Key Performance Indicators

Performance indicators are essential tools which will tell you if your business is on target or veering off course. Using the right indicators will help you deliver the right results.

Key Performance Indicators cuts straight to the 75 KPIs that matter. It explains what key performance indicators are, gives you short overviews of each metric and describes how to use the measure effectively. There are worked examples throughout which will equip you with the skills to understand, assess and interpret the most important aspects of any business.

From net profit margin, to customer satisfaction through to brand equity, six sigma and employee engagement, the book gives you all the essential performance indicators.

A practical guide to the most powerful financial and non-financial performance indicators vital for every business.

• Part One: Financial Perspective
1. Net Profit
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
2. Net Profit Margin
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
3. Gross Profit Margin
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
4. Operting Profit Margin
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
5. EBITDA
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
6. Revenue Growth Rate
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
7. Total Shareholder Return (TSR)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
8. Economic Value Added (EVA)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
9. Return On Investment (ROI)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
10. Return On Capital Employed (ROCE)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
11. Return On Assets (ROA)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
12. Return On Equity (ROE)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
13. Debt-to-Equity (D/E) Ratio
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
14. Cash Conversion Cycle (CCC)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
15. Working Capital Ratio
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
16. Operating Expense Ratio (OER)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
17. CAPEX to Sales Ratio
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
18. Price/Earnings Ratio (P/E Ratio)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
• Part Two: Customer Perspective
19. Net Promoter Score (NPS)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
20. Customer Retention Rate
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
21. Customer Satisfaction Index
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
22. Customer Profitability Score
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
23. Customer Lifetime Value
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
24. Customer Turnover Rate
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
25. Customer Engagement
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
26. Customer Complaints
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
• Marketing and Sales Perspective
• 27. Market Growth Rate
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  28. Relative Market Share
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  29. Brand Equity
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  30. Cost per Lead
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  31. Conversion Rate
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  32. Search Engine Rankings (By Keyword) and Click-Through Rate
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  33. Page Views and Bounce Rates
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  34. Customer Online Engagement Level
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  35. Online Share of Voice (OSOV)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  36. Social Networking Footprint
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  37. Klout Score
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
• Part Four: Operational Processes and Supply Chain Perspective
• 38. Six Sigma Level
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  39. Capacity Utilisation Rate (CUR)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  40. Process Waste Level
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  41. Order Fulfilment Cycle Time (OFCT)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  42. Delivery In Full, On Time (DIFOT) Rate
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  43. Inventory Shrinkage Rate (ISR)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  44. Project Schedule Variance (PSV)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  45. Project Cost Variance (PCV)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  46. Earned Value (EV) Metric
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  47. Innovation Pipeline Strength (IPS)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  48. Return on Innovation Investment (ROI²)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  49. Time to Market
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  50. First Pass Yield (FPY)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  51. Rework Level
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  52. Quality Index
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  53. Overall Equipment Effectiveness (OEE)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  54. Process or Machine Downtime Level
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
  55. First Contact Resolution (FCR)
  • Why is this indicator important?
  • How do I measure it?
  • Cost/effort in collecting the data
  • Target setting/benchmarks
  • Tips/warnings
  • References
• Part Five: Employee Perspective
56. Human Capital Value Added (HCVA)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
57. Revenue Per Employee (RPE)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
58. Empoyee Satisfaction Index
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
59. Employee Engagement Level
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
60. Staff Advocacy Score
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
61. Employee Churn Rate
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
62. Average Employee Tenure
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
63. Absenteeism Bradford Factor
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
64. 360-degree Feedback Score
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
65. Salary Competitivness Ratio (SCR)
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
66. Time to Hire
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
67. Training Return on Investment
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
• Part Six: Corporate Social Responsibility Perspective
68. Carbon Footprint
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
69. Water Footprint
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
70. Energy Consumption
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
71. Savings Levels Due to Conservation and Improvement Efforts
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
72. Supply Chain Miles
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
73. Waste Reduction Rate
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
74. Waste Recycling Rate
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References
75. Product Recycling Rate
• Why is this indicator important?
• How do I measure it?
• Cost/effort in collecting the data
• Target setting/benchmarks
• Tips/warnings
• References

A good idea, badly executed with sloopy thinking.

Some of the examples are nearly ramblings, some of the formulas are so wrong I wonder if anyone proof-read the book. And some are so basic, an nine-year old could do better.

In short, it looks fancy at the surface, but the contents are for the most part plain stupid. Some budding manager may be able to get some value out of this, but it is a waste of space for any MBA or experienced manager.