Use your performace to set useful targets for your business

Use your performace to set useful targets for your business

Once you have fully measured your business performance, you need to use the research you have gathered to increase your performance levels. The best way to do this is to set performance targets in the key areas of your business that you have discovered.

Key performance indicators (KPIs), targets and business strategy

Setting performance targets can help you deliver the strategic changes that many growing businesses need to make. The top-level objectives of your strategic plan can be achieved through departmental goals, and setting targets based on KPIs is an ideal way of doing this.

For example, a company seeking to expand through its product design capabilities might target year-on-year increases in the number of patents it secures, new product launches, or licensing income. The specifics will depend on which KPIs best capture the dynamics in the market.

Setting SMART targets

Your targets should be SMART - specific, measurable, achievable, realistic and time-bound:

• Using KPIs ensures your targets will meet the first two criteria, as all KPIs should, by definition, be specific and measurable. See choosing and using key performance indicators.
• Achievable - you need to set ambitious targets that will motivate and inspire your employees. Look back at your recent performance to get a sense of what is feasible.
• Realistic - setting realistic targets means being fair on the people who will have to reach them. Make sure you only ask for performance improvements in areas that your staff can actually influence.
• Time-bound - people's progress towards a goal will be more rapid if they have a clear sense of the deadlines against which their progress will be assessed.

Assigning responsibility and resources

Once you have identified the targets you believe will deliver the strategic growth you're aiming for, assign clear responsibility for delivering each of them.

It is fine for your top-level strategic objectives to be abstract and business-wide, but your KPI targets should be concrete and clearly owned by a department or individual.

Hitting your targets is unlikely to be a cost-free process, so be ready to make the necessary resources available when needed. Also, undertake regular reviews to assist with motivation and to make changes if the progress made isn't as expected.

Using your review to set your business goals

One you have obtained adequate research into your business, you should reconsider the following questions:

• Where is the business now?
• Where is it going?
• How is it going to get there?

These questions should help you to refocus your goals and plan how you are going to reach them. At the end of any review process it's vital that work plans are prepared to put the new ideas into place and that a timetable is set.

Regularly reviewing how the new plan is working and allowing for any teething problems or necessary adjustments is important too. Today's business environment is exceptionally dynamic and it is likely that you will need regular reviews, updates and revisions to your business plan in order to maintain business success.

To find out more about deciding the right direction for your business see assess your options for growth.

Continuous improvement

In addition, a simple planning cycle can greatly enhance your ability to make changes in your business routine if necessary. Good planning helps you anticipate problems and adapt to change more easily. To read more about the planning cycle see prepare a business plan for growth.

Expert input

You may find at this stage in your business' development that you need external skills to help you with the changes you have to make. In this case you might consider:

• employing skilled consultants in areas where you cannot afford to develop in-house skills
• appointing an experienced non-executive director who can provide a regular, impartial assessment of what you are doing
• using a management consultant to help you identify how you can strengthen or change your management structure to grow the business