Ted Jackson from Clearpoint Strategy breaks down 18 KPI examples and explains how different organizations use them to track strategy. The video covers how to categorize KPIs and shows real applications from financial services firms.
I'm Ted Jackson. I'm one of the founders here at Clearpoint Strategy. And while we've been doing this for more than 10 years, for the 10 years prior to that we worked with Drs. Norton and Kaplan, the guys that created the balanced scorecard. This is where performance management lives. So we know KPIs inside and out and across the organization. So a KPI is a measure that you would use strategically to track the performance of your organization. And we've categorized these into four different areas. You might recognize them if you know a lot about the balanced scorecard. But those four categories are good for all types of businesses, governments and nonprofit organizations and associations. You're not going to choose all of them because you might be managing your business in a variety of ways. So just think about what's most important to you as an organization. Are you in a phase of growing your revenue? Well then you're probably going to take a KPI around revenue and tweak it for your business. Is it recurring revenue you're trying to grow? Revenue for new products that you're putting out? Is it revenue from your current customers or revenue from new customers? Even just thinking about revenue, we have five or six different measures that we could use that would all be called revenue. So when you look through Even the financial KPIs that we've listed in this blog, you're not choosing all of them, but you're using them to help brainstorm how you would modify them for the strategy of your organization. Let's take a very simple example for you. Let's look in a financial services firm, the difference between someone like E Trade and Goldman Sachs etrade down in their people measures are looking for technical people that can make user experience tools that will allow a customer to be able to operate on their own. So the processes, the process measures that they're going to focus on are going to be speed of use, speed of getting data back for them, their ability to innovate on their website. Goldman Sachs, they're looking for measurable people skills for people that can interact with others, that can schmooze those high net worth individuals. They're looking for processes like the ability to close a big deal, things like that. And then the customer measures are going to be the share of wallet of high net worth individuals that you're able to manage. And then on the finance side, they're going to be making their money on these larger transactions. So two different businesses in the same industry measuring completely different things, that's how a diverse set of KPIs like these can really help your organization. The other thing that's really helpful in this post is not just the KPIs that we've listed, the 18 KPIs or the bonus KPIs, but we've given you links to be able to download hundreds of KPIs. So when you download these KPIs, what I would strongly suggest you do is think about your strategic goals. Try to link these KPIs to the goals and interact with your leadership team. See if they have better measures than what we have here. It would be great if they did, because those better measures are going to reflect your strategy, and that's what's most important.
