16 June 2025
When you're running a business, there's one big question that never leaves your mind: "How are we actually doing?" Sounds simple, but the answer? Not so much. That’s where the power of KPIs—Key Performance Indicators—comes into play. They’re not just a corporate buzzword. In fact, they’re the secret sauce behind sharp decision-making and long-term success.
But here's the real deal: KPIs only work if they're solid, relevant, and aligned with what you actually want to achieve. Slapdash KPIs can lead you on a wild goose chase. Strong, well-thought-out ones? They’ll steer your operations toward efficiency, productivity, and profitability like a GPS with no detours.
So, let’s deep dive into what it really means to establish strong KPIs to measure operational success—in plain, human language.
Not all KPIs are created equal, though.
Some are like junk food—satisfying in the moment but lacking real substance. Others are lean, mean, performance-monitoring machines. The difference lies in how they’re defined, measured, and used.
Operational KPIs serve as your dashboard. They keep your teams focused, your processes efficient, and your outcomes aligned with your goals. If you’re trying to scale or optimize any part of your business, KPIs are non-negotiable.
- Specific: No fluff. A strong KPI is laser-focused.
- Measurable: If you can’t track it with data, it’s not a KPI.
- Achievable: Don’t shoot for the stars if you’re still learning to fly.
- Relevant: It has to matter to your goals.
- Time-Bound: Deadlines are critical. Open-ended KPIs aren’t useful.
(That's the SMART framework, by the way—classic but still gold.)
For a logistics company, it might mean 98% on-time deliveries. For a SaaS business, maybe it’s a 90% customer retention rate. This is your North Star, and your KPIs will orbit around it.
- Procurement
- Production
- Inventory Management
- Customer Service
- Fulfillment
- Quality Control
Each process needs its own KPIs to track performance.
Some ideas:
- Units produced per hour
- Machine downtime
- Error rates
You’re not trying to track everything under the sun—just the stuff that makes or breaks your performance.
Look at historical data (if you’ve got it) or industry benchmarks. Set a reasonable baseline. Then figure out where you want to go. And no, “improve over time” doesn’t cut it—get specific.
“Reduce customer complaints by 20% within the next 6 months” is more like it.
This doesn’t mean one person alone fixes it—but someone should be the point of contact, the champion, the owner.
Schedule regular check-ins (monthly or quarterly) to see what’s working and what’s not. Don’t be afraid to tweak them. Better to pivot than blindly follow an outdated metric.
Platforms like Tableau, Power BI, or even Google Data Studio can visualize your KPIs in real time. Dashboards are great because they give you a quick snapshot without digging through spreadsheets.
And if you're in a smaller outfit? Don’t worry. Even a good Excel sheet can work wonders when formatted right.
Make KPIs part of your daily conversations. Display dashboards prominently. Celebrate the wins when teams hit their numbers. Provide support and resources when metrics fall short.
When everyone’s rowing in the same direction—and knows exactly what "moving forward" looks like—you’ll see your operations transform.
Whether you're running a lean startup or managing operations at a Fortune 500, spending the time to create strong KPIs isn’t just a smart move—it’s a game-changing strategy.
So, let’s leave “guesswork” behind and start making decisions based on what counts. Because if you can’t measure it, how will you know it’s working?
all images in this post were generated using AI tools
Category:
Operations ManagementAuthor:
Rosa Gilbert