Key Performance Indicators – Stay Focused For Best Results
August 01, 2012
Successful real estate decision-making, like many business processes, requires a lot of data generation, analytics, and metrics. However, that does not mean that everyone, especially presidents, CFO’s, and business unit leaders, need to know all the numbers.
Keep in mind these best practices as you communicate progress and decisions steps:
● What are the metrics that relate most to overall business decision-making? While this may be different depending on the industry, size of your firm, or the market it is operating in, there are some universal numbers everyone expects. For example square foot per person is good to know, but the overall expenditure, by month/quarter/year, will be the key number that everyone wants to know.
● Develop an easy “Dashboard” that contains the key metrics your senior management wants to see and use them each time you provide an update. Don’t make them work hard to be informed. An informative narrative can be used to bring the numbers to life and provide context. For example, each KPI should reference the following.
◦ Objective – Define the decisions and actions the dashboard must inform.
◦ Stakeholders – Who has decision-making authority.
◦ Metrics – Establish a set of KPI’s (4-6) and data points required to accomplish the objective.
◦ Data Sources – Identify the data sets necessary to generate the metrics.
◦ Data Integrity – Essential, bad data = bad decisions.
● What numbers, facts, and indicators are critical to decision-making? Don’t overwhelm with trends and analysis that are not relevant. Although you should always have these handy, it is not critical to include them in your communication.
As a guideline, when developing a set of Key Performance Indicators, consider:
● Data integrity – you can make data say anything; clear and consistent data is almost impossible to achieve. Bulk imports from business units usually have to be scrubbed, validated, and rationalized with each and every import.
● Resources – people generating quality data are often some of the best people and consume significant resources. Just because you can collect every bit of minutia with technology doesn’t mean you should – count everything and the results can be overwhelming.
● Accuracy – multiple data sources magnify inaccuracies. And, data involving alternative workplace modalities including hoteling and free-addressing, full-time contractors, part-time contractors and outsourced services can all be suspect.
If you would like thought leadership developing your company’s KPI’s, please call us.
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