How can key performance indicators improve your business?

1 What are KPIs?

KPIs are measurable values that show how well you are achieving your specific goals and objectives. They help you track your progress, identify strengths and weaknesses, and make informed decisions. KPIs can be quantitative, such as the number of defects or the budget variance, or qualitative, such as the feedback from clients or the morale of the team.

2 Why use KPIs?

KPIs can improve your business in several ways. First, they can help you align your actions with your strategy and vision. By defining and communicating your KPIs, you can ensure that everyone in your organization knows what is expected and what is important. Second, they can help you evaluate your performance and learn from your results. By measuring and analyzing your KPIs, you can see what works and what doesn't, and make adjustments accordingly. Third, they can help you motivate and reward your team. By setting and celebrating your KPIs, you can acknowledge your achievements and recognize your efforts.

3 How to choose KPIs?

KPIs should be relevant, specific, measurable, achievable, realistic, and time-bound; they should also be aligned with your business goals and objectives, and reflect your key success factors. In construction management, KPIs can measure quality in terms of the percentage of defects, rework, or warranty claims. They can also measure cost by comparing the actual cost to the estimated cost or the cost performance index; time by comparing the actual duration to the planned duration or the schedule performance index; safety by tracking the number of accidents, injuries, or near misses; and customer satisfaction by rating or collecting feedback from clients or stakeholders.

4 How to measure KPIs?

Measuring and displaying your KPIs should be done regularly and consistently, using reliable and accurate data sources. Establish clear criteria and methods for collecting and reporting the data. Various tools and techniques can be used to measure and display your KPIs, such as dashboards, scorecards, and reports. Dashboards provide a visual representation of your KPIs, showing the current status, trends, and targets. Scorecards give a summary of your KPIs, showing the performance level, variance, and action plan. Reports offer a detailed analysis of your KPIs, including causes, effects, and recommendations.

5 How to improve KPIs?

KPIs should be used as a basis for continuous improvement and learning. You should review and evaluate your KPIs regularly to identify gaps and opportunities for improvement. Involving your team and stakeholders in this process is important, as their feedback and suggestions can be valuable. To improve your KPIs, you can use tools such as benchmarking (comparing to best practices or industry standards), root cause analysis (finding out the underlying reasons for performance) and action plans (developing and implementing a plan to address the issues and achieve the targets). Ultimately, by choosing, measuring, and improving your KPIs, you can enhance quality, cost, time, safety, customer satisfaction, profitability, and reputation as a construction manager.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?