Photo by @manuelfreiria
There is no sector in which it is possible to disregard a trivial KPI.
But let’s start by saying what a KPI is: it is a dashboard.
It is a screen, an A4 sheet, which shows the trends of a given variable that, and we will talk about this, has a decisive influence on a business.
Let’s start with a prejudicial element that divides an entrepreneurial activity from all the rest.
I can know if I’m sailing well only if I know my position and what should be the route to follow; but all this, although necessary, is not yet sufficient to make a proper business.
I need to to know, at determined temporal intervals, if I am on the course plotted and, in case I sailed away from it, how I can recover the right course.
In less nautical terms you can simply say that to do business you need to know, and so to measure, your performances especially to make strategic/operative decisions which will allow us later to achieve the goals we have set ourselves.
If I don’t have certain and traced/traceable goals, I won’t even able to change strategy if the conditions, endogenous or exogenous, require me; simply because I cannot change something I don’t have!
I speak for the automotive field, but I know that it is widespread in all fields; there is no consultant, project, activity that doesn’t have its great standard dashboard with benchmark and with index of deviation from trends for macro-regions and/or national one.
Photo by cambodia4kidsorg
If you go to the dealer of the brand X in Trento you will see it has the same monitoring of the brand x dealer in Olbia!
The reporting is identical, as if the realities (not only geographical) of each dealer don’t imply a customization of the KPI.
Therefore, I would like to underline, what today represents a limit to the growth of operators …the abuse of the KPI!
Ultimately there are a multitude of consultants and business executives with the same tool, often identical from brand to brand, that pour on the dealers with the same data and reports destroying the potential of the KPI tool.
If a series of aseptic data were enough, we wouldn’t need consultants tomorrow.
Fortunately it is not so.
Fortunately if you don’t cross several data you cannot make a proper analysis of the dealer trend; you cannot exactly show it what the guideline should be.
A high turnover data doesn’t show you nothing if not compared to the average storage rate; it still doesn’t say anything if there isn’t a market price valuation table of the stock.
But this is not enough yet because we have to check the immobilisation of capital and which vehicles have stock over certain thresholds.
Photo by Karen T2008
It isn’t enough yet because you necessarily need to go and see vehicle by vehicle why and how this stock is high…and almost always there is an objective reason; and even more often you need to cut off a finger as soon as possible to avoid cutting off your harm in a year.
The KPI pusher don’t know that, or they cannot do this…as long as there is this (premeditated) homologation there is place for who can create personalised and always changing KPI but, above all, can deeply analyse a business to proceed, immediately, with targeted and operational decisions.
It’s because a dash (KPI) is a device which can be created after a serious business analysis but, above all, apart from being personalised, it must be changeable over the time.
If a given parameter has become stationary and under control, it hasn’t sense to monitor it constantly, it would be enough to check it every three or six months or yearly; surely in the company there will be other values to be monitored more frequently!
But after having done a valid KPI, what to do operatively? Well one thing at a time, see you next post!
Translated by Federica Izzo
