. This can be especially powerful for driving change, improving processes, and ensuring that the right behaviours are being encouraged throughout the organisation.
Aligning KPIs and KBIs for Optimal Performance
For a comprehensive approach to strategic planning, it’s essential to use both KPIs and KBIs in tandem. KPIs will help you measure the outcomes that matter to your business, while KBIs will ensure that the behaviours leading to those outcomes are on track. By aligning both types of indicators with your business goals, you can create a more holistic and effective strategy that not only measures success but also drives it.
In conclusion, while KPIs are critical for tracking progress and making informed decisions, KBIs are equally important for understanding and influencing the behaviours that lead to success. By incorporating both into your strategic planning, you can ensure that your business is not only measuring success but also driving the right actions to achieve it.
Businesses that effectively use both KPIs and KBIs are better positioned to navigate challenges, stay agile, and continuously improve their strategies, making them more likely to achieve their strategic objectives.
Comments