The Benefits of Measuring Performance in Your Business

Editor's Note: Take a look at our featured best practice, OGSM (Objectives, Goals, Strategies, and Measures) (33-slide PowerPoint presentation). Organizations often face significant challenges in aligning their day-to-day operations with their long-term strategic goals. This issue of strategic misalignment is particularly detrimental to sectors like manufacturing, healthcare, and technology, where rapid decision-making and agility are [read more]

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Measuring performance in your business is important if you want to ensure that your business is able to grow continually and adapt to the demands of the future. There are many different aspects of your business which you may consider measuring, and these include website performance, financial performance, your environmental impact, your productivity, and the efficiency of your resources.

To measure these aspects of your business, you should consider hiring companies such as Digivante. They, for instance, can help you to measure your website’s performance and conversion rates through determining any website issues before launch, being able to live monitor your website through daily coverage, and can even test your website to ensure that it is fully optimized.

Ability to Set Targets

One of the major benefits of measuring your performance on a regular basis is so that you can set performance targets based around the aspects which you determine to be weaknesses. Once you have isolated these, you are then able to set quantifiable targets which your business can proactively work towards, rather than creating targets which may be unable to boost the success of your business. These will allow you to work specifically on the aspects of your business which are dampening your performance. You can then incorporate these targets into your business plan as a way of initiating growth and having goals which you can use as measurements of success.

Incites Progress

By measuring the performance of your business, you will be able to find methods to incite progress within your business through a number of different techniques which may currently be preventing your business from growing. Measuring performance allows you to find the weaker areas of your business, which can then be changed in order to incite progress.

For instance, measuring performance in your business can help you to find ways to cut down on your expenditure and reduce the costs of your business, reduce debt and the turnover of your employees, and improve your customer service. Customer service is, in fact, one of the largest areas that measuring performance can improve due to its ability to help you to create a higher quality experience for customers.

Change in Performance Triggers

By measuring your performance on a regular basis, you will be able to determine when there has been a change in your businesses’ performance, enabling you to remedy this as soon as possible. Not only this, but measuring performance will allow you to isolate these triggers of performance change. Once you have isolated these, this can then help you to find ways to decrease the impact of these triggers and lessen the damaging effect on your business.

Motivates Employees

Having quantifiable performance measurements can help to motivate your employees by tracking their progress and enabling them to see the results of their hard work in the success of the business. If employees are able to acknowledge that their area is falling behind on targets, this can help to encourage them to produce work of a higher quality and hold discussions to find ways to improve their areas.

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Performance Management (also known as Strategic Performance Management, Performance Measurement, Business Performance Management, Enterprise Performance Management, or Corporate Performance Management) is a strategic management approach for monitoring how a business is performing. It describes the methodologies, metrics, processes, systems, and software that are used for monitoring and managing the business performance of an organization.

As Peter Drucker famously said, "If you can't measure it, you can't improve it."

Having a structured and robust Strategic Performance Management system (e.g. the Balanced Scorecard) is critical to the sustainable success of any organization; and affects all areas of our organization.

Learn about our Performance Management Best Practice Frameworks here.