Key Performance Indicators (KPIs)
# 1 – Operating Margins, EBITA, IBT
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Profitability Indicators are most important for post pandemic corporate KPI, it will determine the long-term survival of company such as profits before tax, profits before tax, and amortization or depreciation, etc.
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# 2 – Capital Expenditure (Capex) and R&D
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Most the companies have cut their capital expenditures post crisis, it includes investments from equipment, buildings, R&D, etc.?
# 3 – Liquidity
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Liquidity is vital to stay afloat, from cash, inventory or account receivables. The first lesson from crisis is to preserve cash and limit default on payments.
# 4 – Revenue forecast accuracy ?
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Most corporate and companies have cut their forecast to the market during the crisis, having said that, accuracy of forecast determine how much handle on your operations, real-time revisions on crisis, etc.
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# 5 – Exit or Write-off costs
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You need to have full analysis on how much it might cost to shut down your product, business, and geography at a given quarter. This included severance costs, equipment disposals, etc.
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# 6 – Market Share in Units and $
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In order to be able to rebound faster, stronger and with focus, market share plays a critical part for each product, service, branch, geography, etc.
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# 7 – Bidding or Tender win rate
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The success rate of how to win (or loose) tenders or bids will determine your skills in sales, marketing, quality, skills of your teams, have a handle on pricings.
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# 8 – Pricing Indicators
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The pressure on prices has come to top of discussions since most companies will change their pricing schemes to gain market share, each industry, sector, product has a different way to me
# 9 – Contract’s Terms and Conditions
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This is important because T&Cs are liability to companies and can invite litigations, bankruptcies and even jail/prison. Contract reviews, leakages can bring profitability to losing businesses.
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# 10 – New Technology Sell-Ups
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Innovations, new technology and new products/services need to be measured as factor of core business. This will gauge the success of business pipeline to stay ahead of competitors.
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# 11 – Compensation
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Unfortunately, Layoffs are one of the first actions to cut cost or reduce variable costs, having said that we have many other ways to tackle compensation lines such as furloughs (keeping employees on payroll with no limited or no salaries but with benefits).
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# 12 – Utilization and Productivity ??
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Measuring employee utilization, productivity will allow management teams to make informed decisions about where, how and how much when it is time to resize the organization.
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# 13 – Training and Development
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Unfortunately, many companies cut their training development and coaching costs with reduced activity. Having an indicator on training/development costs as % of sales, revenue, etc. is one way to measure how much damage might induce.
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# 14 – Overhead and Support Ratio
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Many companies are using the crisis to re-design, flatten or simplify their organization to reduce layers, make faster decisions, reduce management overload, etc.
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# 15 – Inventory, Spares and Maintenance
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Companies tend to believe that inventory can stay with change to top line and it’s a big mistake. Inventory is cash, same applies to spare parts, maintenance, etc. They all indicate the “health” of your organization not only financial but operational and how efficient.
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# 16 – Discretionary Spending
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This will be all other costs such as travel, legal, etc. Basically any cost that will not bring top line growth.
And Finally …
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Being a leader in turbulent times can be nerve wracking. You can overreact if you act too fact or you act too slowly, the business can go under. The world is changing in fact pace and need new breed of leadership to cope with such fast-changing world. Managers must recognize that crises affect employees differently, this means not just worrying about and providing care for their families, but also carrying for extended families and the larger communities.
The world will never be the same again. Compassion will be key to lead, manage and live!
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Business Key Performance Indicators Post Epidemic
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2020