Surely your company monitors strategic indicators that help you achieve the desired growth, whether through increasing sales, acquiring new markets, improving customer experience, reducing production costs, etc. ., there are many ways to move towards success.
Leveraging accurate and reliable data to identify areas of improvement that help the business thrive is why managers are increasingly considering using metrics as part of their decision-making process.
Let’s know what those strategic indicators are that will help us achieve our objectives, but first…
What are strategic indicators?
A strategic indicator is one that aims to measure the performance of actions to achieve the objectives that an organization has set for itself in the short, medium and long term. It also allows the organization to compare its practices and results with those of the sector (benchmarking).
Thanks to the data necessary to interpret the indicators, the director of a company can evaluate the productivity of his organization and control the pace of the efforts assigned to him. Using these benchmarks, an organization can guide the improvements to be made that will allow it to measure the success of its strategic plan.
Why select strategic indicators
These “emblematic” indicators will be the objectives shared with employees, therefore, it is necessary to carry out an evaluation of the contribution of the indicators in relation to each strategic axis.
Analyze the coverage of the indicators by: quality, cost, efficiency, risk, deadlines (the selected indicators must generally cover several dimensions).
The identification of strategic indicators is the prerequisite for any continuous improvement initiative. Trying to improve a process without being certain that its proper functioning will have a strong added value to the contribution of the company’s strategy is a useless effort.
Therefore, it is important to carry out this work when a company’s strategy has just been defined or adjusted to a greater or lesser extent.
Types of strategic indicators
To be effective, indicators must be grouped, usually in a strategic dashboard that covers all departments of the company.
Four main categories of indicators can be distinguished:
1. Sales and marketing indicators
The commercial performance indicators will make it possible to measure the effectiveness of the company (level of activity, effectiveness of promotion plans, customer satisfaction, market share of the different products, signing of framework agreements, etc.).
Figures such as business volume (by product, branch, service, seller, etc.) are usually provided by the accounting department, since only the recorded elements are taken into account.
Others are provided by the marketing department (customer surveys, etc.), the customer service department (number of quality calls, product return rate, etc.), or internal tools such as a CRM.
Sales indicators can be, for example, the ratio of loyal customers to total customers (in terms of turnover or number), the cost of acquiring a customer, the number of new customers and the number of lost customers. over a period of time, the number of visits to the website, the bounce rate, etc.
Commercial indicators also include measures relating to information on the added value of products, brand awareness, and the weight of the company’s innovation in the target market.
2. Management indicators
Another of the strategic indicators are the management indicators, which include all the indicators used to control the profitability, financing and administrative monitoring of the company.
Obviously, they must be adapted depending on the manager’s final objective (development, profitability, resale, etc.). They are established using accounting data, which generates a lag in obtaining them.
For example, the margin achieved, profitability, cash flow, pending clients, etc.
3. Indicators related to production
Production processes and procedures can be controlled using indicators adapted to the company and taking into account its technical and economic specificities.
By production we mean industrial processes, which can be broken down into several sub-processes if necessary, but also administrative and organizational processes (creation of a new client, response time at reception, number of calls received per hour, etc.), training (satisfaction rate, use rate of computer tools, etc.).
4. Human resources indicators
Many managers agree that the main value of a company lies in the quality of its personnel, so it is important to establish human resources indicators to manage and control this quality.
For example, it is quite possible to establish indicators to control the correct distribution of vacations, the level of absenteeism to improve working conditions if necessary, the level of team rotation, etc.
Create a dashboard to visualize your strategic indicators
A dashboard is a tool to group the main indicators based on the company’s strategic objectives. Indeed, as the dashboard is synthetic, it can only contain a few main indicators.
The choice of indicators allows the manager to show the teams the axes and objectives that he considers priority.
A dashboard also allows you to highlight trends and make forecasts. It helps to anticipate turns or negotiate important changes by highlighting deviations, changes or coherences (or inconsistencies) between the different indicators. Its function is to help evaluate the effectiveness of your operational strategy.