business plan measure success

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• 27 business success metrics you should ...

27 business success metrics you should be tracking

Establishing and measuring success metrics is an important skill for business leaders to develop so that they can monitor and evaluate their team's performance. In this article, we discuss the importance of business metrics, as well as which metrics your team should track to achieve your business goals.

When you implement a new business strategy, how do you know whether or not your strategy is working? The most common way to ensure that your strategy is working is to identify success metrics before implementing your initiative.

Success metrics give your team a quantifiable way to measure your progress. By setting metric-based goals, you have the ability to gauge whether or not your strategy is successful. While there are many different goal-setting methods to choose from, measuring your progress with success metrics is a commonality between them.

What is a business success metric?

When the right metrics are properly tracked, leaders can use these metrics as a benchmark for how well the business is performing. It’s important to set the metrics before initiatives start to see progress from beginning to end.

Why are business success metrics important to track?

With an unlimited number of metrics you could be keeping track of, why should business leaders go through the effort of measuring them? Here are a few reasons why keeping an eye on your business success metrics is a good idea. 

Connect work to goals

One of the benefits of using success metrics is to connect the work that your team is doing to the goals that you want to achieve as a company. If your team is aligning their work to specific business goals, they can better prioritize the tasks they need to get done. 

Assess strategy efficacy

If you're implementing a new strategy or tactic with your team, use success metrics to gauge whether or not it's working. If you measured your team's metrics before you implemented a new strategy, you can use those metrics as a benchmark. As you implement the new strategy, you can compare those new metrics to your benchmark and see how they stack up. 

Make data-driven decisions

Similar to how you would use past metrics as a benchmark for new strategy, you can use historical data to help your team make smart business decisions.

Take a look at a specific year's metrics. Were they different than usual? What strategy did your team implement to get you those metrics? Was anything happening during that time that you can reflect on? Use these numbers to make decisions on how to move forward in the future so you can make more educated decisions.

Identify weak points in your strategy

If you're measuring many different metrics, and you notice a dip in one, you can easily pinpoint what part of your strategy is lagging behind. This can give your team the opportunity to adjust their strategy for the next initiative.

Example business success metrics by team

Each team in your business is there to achieve a different goal, so it only makes sense for different teams to have different success metrics. Here are a few examples of success metrics by team.

General business metrics

Gross profit margin : Gross profit margin is measured by subtracting the cost of goods sold from the company's net sales.

Return on investment (ROI) : The ratio between the income and investment. ROI is commonly used to decide whether or not an initiative is worth investing time or money into. When used as a business metric, it often tracks how well an investment is performing. 

Productivity : This is the measurement of how efficiently your company is producing goods or services. You can calculate this by dividing the total output by the total input. 

Total number of customers : A simple but effective metric to track. The more paid customers, the more money earned for the business.

Recurring revenue : Commonly used by SaaS companies, this is the amount of revenue generated by all of your current active subscribers during a specific period. It's commonly measured either monthly or annually.

Marketing metrics

Daily web traffic users : This is the number of users that visit your website daily.

New web traffic users : This is the number of users that visit your website who have never visited your website before.

Email open rates : This metric is particularly important for email marketing teams. Email open rates measure the percentage of your audience who has opened your marketing email.

Number of leads generated : Particularly good for the marketing teams that work cross-functionally with sales, this metric measures the number of qualified leads that marketing team generated and passed over to the sales team. Note that the definition of a qualified lead can vary depending on your team's goals.

Customer success metrics

Net promoter score (NPS) : This metric is one of the most common measurements of customer loyalty and satisfaction and is sometimes referred to as a customer satisfaction score. It's a numerical value in response to the question, "How likely is it that you would recommend [your product or service]?" You can calculate NPS by subtracting the percentage of individuals who voted between 0-6 from the percentage of individuals who voted 9-10. 

Customer retention rate : This metric measures how many of your customers remain  customers over a set period of time. It's up to your team to determine what timeframe makes sense for your business and industry.

Customer churn rate : This is the opposite of the retention rate. Customer churn rate measures how often your customers stop doing business with your company. It's up to your team to determine what period of time makes the most sense for your business and industry.

Customer feedback: While not a quantitative measure, anecdotal customer feedback can be extremely valuable to your company and can be used for testimonials and marketing strategy. Your customer experience is something that your team can curate, and the better experience they have the longer they stay a customer.

Average customer lifetime: This is the average length in which a customer stays your customer. This metric is used to calculate customer lifetime value.

Customer lifetime value (CLV or LTV): This is the amount of profit a company expects to earn from a specific customer over the average lifetime of a customer relationship.

Sales metrics

Qualified leads: A qualified lead is an individual who exhibits all of the characteristics that your team identifies as the ideal individual to sell to. This could include demographic, role, company size, or any other important qualities.

Lead to customer conversion rates: This is a good metric to identify because it can give both your sales and marketing team some insight to the audience you're targeting. If the conversion rate is high, you're targeting the right audience and your team is focusing on the right priorities. Low conversion rates indicate that potential customers are leaving somewhere in the pipeline.

Customer acquisition cost : This is how much your team spends on both marketing and sales strategies to convert a lead into a customer. Ideally, you want this number to be as close to zero as possible.

Total new customers : Tracking this metric can give you an indicator on how quickly your customer base is growing.

Developer metrics

Product uptime : This metric measures the time that your software is working over a given period of time. 

Bug response time : This is how quickly your team takes to identify a bug, find a patch solution, and push the fix into production. Issues can range from quick, five-minute fixes to full-fledged projects.

Daily active users : This is the number of users that use your software daily. This can help you understand how many of your customers actually use and value your software. If there is  a large gap between the number of customers and the number of daily active users, then your customers may not be finding value in your product.

Cycle time : The time it takes for a specific project to go from the very beginning to implementing the strategy into production. This is good to measure because it can help project managers get a sense of how long certain projects will take.

Throughput : The measure of total work output a specific team develops. This includes anything that is ready to QA and push into production.

Human resource metrics

Employee satisfaction: Similar to a net promoter score, an employee satisfaction score indicates how likely your employees would recommend your company as an employer to a friend or colleague. This is an important metric for HR teams because it can surface issues with company culture and policies that can be resolved.

Employee retention rate: Similar to a customer retention rate, employee retention rate measures how many of your employees stay with your company over a determined period of time. This is often measured annually. 

Employee feedback: Anecdotal employee feedback is just as valuable as customer feedback, if not more so. Employee feedback gives your team the opportunity to offer suggestions to help your company become a better employer, and in turn, increase employee retention rate.

Connect your team's work to metrics with Asana

More likely than not, your team’s work directly contributes to one or more key success metrics. But without a clear way to connect daily work to larger goals, team members can lack clarity on what to prioritize. Instead, track work and measure metrics all in one place with Asana. Asana helps you connect the work your team is doing to the goals you set so you can achieve them together.

Related resources

What are objectives and key results (OKRs)?

Fix these common onboarding challenges to boost productivity

How Asana uses work management to optimize resource planning

How Asana uses work management for organizational planning

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How to Measure Your Business Performance

• 14 Nov 2023

Measuring your business’s performance is essential to its long-term success. By assessing its operations, you can make informed decisions, find ways to improve, and establish accountability in the workplace .

Despite these benefits, many businesses struggle to use the vast amounts of data they have access to. According to a report by data storage company Seagate , businesses act on just 32 percent of the data available to them—with the remaining 68 percent going unleveraged.

If you want to help your organization achieve its strategic objectives, here’s why it’s vital to measure business performance and how to do it.

Access your free e-book today.

Why Measure Your Business Performance?

Measuring business performance is critical to ensuring effective strategy formulation and implementation . It can also help identify obstacles and setbacks that impact your company’s success—similar to risk management .

According to the online course Strategy Execution , performance measurement comprises the formal, information-based routines and procedures managers use to maintain or alter patterns in organizational activities.

Engaging in performance measurement helps you and organizational leaders , investors, and employees understand how your roles and responsibilities relate to your business’s strategy—creating a culture of accountability and commitment to achieving its goals and objectives .

How to Measure Business Performance

Long-term business success doesn’t just result from effective strategy execution; it also relies on a holistic approach to monitoring, measuring, and evaluating performance. This involves creating objective and subjective measures—often called key performance indicators (KPIs) .

While objective measures—like revenue and profit margin—are crucial to assessing performance, subjective measures are often overlooked.

“If a measure is objective, you can independently verify it,” says Harvard Business School Professor Robert Simons, who teaches Strategy Execution . “You and I could look at the same set of data and draw the same conclusion. A subjective measure, by contrast, requires judgment.”

For example, measuring employee engagement can help gauge the amount of internal support for your business strategy. High employee engagement can also greatly impact your company’s bottom line—increasing profitability by up to 23 percent .

“These measures work well only when there's a high degree of trust between employees and managers,” Simons says in Strategy Execution . “Employees must feel confident that subjective measures are applied fairly.”

Using diagnostic control systems —information systems managers use to monitor organizational outcomes and correct negative performance—you can ensure consistency and standardization when measuring success.

Examples of diagnostic control systems include:

• Performance scorecards
• Project monitoring systems
• Human resources systems
• Standard cost-accounting systems

Before implementing such systems and measuring your business performance, here are three factors to consider.

3 Considerations When Measuring Business Performance

1. financial goals.

Measuring business performance starts with financial goals. This is largely because your company’s financial value is its first indicator of success or failure. Financial goals also help ensure your diagnostic control systems effectively monitor profitability and provide insight into how to fix problems.

To set financial goals, you can use a profit plan —a summary of a specific accounting period’s anticipated revenue inflows and expense outflows—presented in the form of an income statement . Profit plans serve several purposes; their most important is creating control systems that place responsibility on management.

“Individual managers can be held accountable for achieving specific revenue and expense targets and the overall profitability of the business,” Simons says in Strategy Execution .

To confirm that your profit plan holds you and others accountable for your organization’s financial health , Simons suggests asking the following:

• Does the business create enough profit to cover costs and reinvest in future endeavors?
• Does the business generate enough cash to remain solvent through the year?
• Does the business create sufficient financial returns for investors?

“Once managers have completed the profit planning process,” Simons says, “people throughout the organization will be in agreement about the direction of the business and the assumptions that underpin the forecasts.”

Related: 7 Financial Forecasting Methods to Predict Business Performance

2. Non-Financial Goals

While financial metrics are critical to assessing short-term profitability, non-financial goals can impact your business’s long-term success.

Objectives like improving customer satisfaction, boosting employee engagement, and enhancing ethical practices can all drive business performance—even financially.

“An organization that's focused just on financial goals will rarely achieve those goals for a long period of time,” says Tom Polen, CEO and president of medical technology company Becton Dickinson, in Strategy Execution . “It's all the other goals that are going to feed into the financial goals.”

In the course, Polen says he consistently communicates his organization’s strategic objectives to employees and uses an incentivization system to reward those working to support non-financial goals.

“As a health care provider, the most important thing—bar none—is quality,” Polen says. “While we’re focused on financial goals, our quality goals—which cut across manufacturing, regulatory, marketing, and medical—contribute to making sure that we have quality products at the end of the day. And we’ll never sacrifice a quality goal for a financial goal.”

3. Intangible Assets

Your goals aren’t the only thing you can use to measure your company’s performance. Intangible assets—non-physical assets your business significantly values—can also help.

Examples of intangible assets include:

• Research capabilities
• Brand loyalty
• Customer relationships

“These are among the most valuable assets in many of today's businesses,” Simons says in Strategy Execution . “But you won't find them anywhere on an income statement or balance sheet .”

Since you can’t monitor these assets using traditional accounting systems, you can instead use a balanced scorecard —a tool designed to help track and measure non-financial variables.

“The balanced scorecard combines the traditional financial perspective with additional perspectives that focus on customers, internal business processes, and learning and development,” Simons says in Strategy Execution . “These additional perspectives help businesses measure all the activities essential to creating value.”

For example, if your business strategy focuses on improving an intangible asset, like brand loyalty, you can use a balanced scorecard to track customer satisfaction through surveys and reviews.

In this way, the balanced scorecard offers a comprehensive view of business performance, helping you make informed decisions to protect and enhance intangible assets’ value.

Start Measuring Your Business Performance

Measuring business performance doesn’t have to be difficult. By implementing the appropriate metrics and control systems, you can seamlessly track strategic initiatives’ progress.

By enrolling in an online course, such as Strategy Execution , you can be immersed in a dynamic learning experience featuring real-world examples of businesses that have employed performance measurement strategies to secure long-term success.

Do you need help measuring your business performance? Explore Strategy Execution —one of our online strategy courses —and download our e-book to discover how to think like a top strategist.

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How to make a business plan

Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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How to Set and Use Milestones in Your Business Plan

12 min. read

Updated March 4, 2024

As a new business owner, there are fewer more exciting moments than seeing your big idea come to life as you open your door (or website) to customers for the first time.

But are you ready for what comes next? 

Mapping out each step of your business’s evolution – from early planning to long-term growth planning – is just as important as knowing what your value proposition is, or who your target customers are. That makes milestone planning a crucial part of your business plan.

After all, you can’t achieve your vision for the business without understanding the steps and resources required to get there. Adding milestones in a business plan helps keep your business on track and ensures progress toward your goals.

In this article, we’ll discuss the importance of milestones in business planning, how to create effective milestones, examples of common business goals, the difference between goals, objectives, and milestones, and tips for managing your milestones effectively.

Why do you need milestones in your business plan?

The Milestones table is one of the most important in your business plan. It sets the plan into practical, concrete terms, with real budgets, deadlines, and management responsibilities. It helps you focus as you are writing your business plan, and helps you implement your plan as you grow your business.

Milestones put some bite into your plan and management strategy by listing specific actions to be taken. Each action becomes a milestone. This is where a business plan becomes a real plan, with specific and measurable activities, instead of just a document.

Milestones play a key role in your business plan for several reasons:

Tracking progress

Milestones help measure progress towards objectives, keeping your business on course.

Encouraging accountability

Milestones make team members responsible for their progress, keeping everyone focused on the goals.

Promoting adaptability

Regularly reviewing milestones lets you identify areas for improvement and adjust your strategy as needed.

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Enhancing communication

Sharing milestones with your team and stakeholders keeps everyone informed about your progress and fosters a sense of shared commitment.

What to include in each milestone?

Set as many milestones as you can think of to make it more complete. Give each milestone the following:

• Milestone name
• Person responsible

These represent what milestone you’re aiming for, when you expect to get there, what resources are required, and who the main stakeholders are for that milestone.

Then, make sure that your team knows that you will be following the plan, tracking the milestones, and analyzing the plan-vs-actual results. If you don’t follow up, your plan will not be implemented.

Examples of common business milestones

Here are some examples of typical business goals you might include in your business plan milestones:

Product development milestones

• Completing product design and prototype
• Finalizing product specifications
• Securing intellectual property rights
• Launching manufacturing processes
• Introducing the product in the market

Sales and marketing milestones

• Developing a marketing plan
• Establishing a sales team or distribution network
• Achieving specific customer or sales revenue goals
• Expanding market reach to new regions or demographics
• Attaining a target market share percentage

Financial milestones

• Securing funding or investment
• Achieving break-even or profitability
• Reaching specific revenue or net income targets
• Reducing operating costs or increasing profit margins
• Boosting the company’s valuation

Operational milestones

• Hiring key team members or filling essential positions
• Implementing new technology or software systems
• Establishing partnerships or collaborations

How to create effective business milestones

Here are some steps to create concrete, actionable business plan milestones:

1. Identify your goals and objectives

Outline your business’s main goals and objectives, such as growth, profitability, and market expansion. These will guide your milestone planning.

2. Break goals into smaller steps

Divide your goals into smaller, achievable steps. These smaller steps will form the basis for your business plan milestones.

3. Be specific, measurable, and achievable

Your milestones should be specific, measurable, and achievable. Use clear metrics to measure progress and ensure your milestones are realistic.

4. Align milestones with your business strategy

Make sure your business plan milestones align with your overall strategy. Each milestone should contribute to your long-term vision and strategic objectives.

5. Set timelines for milestones

Establish a timeline for completing each milestone, including start and end dates. Be prepared to adjust your timeline if needed.

6. Monitor progress and adjust as necessary

Regularly review your progress toward each milestone and make adjustments as needed.

7. Communicate your milestones

Share your milestones with your team and stakeholders to ensure alignment with your company’s goals and objectives.

Common metrics to track in your business milestones

Selecting the right metrics to track in your business milestones is important to accurately gauge your progress.

There are several common metrics that businesses of all sizes use when determining if they’re progressing toward their milestones. Some of them can sound intimidating at first. But don’t worry, they’re concepts that you can grasp with a bit of reading and an understanding of your company’s financials.

You can check out this resource guide to learn more about a wider range of business metrics you may want to track over time. But here are a few metrics that are likely to be important regardless of the type, size, or stage of business:

• Customer acquisition cost (CAC): CAC is the average cost of acquiring a new customer. It includes expenses related to marketing, sales, and any other costs associated with gaining new customers. Monitoring CAC helps you assess the efficiency of your marketing and sales efforts and adjust your strategies accordingly.
• Monthly recurring revenue (MRR): For subscription-based businesses, MRR is an essential metric that tracks the total recurring revenue generated each month. MRR helps you monitor the health of your subscription business and identify trends in revenue growth or decline.
• Customer lifetime value (CLV): CLV represents the total revenue a customer generates for your business throughout their entire relationship with your company. Tracking CLV can help you determine the long-term value of your customers and inform your marketing, sales, and customer retention strategies.
• Churn rate: Churn rate measures the percentage of customers who cancel or do not renew their subscriptions within a given period. Monitoring churn rate helps you identify issues with customer satisfaction, product quality, or pricing, and take action to improve customer retention.
• Gross margin: Gross margin is the percentage of revenue remaining after accounting for the cost of goods sold (COGS). A healthy gross margin indicates that your business can cover its operating expenses and generate a profit. Tracking gross margin can help you identify opportunities to reduce costs or increase pricing to improve profitability.
• Burn rate: Burn rate refers to the rate at which your business spends money, typically measured monthly. Monitoring burn rate helps you understand how long your current funding will last and when you may need additional investment or revenue to sustain your business.
• Conversion rate: The conversion rate is the percentage of potential customers who take a desired action, such as making a purchase or signing up for a newsletter. Tracking conversion rates helps you assess the effectiveness of your marketing campaigns and make improvements to boost sales.
• Revenue growth rate: Revenue growth rate measures the increase in revenue over a specific period, indicating the pace at which your business is growing. Monitoring revenue growth rate can help you set realistic growth expectations and identify trends that may impact your business’s future performance.

The difference between goals, objectives, and milestones

Understanding the distinctions between goals, objectives, and milestones is crucial for effective milestone planning. Here’s a brief overview of these concepts:

• Goals: Goals are broad, long-term, and often qualitative aspirations that your business aims to achieve. They provide a general sense of direction and purpose for your organization. Examples of goals include increasing brand awareness, becoming an industry leader, or providing exceptional customer service.
• Objectives: Objectives are specific, measurable, and time-bound targets that support the achievement of your goals. They are more quantifiable and detailed than goals and serve as stepping stones toward fulfilling your broader aspirations. Examples of objectives include increasing sales by 15% within a year or reducing customer churn rate by 5% in six months.
• Milestones: Milestones are significant events or achievements that mark the completion of a specific objective or a major step towards your goals. They help you track progress and measure the success of your efforts. Examples of milestones include launching a new product, reaching a specific revenue target, or signing a partnership agreement with a key industry player.

What are essential business milestones to hit within the first year

Some milestones are especially important to achieve within your first year of operation:

Establishing a solid customer base: In your first year, one of your primary milestones should be to attract and retain a solid customer base. This involves identifying your target market, developing strategies to reach them effectively, and implementing customer retention practices. Customer acquisition and retention metrics can help you assess your progress. Achieving this milestone is indicative of market validation for your product or service and can also help secure additional funding.

Developing and refining your product or service offerings: Another critical milestone is the continuous refinement of your products or services based on customer feedback and market trends. This includes launching your minimum viable product (MVP), gathering feedback, and iteratively improving upon it. It’s also about ensuring that your product or service remains relevant and competitive. Hitting this milestone shows adaptability and customer focus, qualities that stakeholders appreciate.

Generating a positive cash flow: Achieving positive cash flow is a key financial milestone for your first year in business. Positive cash flow means that the business’s revenues exceed its expenses over a certain period, which can contribute to the financial stability of the business. To reach this milestone, you might focus on strategies to increase sales, reduce costs, or improve collection of receivables.

Building a strong brand and online presence: This involves creating a recognizable brand identity that resonates with your target audience, and developing a robust online presence through a user-friendly website and active social media channels. These efforts can drive customer engagement, generate leads, and establish your credibility in the marketplace. Achieving this milestone can indicate your business’s potential for long-term growth and success.

Establishing efficient operational processes: In your first year, it’s important to develop efficient systems for daily operations, including sales processes, customer service procedures, and supply chain management. This will help your business run smoothly, improve customer satisfaction, and reduce costs. Successfully hitting this milestone signifies that your business is well-organized and capable of scaling up.

• The importance of setting realistic milestones

Setting realistic milestones is important for maintaining consistency, ensuring steady progress and preventing burnout within your team. Unrealistic or overly ambitious milestones can lead to frustration, disappointment, and loss of momentum. To set realistic milestones:

Evaluate your resources: Assess your available resources, such as finances, personnel, and time, and ensure your milestones align with your capabilities.

Learn from past experiences: Review your previous projects or similar industry experiences to gain insights into what is achievable within a given timeframe.

Break down objectives into smaller tasks: Divide larger objectives into smaller, manageable tasks that can be completed within a reasonable timeframe.

Remain flexible: Understand that circumstances may change, requiring adjustments to your milestones. Be prepared to adapt your plan as needed.

• How to prioritize milestones in a business plan

Prioritizing milestones effectively can help you allocate resources efficiently, focus on the most critical tasks, and drive your business towards success. Here are some tips for prioritizing milestones in your business plan:

Align with strategic priorities: Ensure that your milestones are closely aligned with your strategic priorities and focus on tasks that contribute significantly to your overall business goals.

Assess the impact on your business: Evaluate the potential impact of each milestone on your business’s growth, revenue, and reputation. Prioritize milestones that have the most significant potential benefits.

Consider dependencies: Identify any dependencies between milestones and ensure that they are prioritized accordingly. Some tasks may need to be completed before others can begin or have a more significant impact on subsequent milestones.

Balance short-term and long-term milestones: Prioritize a mix of short-term and long-term milestones to maintain momentum and demonstrate progress while still working towards your larger goals.

Regularly re-evaluate priorities: Periodically reassess your priorities and adjust your milestone plan as necessary based on new information, changing circumstances, or shifts in your business strategy.

• Prepare to manage your business milestones

Incorporating business milestones into your business plan is not only crucial for monitoring progress and ensuring accountability. It also serves as a valuable tool for managing your business growth. As you navigate the process of devising and implementing milestones, remember to maintain open lines of communication, foster adaptability, and monitor progress frequently.

By embracing these strategies, you’ll be better equipped to manage your milestones effectively and keep your business on course toward achieving its goals.

Frequently Asked Questions

What are business milestones?

Business milestones are significant events or achievements that mark the completion of a specific objective or a major step towards your goals. They serve as checkpoints to track progress and measure the success of your efforts. Examples of milestones include launching a new product, reaching a specific revenue target, or signing a partnership agreement with a key industry player.

What is a milestone table for a business plan?

The Milestones table is one of the most important in your business plan. It sets the plan into practical, concrete terms, with real budgets, deadlines, and management responsibilities. It helps you focus as you are writing your business plan, and then, the Milestones table and plan-vs.-actual management analysis helps you implement your plan as you grow your business.

Why are business milestones important?

Incorporating milestones into your business plan helps you:

Monitor progress: Milestones enable you to track your progress towards your goals, ensuring that you stay on track and adjust your strategies as needed. Ensure accountability: By setting clear milestones, you hold yourself and your team accountable for achieving specific objectives. Communicate expectations: Clearly defined milestones help your team understand what’s expected of them and what they need to achieve. Manage resources: Milestones help you allocate resources efficiently by prioritizing tasks that are most critical to your business’s success.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• Why you need to track milestones
• What to include
• Examples of business milestones
• How to create business milestones
• Common metrics to track
• Differences in goals, objectives, and milestones
• First year milestones to hit

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• Measuring Success: Key Metrics for Evaluating Your Business Plan

• Jean R Gunter
• 3.2k Comments

Every business venture begins with a vision and a plan to turn that vision into reality. However, the true measure of a business's success lies in its ability to execute that plan effectively and achieve its goals. In the world of entrepreneurship, metrics serve as the compass that guides decision-making, allowing you to track progress, identify areas of improvement, and ultimately gauge the success of your business plan. In this comprehensive guide, we will explore the essential key metrics that can help you evaluate the effectiveness of your business plan and drive your venture towards sustained success.

1. Defining Success Metrics: Aligning with Your Goals

Before delving into specific metrics, it's crucial to define what success means for your business. Success metrics should be directly aligned with your business goals and objectives. Are you aiming for rapid revenue growth, market share dominance, customer acquisition, profitability, or a combination of these factors? Clear alignment ensures that your metrics accurately reflect the outcomes you want to achieve.

2. Financial Health and Performance Metrics

Financial metrics are among the most critical indicators of a business's overall health and performance. These metrics offer insights into your revenue generation, cost management, and financial sustainability. Key financial metrics include:

• Revenue: Measure your total income from sales and services. Analyze how your revenue is growing over time and whether it's meeting your projections.
• Gross Profit Margin: Calculate the percentage of revenue that remains after deducting the cost of goods sold (COGS). A healthy gross profit margin indicates efficient production and pricing strategies.
• Net Profit Margin: Determine the percentage of revenue that remains after all expenses, including operating costs, taxes, and interest. A positive net profit margin indicates profitability.
• Cash Flow: Track your cash inflows and outflows to ensure you have enough liquidity to cover expenses and investments.
• Burn Rate: Assess the rate at which your startup is using up its cash reserves. A sustainable burn rate is crucial for long-term viability.

3. Customer Acquisition and Retention Metrics

Customers are the lifeblood of any business, and metrics related to customer acquisition and retention shed light on your ability to attract and retain a loyal customer base. Relevant customer metrics include:

• Customer Acquisition Cost (CAC): Calculate the cost of acquiring a new customer. Ensure that your CAC is lower than the lifetime value of a customer (LTV) to ensure profitability.
• Customer Lifetime Value (LTV): Estimate the total value a customer brings to your business over their entire relationship with your company.
• Churn Rate: Measure the rate at which customers cancel or stop using your product or service. A high churn rate may indicate issues with product satisfaction or customer support.
• Customer Satisfaction (CSAT) and Net Promoter Score (NPS): Survey customers to gauge their satisfaction and likelihood to recommend your business to others. Higher scores indicate strong customer loyalty and advocacy.

4. Operational Efficiency and Productivity Metrics

Operational metrics provide insights into how efficiently your business is functioning and how well you're utilizing your resources. These metrics help you identify areas for improvement and streamline your operations. Key operational metrics include:

• Inventory Turnover: Measure how quickly your inventory is being sold and replaced. A higher turnover indicates efficient inventory management.
• Days Sales Outstanding (DSO): Calculate the average number of days it takes to collect payments from customers. Lower DSO values indicate effective credit and collections processes.
• Employee Productivity: Assess the productivity of your workforce by measuring output per employee or revenue generated per employee. This metric highlights efficiency and resource allocation.

5. Market Penetration and Growth Metrics

Market penetration and growth metrics evaluate your business's progress in expanding its presence within the market. These metrics demonstrate your ability to capture new customers and increase your market share. Relevant metrics include:

• Market Share: Measure your business's portion of the total market sales or customers. Growing market share indicates successful competition and increased brand recognition.
• Customer Growth Rate: Calculate the rate at which your customer base is expanding. Rapid growth suggests strong demand and effective marketing strategies.
• Repeat Purchase Rate: Determine the percentage of customers who make repeat purchases. A high repeat purchase rate signifies strong customer loyalty and satisfaction.

6. Innovation and Product Development Metrics

For businesses focused on innovation and product development, metrics related to your offerings and their impact are crucial. These metrics help you assess the success of your products and adapt to market changes. Key innovation metrics include:

• New Product Adoption Rate: Measure the speed at which customers adopt new products or features. A rapid adoption rate indicates strong market demand.
• Time-to-Market: Evaluate the time it takes to develop and launch a new product or feature. Faster time-to-market allows you to capitalize on opportunities more effectively.

7. Customer Engagement and Interaction Metrics

Engagement metrics provide insights into how effectively you're engaging with your customers through various channels. These metrics help you measure the impact of your marketing and customer interaction efforts. Key engagement metrics include:

• Website Traffic and Pageviews: Monitor the number of visitors to your website and the pages they visit. Increased traffic suggests successful online marketing and content strategies.
• Conversion Rate: Calculate the percentage of visitors who take a desired action, such as making a purchase or signing up for a newsletter.
• Social Media Engagement: Measure likes, shares, comments, and other interactions on your social media platforms. Higher engagement indicates an active and interested audience.

8. Flexibility and Adaptability Metrics

In a rapidly changing business landscape, the ability to adapt and pivot is crucial for long-term success. Flexibility and adaptability metrics help you assess your capacity to respond to market shifts. Key metrics include:

• Pivot Rate: Measure the frequency with which your business pivots its strategies, products, or target markets. A higher pivot rate may indicate a proactive response to changing conditions.
• Innovation Ratio: Evaluate the ratio of resources allocated to innovation and new product development compared to existing operations. A balanced innovation ratio ensures continuous growth and evolution.

9. Sustainability and Impact Metrics

As businesses increasingly focus on sustainability and social impact, metrics related to environmental and societal contributions are gaining prominence. These metrics help you showcase your commitment to responsible business practices. Relevant metrics include:

• Environmental Impact: Measure your carbon footprint, waste reduction, and resource consumption. Showcase your efforts to minimize your environmental impact.
• Social Impact Metrics: Assess the positive social contributions your business makes, such as job creation, community engagement, and support for social causes.

10. Continuous Improvement and Feedback Loop

The process of measuring success doesn't end with analyzing metrics. Use the insights gained from these metrics to drive continuous improvement and refine your business strategies. Regularly revisit your business plan, assess your metrics, and make informed adjustments based on your findings. By maintaining a feedback loop, you ensure that your business remains adaptable, responsive, and positioned for sustained growth.

Conclusion: Beyond Numbers, Toward Holistic Success

Evaluating your business plan's success goes beyond crunching numbers; it involves a comprehensive understanding of your business's performance across various dimensions. The metrics you choose to track are a reflection of your priorities, goals, and long-term vision. By measuring success through a holistic lens and continually striving for improvement, you position your business to thrive, innovate, and make a meaningful impact in an ever-evolving marketplace. As you embark on the journey of measuring success, remember that every

Power of choice is untrammelled and when nothing prevents our being able to do what we like best, every pleasure is to be welcomed and every pain avoided. But in certain circumstances and owing to the claims of duty or the obligations of business it will frequently occur that pleasures have to be repudiated and annoyances accepted. The wise man therefore always holds in these matters to this principle of selection.

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Introduction

In today's highly competitive business landscape, it is critical to have a clear understanding of how your business is performing. Measuring business performance allows you to identify your strengths and weaknesses so you can optimize operations and achieve better results. This guide provides an overview of business performance measurement, including why it is important, what metrics to consider, and how to use data-driven insights to make informed decisions.

The Importance of Measuring Business Performance

Measuring business performance is crucial for several reasons:

• It helps you identify areas where your business is doing well and areas where improvement is needed
• It provides insights into customer satisfaction and loyalty
• It highlights operational efficiencies and inefficiencies
• It helps you set goals and track progress towards achieving them
• It guides decision-making based on data-driven insights rather than assumptions or guesswork

Overview of the Guide

This guide is designed to provide you with a comprehensive understanding of business performance measurement. It will cover:

• The importance of measuring business performance
• The different metrics you should consider when measuring business performance
• How to interpret and analyze data to gain insights into your business
• Examples of how businesses have used performance measurement to drive growth and success
• Best practices for implementing a performance measurement strategy in your organization

Why Measure Business Performance?

Measuring business performance is crucial for any organization to ensure ongoing success and growth. The process of measuring business performance involves regularly collecting and analyzing data to determine the effectiveness of the company's strategies and operations. It provides valuable insights into the company's strengths and weaknesses and helps identify areas for improvement.

Benefits of Measuring Business Performance

The benefits of measuring business performance include:

• Identifying areas for improvement: Measuring business performance helps identify inefficiencies and areas that require improvement. By analyzing data on key performance indicators (KPIs) such as revenue, customer satisfaction, and employee productivity, businesses can pinpoint specific areas that need attention and develop strategies to address them.
• Making data-driven decisions: Measuring performance allows companies to make data-driven decisions. By tracking KPIs, businesses can evaluate the impact of their strategies and make adjustments accordingly. This ensures that decisions are based on factual information rather than assumptions or guesses.
• Setting goals and benchmarks: Measuring business performance helps businesses set goals and benchmarks to strive for. By establishing targets based on historical performance, companies can track progress and measure success against these goals.
• Improving overall performance: Measuring business performance allows businesses to identify strengths and weaknesses and implement strategies to maximize performance. By continuously monitoring and adjusting performance, companies can improve overall efficiency, profitability, and growth.

Overall, measuring business performance is essential for any business looking to improve and grow. By collecting and analyzing data on key performance indicators, companies can identify areas for improvement, make data-driven decisions, set goals, and improve overall performance.

Key Performance Indicators (KPIs)

Key Performance Indicators, or KPIs, are quantifiable measures used to evaluate the success of an organization or specific activity. KPIs can provide insight into a company's progress towards achieving its goals, as well as highlight areas that may need improvement.

Defining KPIs

Defining KPIs is an important step in measuring business performance. The first step is to identify business objectives and determine how success will be measured. Once KPIs have been identified, it is important to establish a baseline and set targets for improvement. This process may vary depending on the industry and specific goals of the organization.

Examples of Common KPIs in Different Industries

• Retail: Average transaction value, inventory turnover, sales per square foot, customer retention rate.
• Manufacturing: Production cycle time, defect rate, customer satisfaction, employee turnover rate.
• Healthcare: Patient satisfaction, readmission rate, average length of stay, revenue per patient.
• Financial Services: Return on investment, net promoter score, customer acquisition cost, total revenue.

These are just few examples of KPIs for different industries, but the list can go on depending on specific goals of the organization and industry. Accurately defining and monitoring KPIs can greatly help organizations improve their performance and achieve their business objectives.

Tools for Measuring Business Performance

One of the keys to achieving success in any business is to have a clear understanding of its performance. The ability to track and measure performance indicators is essential for identifying strengths, weaknesses, and opportunities for growth.

Here are some tools that can be used to track and measure business performance:

• Spreadsheets: Many businesses use spreadsheets, such as Microsoft Excel, to track their performance metrics. This can be a useful tool for small businesses or those just starting out, as it is often readily available and easy to use.
• Dashboards: A dashboard is a visual representation of key performance indicators. It provides a quick and easy way to see how a business is performing at a glance. Dashboards can be created using software such as Tableau, Microsoft Power BI, or Google Data Studio.
• Analytics Software: Analytics software, such as Google Analytics or Adobe Analytics, can be used to track website and marketing performance. This software can provide in-depth insights into website traffic, user behavior, and conversion rates.

By using these tools to track and measure business performance, companies can make data-driven decisions that lead to increased efficiency and profitability.

How to Set Targets and Goals

Setting targets and goals is essential for determining the success of your business. Without them, you won't be able to measure your performance and determine whether you're on track to achieving your objectives. In this section, we will discuss how to set targets and goals for your key performance indicators (KPIs) and ensure they're SMART (specific, measurable, achievable, relevant, and time-bound).

Step 1: Identify Your KPIs

The first step in setting targets and goals is to identify your KPIs. KPIs are the metrics that you will use to track the performance of your business. They should be tied directly to your objectives and should be relevant to your business. Some common KPIs include revenue, sales growth, customer retention, and website traffic.

Step 2: Make Your Goals Specific

Once you've identified your KPIs, you need to make your goals specific. Specific goals are more useful than general ones, as they give you a clear direction of what you want to achieve. For example, if you want to increase revenue, you might set a specific goal of increasing revenue by 10% in the next quarter.

Step 3: Make Your Goals Measurable

Next, you need to make your goals measurable. Measurable goals allow you to track your progress and determine when you've achieved your objective. You can measure your goals in a number of ways, including through revenue, customer satisfaction, or website traffic.

Step 4: Make Your Goals Achievable

It's important to ensure that your goals are achievable. Setting unrealistic goals can be demotivating and may lead to disappointment. Make sure that your goals are challenging but attainable with the resources at your disposal.

Step 5: Make Your Goals Relevant

Your goals should be relevant to your business objectives. Setting goals that are not aligned with your overall business strategy can be a waste of resources. Make sure that your goals are tied to your company's mission and vision.

Step 6: Make Your Goals Time-Bound

Finally, you need to make your goals time-bound. Setting a deadline for achieving your objectives can provide motivation and help you stay on track. Make sure that you give yourself enough time to achieve your goals, but also ensure that they're not open-ended.

Setting targets and goals is a crucial part of measuring business performance. By following these steps and ensuring that your goals are SMART, you can achieve success and growth for your business.

Using Data to Improve Business Performance

Business performance can be measured and improved by utilizing data effectively. In the era of big data, it is important to understand how to analyze and interpret data to gain insights that can help a business grow. Data can help identify areas for improvement, such as inefficiencies, weaknesses, or missed opportunities. Additionally, data can help make informed decisions by providing evidence-backed insights.

Identifying Areas for Improvement

The first step in improving business performance with data is to identify the areas that need improvement. This can be done by analyzing trends and making comparisons between different sets of data. For example, comparing sales data between two different time periods can help identify areas that need improvement, such as low-performing products or ineffective marketing strategies. Moreover, analyzing customer feedback can help identify gaps in customer service or product offerings.

Once the areas for improvement are identified, businesses can create action plans to address these areas. By incorporating data-backed insights, businesses can be confident that they are addressing the issues that will drive the most significant improvements.

Making Data-Driven Decisions

Effective data analysis can help businesses make informed decisions. Data can provide reliable evidence that can support critical decisions, such as new product development, market expansion, or strategic partnerships. Utilizing data to make decisions can help increase the chances of success, as it provides quantifiable evidence to support decision-making.

When making data-driven decisions, it is important to consider the reliability and relevance of the data. Drawing conclusions from unreliable or irrelevant data can lead to incorrect decisions that can negatively affect business performance.

Overall, utilizing data to improve business performance requires a thorough understanding of how to analyze and interpret data effectively. By identifying areas for improvement and making data-driven decisions, businesses can unlock their potential for growth and success.

Communication and Reporting

Effective communication of business performance is essential for the growth and success of any organization. It helps stakeholders, including employees, investors, and customers, understand the company's progress and make informed decisions. In this section, we will discuss the importance of communicating business performance to stakeholders and how to create effective reports and presentations.

The Importance of Communicating Business Performance to Stakeholders

• It builds trust: Effective communication builds trust between the organization and its stakeholders. When stakeholders are informed about the company's progress, they are more likely to believe in the organization and its leadership.
• It fosters transparency: Transparent communication about business performance promotes accountability and openness, which are essential for maintaining a healthy work culture. It helps to improve employee morale and foster a sense of community.
• It helps to identify areas for improvement: Regular communication about business performance provides a platform to identify areas that require improvement, enabling the organization to take corrective measures and enhance its performance.

How to Create Effective Reports and Presentations

Creating effective reports and presentations requires a systematic approach that considers the needs and expectations of the target audience. Here are some tips for creating effective reports and presentations:

• Know your audience: Understand the needs and expectations of your target audience before creating a report or presentation. This will help you tailor your communication to their needs.
• Focus on key performance metrics: Focus on the key performance metrics that are relevant to your audience, and avoid including irrelevant or redundant information.
• Use visual aids: Use visual aids such as graphs, charts, and tables to illustrate your points and make your reports and presentations more engaging.
• Be concise: Keep your reports and presentations concise and to the point. Avoid using technical jargon and complex language that may confuse your audience.
• Provide context: Provide context and background information to help your audience understand the significance of your performance metrics and how they relate to the organization's overall goals.

By following these tips, you can create effective reports and presentations that communicate business performance to your stakeholders in a clear, concise, and engaging manner.

If you need help with communicating business performance to stakeholders, ExactBuyer provides real-time contact and company data, and audience intelligence solutions that can help you build more targeted audiences. Contact us today to learn more.

After reading this guide, you should now have a better understanding of the importance of measuring business performance and how it can impact the overall success of your organization. Here are the key takeaways:

• Measuring business performance is essential for identifying areas of improvement, setting goals and objectives, and making data-driven decisions
• There are many different metrics and tools available for measuring business performance, including financial metrics, customer satisfaction, employee engagement, and more
• It's important to regularly track and analyze your metrics to stay on top of trends and make informed decisions
• ExactBuyer offers real-time contact and company data solutions that can help you build more targeted audiences and improve your overall business performance

We encourage you to start measuring your business performance today! By implementing the right metrics and tools, you can gain valuable insights into your organization and make data-driven decisions that can help drive growth and success.

Ready to get started? Contact ExactBuyer today to learn more about our real-time data solutions and see how they can help improve your business performance.

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Measure success with these 12 business performance metrics

Discover your company's vulnerabilities using these business performance metrics and solve them with a data-driven approach to boost your brand's success.

Discover the impact the no-code movement will have for the future of makers and businesses.

Harness the power of effective business performance metrics to proactively steer your business to success.

Every organization, big or small, requires regular checks and adjustments to operate efficiently. But achieving harmony and efficiency across the company poses a challenge.

However, setting up performance metrics lets you focus on vital data, promptly address arising issues, and forecast growth trajectories. Without these insights, you risk making decisions based on assumptions or outdated information, leading to missed opportunities and inefficiencies. Here’s how to measure the most essential business performance metrics and leverage them for growth.

12 key business metrics to track

From back-end sales numbers to the frontline workforce, these business performance metrics examples offer a comprehensive view of your company but also pinpoint areas ripe for enhancement and growth.

1. Sales revenue

Sales revenue is the total income earned selling products and services. Comparing monthly sales revenue lets you gauge the effectiveness of your marketing strategies, determine your market standing, and evaluate your company’s overall viability.

To calculate sales revenue, multiply the units sold by their respective prices and subtract the costs of returned or undelivered products.

Sales revenue = (number of units sold ✕ price of each unit) – cost of returned or undelivered products

Expanding your product catalog, targeting untapped markets, investing in sales and marketing teams, and launching effective advertising campaigns are all impactful ways to increase sales revenue. If you’re a web design firm, for example, consider introducing a website maintenance package or offer template customization to cater to clients wanting ongoing support or a personalized touch.

2. Net profit margin

Net profit margin measures the proportion of revenue that remains as profit after deducting all expenses, including taxes, salaries, and operational costs. This business metric offers insights into your company’s efficiency at converting revenue to profit, with a higher net profit margin indicating better profitability.

To calculate your company’s monthly net profit margin for a specific period, divide your net profit by the total revenue and multiply this number by 100.

Net profit margin = Net profit / Total sales revenue ✕ 100

Understanding net profit margin proves invaluable in forecasting monthly expenditures and plotting long-term growth. By continuously monitoring this percentage, you assess your company’s financial stability and ability to expand — when revenue surpasses expenses, you’re ready to scale.

To enhance your net profit margin, prioritize operational efficiency and cost containment. You optimize your revenue flow by identifying and eliminating unnecessary expenses and adjusting your prices when feasible.

3. Gross margin

Gross margin represents the percentage of revenue after deducting the costs of goods sold. It’s the proportion of sales revenue retained as profit after subtracting overhead expenses, like rent, utilities, payroll, and insurance.

Here’s the formula to calculate gross margin:

Gross margin = (Total revenue – Costs of good sold) / Total revenue ✕ 100

A higher gross profit margin indicates that a larger portion of each revenue dollar goes toward covering fixed costs and generating profit. It also offers insights into how efficiently your business produces goods and manages pricing. You can improve your gross margin by reducing operational costs , setting competitive prices, and negotiating better deals with third-party suppliers and distributors.

4. Customer loyalty and retention

Customer loyalty and retention metrics measure how consistently customers return to buy your company’s products or use your services over time. High rates reflect the value and satisfaction customers derive from your offerings.

To quantify customer loyalty, you must calculate your business’s retention rate. Subtract the number of customers acquired over a fixed period (say, a year) from the number of customers at the end of that period. Then, divide this by the number of customers at the beginning of that period and multiply it by 100. Here’s the formula:

Customer retention rate = (Number of customers at the end of a fixed period – Number of customers acquired during that period) / Number of customers at the beginning of the fixed period ✕ 100

Fostering a loyal customer base helps increase brand awareness through recommendations and word of mouth. Consistently returning customers signify steady revenue, and they often have higher lifetime values and purchase more over time. Retaining existing customers is also five to six times less expensive than acquiring new ones, making it a cost-effective strategy.

To boost loyalty and retention, consider personalizing experiences with tailored discounts and loyalty programs, improving customer service, addressing feedback, and delivering high-quality products and services.

5. Qualified leads per month

Qualified leads are potential visitors who express a genuine interest in your products and services and have a higher likelihood of becoming customers. This metric gauges the efficiency of your targeting efforts.

You can group leads into four categories:

• Information qualified leads (IQL): Also known as cold leads, IQLs are prospective leads at the beginning of the sales funnel at the stage when a company encourages visitors to provide their personal information (name, age, contact information, etc.) for information on products and services
• Marketing qualified leads (MQL): Also called warm leads, these are leads that your marketing team reviews and verifies if they meet the necessary criteria, such as age group, location, and preferences
• Sales accepted leads (SAL): Leads that the marketing team passes to the sales team after verification, who start the conversion process
• Sales qualified leads (SQL): Leads vetted by the sales team that have the highest probability of converting into customers

You’ll receive more leads as your business grows and your marketing efforts intensify. However, not all prospects become paying customers, so remember to focus on quality over quantity. To increase qualified leads, fine-tune your marketing campaigns to target the right customers and personalize content to resonate with those most likely to convert. This strategy optimizes conversion opportunities, fueling revenue growth.

6. Lead-to-customer conversion rate

The lead-to-customer conversion rate measures how effectively your sales team turns potential visitors into paying customers. It directly reflects the efficacy of your sales process and the quality of leads your team generates.

Calculate your company’s lead-to-customer conversion rate by dividing the number of converted leads by the total number of leads and multiplying the result by 100.

Conversion rate = Number of converted customers / Number of total leads ✕ 100

Sales revenue leans on the ratio of leads your sales team converts into customers. To bolster conversion rates, promote your brand and create positive first impressions with an optimized website , excellent reviews, responsive customer service, and an attractive social media presence. Every touchpoint with a potential customer should convey quality and trustworthiness, nudging them closer to a purchase decision.

7. Customer acquisition cost

Customer acquisition cost (CAC) includes all the costs required to gain a new customer, including marketing and sales expenditures, directly affecting your profitability. A lower CAC means acquiring customers more cost-effectively, leading to better profit margins. Conversely, a high CAC might indicate inefficiencies in your marketing and sales efforts or that you’re targeting a challenging or incorrect market segment.

Calculate your CAC by dividing your company’s marketing and sales costs by the number of customers acquired over a fixed period.

Customer acquisition cost = Marketing and sales costs / Number of new customers acquired

You can lower your average customer acquisition cost by focusing on high-profit market segments. Streamline your marketing campaigns for precision targeting and focus on the most promising leads, such as marketing qualified leads. This ensures you’re allocating resources to strategies that offer the best return on investment.

8. Net promoter score

Net promoter score (NPS) measures customer loyalty and satisfaction by asking existing customers how likely they are to recommend your products and services to others.

Customers respond on a scale of 0 to 10, leading to three loyalty categories:

• Promoters (9–10 score): Loyal customers who regularly promote your business and recommend your products and services to friends and family
• Passives (7–8 score): Generally satisfied but may abandon your brand for competing offers
• Detractors (0–6 score): Dissatisfied customers who speak negatively of your brand

To calculate your net promoter score, subtract the percentage of detractors from the percentage of promoters.

Net promoter score = Percentage of promoters – percentage of detractors

Boost your net promoter score by improving customer service, personalizing the user experience, addressing complaints and concerns, and expanding on existing offerings at competitive prices.

9. Customer lifetime value

Customer lifetime value (CLV) measures how much revenue you expect to earn from a single customer throughout their relationship with your brand. A higher CLV suggests you’re effectively maximizing the value from each customer.

Calculate CLV by multiplying the average purchase amount by the purchase frequency and the expected lifespan of the customer-brand relationship.

Customer lifetime value = average purchase value ✕ purchase frequency for month ✕ customer lifespan

To improve CLV, cultivate brand loyalty and customer satisfaction. Implement personalized email marketing campaigns, fine-tune your search engine optimization (SEO) strategies, and deploy targeted advertising. Promptly addressing customer concerns can also transform potential setbacks into trust-building moments, further enhancing long-term revenue potential.

10. Website traffic

Website traffic measures the volume of users visiting your website and interacting with its content.

You can use tools like Google Analytics to monitor website traffic and sub-metrics, including page views, bounce rates , and time on page. Tracking these metrics allows you to better understand your audience and their preferences. For example, sites with high bounce rates indicate issues like slow loading speeds or a lack of responsive design.

You can improve website traffic by elevating your SEO practices, creating relevant content that resonates with your audience, and promoting your brand through social media and other online channels. This continuous monitoring and adaptation enhances the user experience and paves the way for better conversions and brand recognition.

11. Team satisfaction

Team satisfaction shines a light on employee morale, participation, and job satisfaction. Happier workers increase productivity , making them valuable contributors to your company’s success.

To measure employee satisfaction, gather feedback using surveys, which can address company policies, responsibilities, and work-life balance. Then, improve team morale by investing in their skill development, encouraging open communication, cultivating a supportive work culture, and recognizing and rewarding hard work.

12. Progress toward goals and deadlines

Evaluating progress toward set goals and deadlines reveals how well your business achieves and meets its long-term goals. Key performance indicators (KPIs) and project management tools like Notion are excellent for monitoring these milestones and ensuring you hit predefined goals . By understanding where you stand, you can pivot operations, optimize resource allocation, and roll out action plans clearly. This also ensures everyone knows their roles and expectations. When everyone works in a structured system with clear objectives, you’re likelier to achieve KPIs and long-term success.

Optimize your business for success

Measuring and analyzing these recommended business performance metrics help you make informed decisions, discover opportunities, and approach challenges proactively. With the right resources, you can guide your company to long-term success.

Whether you’re a solopreneur, at an established company, or running an ecommerce store , data-driven methodologies let you harness each metric effectively to drive business growth.

To get more insights into your business’s performance, explore Webflow’s resources. Webflow Enterprise offers powerful tools to create websites with visual web development. Or check out our blog for more website maintenance and optimization guides that can help you measure and optimize website performance.

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Kpi meaning + 27 examples of key performance indicators.

As your organization begins to sketch out what your strategic plan might look like, it’s likely to come to your attention that you’ll need to gain consensus around what your key performance indicators will be and how they will impact your organization. If you haven’t thought much about your KPIs yet, that’s okay. We can help!

We’ve compiled a complete guide that includes an overview of what makes a good KPI, the benefits of good key performance indicators, and a list of KPI examples [organized by department and industry] for your reference as you develop your organization’s strategic plan and goals.

Video Transcript – How to Write KPIs

Hi, my name is Erica Olsen. Today’s whiteboard video is on key performance indicators, or KPIs for short. These are those things that are associated with either goals or objectives, whatever you’re calling them, those elements of your plan that are the expressions of what you want to achieve by when those quantifiable outcome-based statements.

So KPI’s answer the quantifiable piece of your goals and objectives. They come in three different flavors. So we’ll talk about that in just a minute. But before we do, putting great measures together and making sure they work well for you, you need to have these four attributes. And before I talk about those four attributes, so I just want to say the reason they need to work well for you is because KPIs are the heartbeat of your performance management process. They tell you whether you’re making progress, and ultimately, we want to make progress against our strategy. So KPIs are the thing that do that for us. So you’re going to live with them a lot. So let’s make sure they’re really good.

Okay, so the four things you need to have in order to make sure your these measures work for you.

Our number one is your measure. So the measure is the verbal expression very simply, in words, what are we measuring, which is fairly straightforward. The tricky thing is, is we need to be as expressive as we possibly can with our measures. So number of new customers, that’s fine. There’s nothing wrong with that. But a little bit advanced or a little bit more expressive, would be number of new customers this year, or number of new customers for a certain product or a certain service. So what is it is it? Yeah, so it is, so be really clear. And when it comes to measuring it on a monthly basis, you’re gonna want to be as clear as possible. So number of new customers, let’s say this year,

Number two, is our target, or target is the numeric value that we want to achieve. So a couple of things that are important about this is, the target needs to be apples to apples with when the goal date is set, or the due date is set. So we want to achieve 1000 new customers by the end of the year. So the due date in the target works hand in hand. The other thing is the measure and the target need to work hand in hand. So it’s a number. So this is a number, this is a percentage, this is a percentage, you get the idea.

Third thing, we actually run a report on this data. So where is it coming from? Be clear about what the source is. Most organizations have all sorts of data sources, fragmented systems. So making sure you identify where this data is coming from will save you a lot of time.

And then frequency. So how often are you going to be reporting on this KPI, ideally, you’re running monthly strategy reviews to report on the progress of your plan, at least monthly, in which case we’d like to see monthly KPIs. So you got to be able to pull the data monthly in order to make that happen. That’s not always possible. But let’s try to get there. Certainly some organizations are weekly and others are daily, monthly is a good place to start. So frequency. Great.

So now we know the components that we need to have in place in order to have our KPIs. Here are some different types of KPIs that you might think about as you’re putting your plan together.

So there are just straight up raw numbers, I call these widget counting, there’s nothing wrong with widget counting, they don’t necessarily tell a story. And I’ll talk about how to make this tell a story in a minute. But this is just simply widget counting number of things.

The second thing is progress. So this is really often used, it’s great. We use this, which is expressed as percent complete percent complete of the goal, percent completed a project, whatever it might be, it’s a project type measure. It’s a good measure, if if you don’t have quantifiable measures, or you can’t get the data, and you just want to track the performance of the goal as it relates to action items being completed under it.

The third type of indicator is a Change Type Indicator, like percent increase in sales, making this better would be percent increase in sales compared to last year. And the idea is 22%. So you can see how that starts to be more expressive, and work with the target. So this serves to tell a little bit more of a story than this one does, right? And if you want to actually make your widget counting measures tell more of a story like this one does, you might change something like this to read percentage of new customers acquired compared to same time last year. So that’s an example.

Okay, so now we know what we have to have in place and kind of different types of measures to get our ideas flowing. Let’s talk about one thing that you might take your measure writing to the next level and that is think about the fact that there are leading and lagging measures so are leading and lagging indicators. So percent increase in sales or sales is a lagging indicator it occurred as an outcome. If you want to make sure that you’re on track ACC, you might have a KPI in place, which is telling us whether we’re going to hit that increase such as your pipeline, maybe number of leads, or the size of your pipeline. So we don’t want to over rotate on this necessarily, but we do want to make sure we have a combination of leading and lagging measures when we’re looking at our performance on a monthly basis.

So with that, that’s all we have for today. Hopefully you have what you need to write great KPIs for your organization. Happy strategizing. And don’t forget, subscribe to our channel.

What is a Key Performance Indicator KPI — KPI Definition

Key performance indicators, also called KPIs, are the elements of your organization’s plan that express the quantitative outcomes you seek and how you will measure success. In other words, they tell you what you want to achieve and by when, and are crucial for evaluating the success of an organization. They are the qualitative, quantifiable, outcome-based statements you’ll use to measure progress and determine if you’re on track to meet your goals or objectives. Good plans use 5-7 KPIs to manage and track their progress against goals.

DOWNLOAD THE FREE KPI GUIDE

KPI Meaning & Why do you need them?

Key performance indicators are intended to create a holistic picture of how your organization is performing against its intended targets, business goals, or objectives. A great key performance indicator should accomplish all the following:

• Outline and measure your organization’s most important set of outputs.
• Work as the heartbeat of your performance management process and confirm whether progress is being made against your strategy.
• Represent the key elements of your strategic plan that express what you want to achieve by when.
• Measure the quantifiable components of your goals and objectives.
• Measure the most important leading and lagging measures in your organization.

The Five Elements of a KPI

These are the heartbeat of your performance management process and must work well! They tell you whether you’re making progress or how far you are from reaching your goals. Ultimately, you want to make progress against your strategy. You’ll live with these KPIs for at least the quarter (preferably the year), so make sure they’re valuable!

Great strategies track the progress of core elements of the plan. Each key performance indicator needs to include the following elements:

• A Measure: Every KPI must have a measure. The best ones have more specific or expressive measures.
• A Target: Every KPI needs to have a target that matches your measure and the period of your goal. These are generally a numeric values you’re seeking to achieve.
• A Data Source: Each of these needs to have a clearly defined data source so there is no gray area in measuring and tracking each.
• Reporting Frequency: Different measures may have different reporting needs, but a good rule to follow is to report on them at least monthly.
• Owner: While this isn’t a mandatory aspect of your KPI statement, setting expectations of who will take care of tracking, reporting, and refining specific KPIs is helpful to your overall organizational plan.

Indicators vs. Key Performance Indicators

An indicator is a general term that describes a business’s performance metrics.

There can be several types of indicators a company may track, but not all indicators are KPIs, especially if they don’t tie into an organization’s overall strategic plan or objectives, which is a MUST!

Key Performance Indicators

On the other hand, a key performance indicator is a very specific indicator that measures an organization’s progress toward a specific company-wide goal or objective. We typically recommend you narrow down the KPIs your organization tracks to no more than 7. When you track too many goals, it can get daunting and confusing.

Pro Tip : You should only track the best and most valuable indicators that tie to your organization’s long-term strategic goals and direction.

Benefits of Good Key Performance Indicators

What benefits do key performance indicators have on your strategic plan, and on your organization as a whole? A lot of benefits, actually! They are extremely important to the success of your strategic plan as they help you track progress of your goals. Implementing them correctly is critical to success.

• Benefit #1: They provide clarity and focus to your strategic plan by measuring progress and aligning your team’s efforts to the organization’s objectives. They also show your measurable progress over time and create ways to track your organization’s continued improvement.
• Benefit #2: Key performance indicators create a way to communicate a shared understanding of success. They give your team a shared understanding of what’s important to achieve your long-term vision and create a shared language to express your progress.
• Benefit #3: They provide signposts and triggers to help you identify when to act. A good balance of leading and lagging key performance indicators allow you to see the early warning signs when things are going well, or when it’s time to act.

How to Develop KPIs

We’ve covered this extensively in our How to Identify Key Performance Indicators post. But, here’s a really quick recap:

Step 1: Identify Measures that Contribute Directly to Your Annual Organization-wide Objectives

Ensure you select measures that can be directly used to quantify your most important annual objectives.

Step 2: Evaluate the Quality of Your Core Performance Indicators

Select a balance of leading and lagging indicators (which we define later in the article) that are quantifiable and move your organization forward. Always ensure you have relevant KPIs. Having the right key performance indicators makes a world of difference!

Step 3: Assign Ownership

Every key performance indicator needs ownership! It’s just that simple.

Step 4: Monitor and Report with Consistency

Whatever you do, don’t just set and forget your goals. We see it occasionally that people will select measures and not track them, but what’s the point of that? Be consistent. We recommend selecting measures that can be reported upon at least monthly.

The 3 Common Types of KPIs to Reference as You Build Your Metrics

Key performance indicators answer the quantifiable piece of your goals and objectives . They come in three different flavors. Now that you know the components of great key performance indicators, here are some different ones that you might think about as you’re putting your plan together:

Broad Number Measures

The first type of KPI is what we like to call broad number measures. These are the ones that essentially count something. An example is counting the number of products sold or the number of visits to a webpage.

PRO TIP: There is nothing wrong with these, but they don’t tell a story. Great measures help you create a clear picture of what is going on in your organization. So, using only broad ones won’t help create a narrative.

Progress Measures

Progress key performance indicators are used to help measure the progress of outcomes . This is most commonly known as the “percent complete” KPI, which is helpful in measuring the progress of completing a goal or project. These are best when quantifiable outcomes are difficult to track, or you can’t get specific data.

PRO TIP: Progress KPIs are great, but your KPI stack needs to include some easily quantifiable measures. We recommend using a mixture of progress KPIs and other types that have clear targets and data sources.

Change Measures

The final type of KPI is a change indicator. These are used to measure the quantifiable change in a metric or measure. An example would be, “X% increase in sales.” It adds a change measure to a quantifiable target.

The more specific change measures are, the easier they are to understand. A better iteration of the example above would be “22% increase in sales over last year, which represents an xyz lift in net-new business.” More expressive measures are better.

PRO TIP: Change measures are good for helping create a clear narrative . It helps explain where you’re going instead of just a simple target.

Leading KPIs vs Lagging KPIs

Part of creating a holistic picture of your organization’s progress is looking at different types of measures, like a combination of leading and lagging indicators. Using a mixture of both allows you to monitor progress and early warning signs closely when your plan is under or over-performing (leading indicator) and you have a good hold on how that performance will impact your business down the road (lagging indicator). Here’s a deep dive on leading versus lagging indicators:

Leading Indicator

We often refer to these metrics as the measures that tell you how your business might/will perform in the future. They are the warning buoys you put out in the water to let you know when something is going well and when something isn’t.

For example, a leading KPI for an organization might be the cost to deliver a good/service. If the cost of labor increases, it will give you a leading indicator that you will see an impact on net profit or inventory cost.

Another example of a leading indicator might be how well your website is ranking or how well your advertising is performing. If your website is performing well, it might be a leading indicator that your sales team will have an increase in qualified leads and contracts signed.

Lagging Indicator

A lagging indicator refers to past developments and effects. This reflects the past outcomes of your measure. So, it lags behind the performance of your leading indicators.

An example of a lagging indicator is EBITA. It reflects your earnings for a past date. That lagging indicator may have been influenced by leading indicators like the cost of labor/materials.

Balancing Leading and Lagging Indicators

If you want to ensure that you’re on track, you might have a KPI in place telling you whether you will hit that increase, such as your lead pipeline. We don’t want to over-rotate on this, but as part of a holistic, agile plan, we recommend outlining 5-7 key performance metrics or indicators in your plan that show a mix of leading and lagging indicators. .

Having a mixture of both gives you both a look-back and a look-forward as you measure the success of your plan and business health. We also recommend identifying and committing to tracking and managing the same KPIs for about a year, with regular monthly or quarterly reporting cadence, to create consistency in data and reporting.

27 KPI Examples

Sales key performance indicators.

• Number of contracts signed per quarter
• Dollar value for new contracts signed per period
• Number of qualified leads per month
• Number of engaged qualified leads in the sales funnel
• Hours of resources spent on sales follow up
• Average time for conversion

Increase the number of contracts signed by 10% each quarter.

• Measure: Number of contracts signed per quarter
• Target: Increase number of new contracts signed by 10% each quarter
• Data Source: CRM system
• Reporting Frequency: Weekly
• *Owner: Sales Team
• Due Date: Q1, Q2, Q3, Q4

Increase the value of new contracts by $300,000 per quarter this year.

• Measure: Dollar value for new contracts signed per period
• Data Source: Hubspot Sales Funnel
• Reporting Frequency: Monthly
• *Owner: VP of Sales

Increase the close rate to 30% from 20% by the end of the year.

• Measure: Close rate – number of closed contracts/sales qualified leads
• Target: Increase close rate from 20% to 30%
• *Owner: Director of Sales
• Due Date: December 31, 2023

Increase the number of weekly engaged qualified leads in the sales from 50 to 75 by the end of FY23.

• Measure: Number of engaged qualified leads in sales funnel
• Target: 50 to 75 by end of FY2023
• Data Source: Marketing and Sales CRM
• *Owner: Head of Sales

Decrease time to conversion from 60 to 45 days by Q3 2023.

• Measure: Average time for conversion
• Target: 60 days to 45 days
• Due Date: Q3 2023

Increase number of closed contracts by 2 contracts/week in 2023.

• Measure: Number of closed contracts
• Target: Increase closed contracts a week from 4 to 6
• Data Source: Sales Pipeline
• *Owner: Sales and Marketing Team

Examples of KPIs for Financial

• Growth in revenue
• Net profit margin
• Gross profit margin
• Operational cash flow
• Current accounts receivables

Financial KPIs as SMART Annual Goals

Grow top-line revenue by 10% by the end of 2023.

• Measure: Revenue growth
• Target: 10% growt
• Data Source: Quickbooks
• *Owner: Finance and Operations Team
• Due Date: By the end 2023

Increase gross profit margin by 12% by the end of 2023.

• Measure: Percentage growth of net profit margin
• Target: 12% net profit margin increase
• Data Source: Financial statements
• *Owner: Accounting Department

Increase net profit margin from 32% to 40% by the end of 2023.

• Measure: Gross profit margin in percentage
• Target: Increase gross profit margin from 32% to 40% by the end of 2023
• Data Source: CRM and Quickbooks
• *Owner: CFO

Maintain $5M operating cash flow for FY2023.

• Measure: Dollar amount of operational cash flow
• Target: $5M average
• Data Source: P&L
• Due Date: By the end FY2023

Collect 95% of account receivables within 60 days in 2023.

• Measure: Accounts collected within 60 days
• Target: 95% in 2023
• Data Source: Finance
• Due Date: End of 2023

Examples of KPIs for Customers

• Number of customers retained
• Percentage of market share
• Net promotor score
• Average ticket/support resolution time

Customer KPIs as SMART Annual Goals

90% of current customer monthly subscriptions during FY2023.

• Measure: Number of customers retained
• Target: Retain 90% percent of monthly subscription customers in FY2023
• Data Source: CRM software
• *Owner: Director of Client Operations

Increase market share by 5% by the end of 2023.

• Measure: Percentage of market share
• Target: Increase market share from 25%-30% by the end of 2023
• Data Source: Market research reports
• Reporting Frequency: Quarterly
• *Owner: Head of Marketing

Increase NPS score by 9 points in 2023.

• Measure: Net Promoter Score
• Target: Achieve a 9-point NPS increase over FY2023
• Data Source: Customer surveys
• *Owner: COO

Achieve a weekly ticket close rate of 85% by the end of FY2023.

• Measure: Average ticket/support resolution time
• Target: Achieve a weekly ticket close rate of 85%
• Data Source: Customer support data
• *Owner: Customer Support Team

Examples of KPIs for Operations

• Order fulfillment time
• Time to market
• Employee satisfaction rating
• Employee churn rate
• Inventory turnover

Operational KPIs as SMART Annual Goals

Average 3 days maximum order fill time by the end of Q3 2023.

• Measure: Order fulfilment time
• Target: Average maximum of 3 days
• Data Source: Order management software
• *Owner: Shipping Manager

Achieve an average SaaS project time-to-market of 4 weeks per feature in 2023.

• Measure: Average time to market
• Target: 4 weeks per feature
• Data Source: Product development and launch data
• *Owner: Product Development Team

Earn a minimum score of 80% employee satisfaction survey over the next year.

• Measure: Employee satisfaction rating
• Target: Earn a minimum score of 80% employee
• Data Source: Employee satisfaction survey and feedback

Maintain a maximum of 10% employee churn rate over the next year.

• Measure: Employee churn rate
• Target: Maintain a maximum of 10% employee churn rate over the next year
• Data Source: Human resources and payroll data
• *Owner: Human Resources

Achieve a minimum ratio of 5-6 inventory turnover in 2023.

• Measure: Inventory turnover ratio
• Target: Minimum ratio of 5-6
• Data Source: Inventory management software
• *Owner: perations Department

Marketing Key Performance

• Monthly website traffic
• Number of marketing qualified leads
• Conversion rate for call-to-action content
• Keywords in top 10 search engine results
• Blog articles published this month
• E-Books published this month

Marketing KPIs as SMART Annual Goals

Achieve a minimum of 10% increase in monthly website traffic over the next year.

• Measure: Monthly website traffic
• Target: 10% increase in monthly website
• Data Source: Google analytics
• *Owner: Marketing Manager

Generate a minimum of 200 qualified leads per month in 2023.

• Measure: Number of marketing qualified leads
• Target: 200 qualified leads per month
• Data Source: Hubspot

Achieve a minimum of 10% conversion rate for on-page CTAs by end of Q3 2023.

• Measure: Conversion rate on service pages
• Target: 10%
• Due Date: End of Q3, 2023

Achieve a minimum of 20 high-intent keywords in the top 10 search engine results over the next year.

• Measure: Keywords in top 10 search engine results
• Target: 20 keywords
• Data Source: SEM Rush data
• *Owner: SEO Manager

Publish a minimum of 4 blog articles per month to earn new leads in 2023.

• Measure: Blog articles
• Target: 4 per month
• Data Source: CMS
• *Owner: Content Marketing Manager
• Due Date: December 2023

Publish at least 2 e-books per quarter in 2023 to create new marketing-qualified leads.

• Measure: E-Books published
• Target: 2 per quarter
• Data Source: Content management system

Bonus: +40 Extra KPI Examples

Supply chain example key performance indicators.

• Number of On-Time Deliveries
• Inventory Carry Rate
• Months of Supply on Hand
• Inventory-to-Sales Ratio (ISR)
• Carrying Cost of Inventory
• Inventory Turnover Rate
• Perfect Order Rate
• Inventory Accuracy

Healthcare Example Key Performance Indicators

• Bed or Room Turnover
• Average Patient Wait Time
• Average Treatment Charge
• Average Insurance Claim Cost
• Medical Error Rate
• Patient-to-Staff Ratio
• Medication Errors
• Average Emergency Room Wait Times
• Average Insurance Processing Time
• Billing Code Error Rates
• Average Hospital Stay
• Patient Satisfaction Rate

Human Resource Example Key Performance Indicators

• Organization Headcount
• Average Number of Job Vacancies
• Applications Received Per Job Vacancy
• Job Offer Acceptance Rate
• Cost Per New Hire
• Average Salary
• Average Employee Satisfaction
• Employee Turnover Rate
• New Hire Training Effectiveness

Social Media Example Key Performance Indicators

• Average Engagement
• % Growth in Following
• Traffic Conversions
• Social Interactions
• Website Traffic from Social Media
• Number of Post Shares
• Social Visitor Conversion Rates
• Issues Resolved Using Social Channel

Conclusion: Keeping a Pulse on Your Plan

With the foundational knowledge of the KPI anatomy and a few example starting points, it’s important you build out these metrics with detailed and specific data sources so you can truly evaluate if you’re achieving your goals. Remember, these will be the 5-7 core metrics you’ll live by for the next 12 months, so it’s crucial to develop effective KPIs that follow the SMART formula.

A combination of leading and lagging KPIs will paint a clear picture of your organization’s strategic performance and empower you to make agile decisions to impact your team’s success. KPI software allows your business to monitor and analyze performance trends over time by centralizing your data and using relevant data points and calculations. If you’d like more information on building better ones, check out the video above and click here to see why not all KPIs are created equal.

Our Other KPI Resources

We have several other great resources to consider as you build your organization’s Key Performance Indicators! Check out these other helpful posts and guides:

• OKRs vs. KPIs: A Downloadable Guide to Explain the Difference
• How to Identify KPIs in 4 Steps
• KPIs vs Metrics: Tips and Tricks to Performance Measures
• Guide to Establishing Weekly Health Metrics

FAQs on Key Performance Indicators

KPI stands for Key Performance Indicators. KPIs are the elements of your organization’s business or strategic plan that express what outcomes you are seeking and how you will measure their success. They express what you need to achieve by when. KPIs are always quantifiable, outcome-based statements to measure if you’re on track to meet your goals and objectives.

The 4 elements of key performance indicators are:

• A Measure – The best KPIs have more expressive measures.
• A Target – Every KPI needs to have a target that matches your measure and the time period of your goal.
• A Data Source – Every KPI needs to have a clearly defined data source.
• Reporting Frequency – A defined reporting frequency.

No, KPIs (Key Performance Indicators) are different from metrics. Metrics are quantitative measurements used to track and analyze various aspects of business performance, while KPIs are specific metrics chosen as indicators of success in achieving strategic goals.

16 Comments

HI Erica hope your are doing well, Sometime Strategy doesn’t cover all the activities through the company, like maintenance for example may be quality control …. sure they have a contribution in the overall goals achievement but there is no specific new requirement for them unless doing their job, do u think its better to develop a specific KPIs for these department? waiting your recommendation

Thanks for your strategic KPIs

Hello Erica, Could you please clarify how to set KPIs for the Strategic Planning team?

Hi Diana, check out the whitepaper above for more insight!

Hello Erica, Could you please clarify, how to set the KPIs for the Strategic PLanning team?

exampels of empowerment kpis

I found great information in this article. In any case, the characteristics that KPIs must have are: measurability, effectiveness, relevance, utility and feasibility

How to write methodology guidelines for strategy implementation / a company’s review and tracking (process and workflow) for all a company’s divisions

support on strategizing Learning & Development for Automobile dealership

Could you please to clarify how to write the KPIs for the Secretary.

Check out our guide to creating KPIs for more help here: https://onstrategyhq.com/kpi-guide-download/

That’s an amazing article.

Could you please to clarify how to write the KPIs for the office boy supervisor

Could you please clarify how to write KPIs for the editorial assistant in a start up publishing company.

Kindly advice how I would set a kpi for a mattress factory

Comments Cancel

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• How To Measure The Results Of Your Strategic Plan
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In today’s fast-paced business world, having a well-crafted strategic plan is critical to achieving success. But how do you measure the effectiveness of your plan? In this blog post, we will explore the six questions you should ask to guide your strategic planning process and share tips on measuring the results of your plan.

The first question is, “Where are we?” This question involves situational analysis and strategic assessments of both internal and external factors. It’s important to understand your organization’s strengths, weaknesses, opportunities, and threats to create a strong foundation for your plan.

The second question is, “Where could we be?” This question requires you to envision possible future scenarios for your organization. This will help you identify potential obstacles and opportunities that may arise during the implementation of your plan.

The third question is, “Where do we want to go?” This question links your future vision to a shorter time horizon of 3 to 5 years. It’s important to set clear, specific, and achievable goals that align with your vision.

The fourth question is, “How do we get there?” This question is broken down into two parts: strategies and one-year goals. It’s important to have a clear plan of action that outlines the steps you will take to achieve your goals.

The fifth question is, “How do we implement our plan?” This question focuses on the tactics you will use to implement your plan. It’s important to have a detailed plan that includes timelines, budgets, and resource allocation.

The final question is, “Are we getting there?” This question is all about measuring the effectiveness of your plan. It’s important to have metrics, scorecards, and data gathering processes in place to measure your progress and make adjustments as needed.

Once you have developed your one-year strategic initiatives, it’s important to use SMART goals to turn your plan into action. SMART goals are Specific, Measurable, Achievable, Relevant, and Timed. Setting SMART goals for each strategic goal will help you measure the results of your plan.

The old business maxim, “what is measured and monitored is improved,” is the reason why measuring the results of your strategic plan is so important. Scorecards have been around for a long time, and they provide a quick and easy way to see how your plan is doing. Pick 5 to 10 metrics that matter to your performance and measure them constantly.

A well-crafted strategic plan is essential for achieving success in today’s business world. By asking the right questions and measuring the results of your plan, you can stay on track and make adjustments as needed. Contact us at Dame Leadership to learn more about measuring the results of your strategic plan .

See related article: Guide to Strategic Planning in Business

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12 Business Metrics That Every Company Should Know

HOW DO YOU  measure your company’s performance?

The way not to do it is by following your gut feeling. Running a successful business requires a thorough analysis on the work, sales, and financial results. And it can’t be done without tracking relevant business metrics.

Business metrics, also called KPIs (key performance indicators) display a measurable value that shows the progress of a company’s business goals.

They’re usually tracked on a KPI dashboard. Business metrics indicate whether a company has achieved its goals in a planned time frame.

There are hundreds of different key performance indicator examples , but there’s no use in measuring all of these. Depending on your business goals, you should track business metrics that really show how your business is doing.

Tracking irrelevant KPIs will distract you from focusing on the things that truly matter. This way, you’ll end up stressing about the numbers that have no actual impact on your company’s development. So it is highly important that you not only track business metrics but also choose the right ones to perceive.

Examples of business metrics:

• Sales Revenue
• Net Profit Margin
• Gross Margin
• MRR (Monthly Recurring Revenue)
• Net Promoter Score

Up next, we’ll explore 12 popular business metrics that reflect on your company’s performance and indicate growth or decline.

1. Sales Revenue

We chose to put this metric first as it can tell a lot of things about your company. Month-over-month sales results show whether people are interested in buying your product/service, are your marketing efforts paying off, are you still in the competition, and much more.

When evaluating your sales revenue and setting goals, it is important to remember that sales results are affected by multiple other factors. The person tracking the sales KPIs should also be aware of recent changes in the market, previous marketing campaigns, competitive actions, etc.

How to measure:

Sales revenue is calculated by summing up all the income from client purchases, minus the cost associated with returned or undeliverable products.

Read on: Business Management Trends You Should Quit in 2017

How to improve:

The most obvious way to grow your sales revenue is to increase the number of sales. This can be done by expanding your marketing endeavors, hiring new salespeople, or making discount offers that are hard to resist. Growing your sales revenue should be a long-term strategy rather than a quick (and temporary) boost in sales.

2. Net Profit Margin

This business metric indicates how efficient your company is at generating profit compared to its revenue. Basically, this number tells you how big a sum of? each dollar earned translates into profits.

The Net Profit Margin is a good way to predict long-term business growth, and see whether your income exceeds the costs of running the business.

Calculate your monthly revenue and reduce all the sales expenses.

How to improve: You can improve your company’s Net Profit Margin by increasing your revenue.

The easiest way to do this is by raising the price of your products/services and selling more. Another method is to lower your sales and production costs while keeping up with the competition. Both of these tactics require thorough market research and long-term business strategy, and can’t be done overnight.

3. Gross Margin

The higher your Gross Margin , the more your company earns by each sales dollar. You’ll be able to invest it in other operations. This metric is especially important for starting companies as it reflects on improved processes and production. It’s like the equivalent of your company’s productivity, translated into numbers.

How to measure: The Gross Margin equals your company’s total sales revenue minus its cost of goods sold, divided by the total sales revenue.

Alright, let’s put it into an equation.

Gross Margin = (total sales revenue – cost of goods sold) / total sales revenue

How to improve: Gross Margin can be improved by making both your sales and production processes more efficient.

Everything about your business, one click away

Read more: This 1-hour Weekly Work Audit Will Skyrocket Your Productivity

4. Sales Growth Year-to-date

Who wouldn’t love to see their company grow month-over-month? But sometimes, sales are highly dependent on the season and the mood of the customers. Sales Growth Year-to-date indicates the pace at which your company’s sales revenue is increasing or decreasing.

Monitor your sales growth over various time periods – monthly, yearly, and long-term metrics will give you a better understanding of where your company stands. Make it a goal to accelerate your sales growth every month, or at least keep it at the same percentage, month over month.

How to measure: Check your monthly sales revenue and the number of new deals.

If your sales team work in multiple teams, you can also track this business metric by every team. This way, you’ll get a better overview of each sales department’s achievements.

How to improve: Similarly to Sales Revenue metric, this KPI can be increased by investing more resources in your marketing and sales activities. Sales Growth can also be boosted by positive media coverage or new product launch.

5. Cost of Customer Acquisition

Have you ever thought about how many small things contribute to acquiring a customer?

The Cost of Customer Acquisition (CAC) is calculated by dividing all the costs spent on acquiring new customers (marketing expenses) by the number of new clients acquired in a specific time frame. If you spent $8000 on marketing in September and acquired 40 customers in this time frame, your CAC is $200.

The Cost of Customer Acquisition should always be measured together with the Customer Lifetime Value. If a new client is worth the average of $1400 to you, acquiring them for $200 is a reasonable deal.

How to calculate: The easiest way to calculate the average Customer Lifetime Value is to multiply the average value of a sale by the number of repeat transactions and the average retention time in months for a typical customer.

Calculating the CLV depends on your product specifics – are you selling on a monthly basis, is it a big one-time transaction, or do people return to make repeat purchases? Here’s a great infographic by Kissmetrics, explaining the CLV in-depth.

How to improve: Evaluating the Customer Lifetime Value of various client segments can help you understand which segments bring in a higher profit. Let go of clients who are decreasing your net profit and difficult to convert, and focus on the most rewarding audience.

6. Customer loyalty and retention

Having loyal customers is beneficial in many ways. It helps to grow your sales and spread the word about your product. The Retention Rate shows the number of clients who keep using your product over an extended time period and make repeat purchases.

Here’s a quick formula for calculating the Retention Rate

Retention Rate = (((CE-CN)/CS)) X 100

CE = number of customers at the end of a certain time period (1 year, for example) CN = number of new customers acquired during the same time period CS = number of clients at the start of the time period

How to improve: Customer loyalty can be increased over time by providing excellent customer care and delivering high-quality products.

7. Net Promoter Score

Net Promoter Score reflects on the quality of your product and the level of customer satisfaction. It shows how many people are likely to recommend your product/service to a friend.

According to Net Promoter Network , there are three levels of customer advocacy:

• Promoters (score 9-10) are loyal enthusiasts who praise your company to others and drive your sales
• Passives (score 7-8) are satisfied but unenthusiastic customers who leave when they see a better offer.
• Detractors (score 0-6) are disappointed customers who spread negative information about your company and can damage your brand’s image.

How to measure: This marketing metric can be measured on a ten-point scale by conducting customer surveys and interviews. The easiest way is to ask this question in the follow-up email of a product order or new subscription. It takes some time to gather data and evaluate the results but it gives you many insights into how to improve your product/service.

To calculate the Net Promoter Score, subtract the percentage of Detractors from the percentage of Promoters.

Provide the very best customer service and deliver high-quality service. Offer benefits and information that your customers didn’t even expect to receive to make their user experience as good as possible.

8. Qualified leads per month

As your company grows, you’ll be able to invest more resources in marketing and sales. Soon, you’re going to have hundreds of new leads each month. But not all of these leads have the potential to become a customer.

That’s why you need to measure the number of qualified leads per month.

This business metric shows whether you’re targeting the right market with the highest potential of attracting new customers. If the number of qualified leads is declining, it means you need to re-evaluate your marketing campaigns and sales strategy.

How to measure: You can categorize your new leads into three distinct groups:

• Marketing qualified leads (MQL) – leads that are qualified by the marketing team on the premises that they match your potential lead requirements (size of the company, expectations, etc.)
• Sales-accepted leads (SAL) – leads that the marketing team has forwarded to the sales team, and are waiting for the final approval before the sales process begins
• Sales qualified leads (SQL) – leads qualified by the sales team that has the highest potential of becoming paying customers

How to improve: Instead of targeting millions of people, focus on a niche audience that has the highest probability of being interested in your products.

9. Lead-to-Client Conversion Rate

Leads do not turn into customers on their own. They need to be contacted by your sales team who will convert them into paying clients.

The Lead-to-Conversion business metric reflects on your sales team’s performance. Moreover, it might indicate the quality of your product – if leads fail to convert, they might be unimpressed with what you’re offering.

To calculate the Lead-to-Conversion KPI, divide the number of monthly new leads with the number of monthly new customers.

How to improve: To improve this metric, you first need to find the cause behind the low sales conversion rates. It might be a poorly-performing sales team, but it might also be a bad product-market fit. Here’s a great article by ConversionXL on how to improve your conversion rate .

10. Monthly website traffic

One of the best indicators of your company’s reputation in the monthly website traffic. The more people hear about your product, the more likely they are to check out your web page.

Use a free marketing tool such as Google Analytics to track your monthly website traffic as well as the traffic sources, to understand how people find your site.

The easiest way to do it is to increase the advertising budget. But there are many free and more efficient tactics: getting free press coverage, sharing valuable advice on social media channels, betting on search engine traffic with SEO, etc.

11. Met and Overdue Milestones

Every business has goals and milestones. Maybe you’d like to double your sales revenue by the next quarter, or maybe you’re planning a new product launch. All of these big goals are actually projects that can be divided into milestones to mark their progress.

Checking the number of met and overdue milestones gives you a quick overview of your team’s capacity. If you constantly fail to meet the milestones, it might be time to hire some extra hands or align your ambitions with reality.

Set up various project milestones and keep track of whether they’re met in time.

Read on: Business Management Software

If your company’s team constantly crosses deadlines, it should raise a red flag. There are three reasons to look out for: unreasonable expectations, insufficient resources, and low productivity. After you’ve discovered the problem, focus your energy on solving it. Moreover, ensure that you’ve set the right priorities .

Improve your work productivity with business management software. See the complete list of 30+ Team collaboration tools .

12. Employee Happiness

Happy employees = productive employees. New research suggests that we work 12% more effectively when we’re happy at work.

Keeping the satisfaction level high leads to a long-term commitment to the team and company. That’s why it’s important to regularly check whether your employees are happy and feel rewarded for their work.

How to measure: Conduct team surveys or use an HR tool to collect quick feedback on the teamwork and personal satisfaction levels.

The fastest solution to increased employee satisfaction is introducing some new perks, e.g. free coffee in the office. But the long-term solution to motivating your team is being a good example and practicing what you preach. Companies with a strong sense of mission project on their team, making everyone more motivated.

Quick recap

While there are many more important business metrics that companies can and should measure, these 12 will give you a quick overview of the current state of your business.

• Sales Growth Year-to-date
• Cost of Customer Acquisition
• Customer Loyalty and Retention
• Qualified Leads Per Month
• Lead to Client Conversion Rate
• Monthly Website Traffic
• Met and Overdue Milestones
• Employee Happiness

Which business metrics do you measure, and what are the best tools for doing it? Share your thoughts in the comments section!

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The Ledger No. 19: Measuring Success

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Welcome to The Ledger where we sum up the latest finance and accounting news and trends for you. On this week’s entry, we’re diving into the topic of how to measure success in a business and how companies can utilize that data to propel their company forward. Read on to learn what metrics are key to your company’s growth, what KPIs you should measure to boost customer retention, how family offices measure success, and why relationship building matters for businesses.

Key Metrics To Utilize For Your Company’s Growth

With data becoming more accessible, organizations are changing their tune and using more tools and resources to make more informed decisions. However, an overload of information can lead to clutter and productivity issues that make it hard to analyze. The solution is to prioritize your metrics and understand which ones your company needs to become successful. Here are few key metrics that can affect small-to-midsize companies as well as large corporations:

Lead generation and scoring . If you want to build your customer base online, creating forms on your site is one way to achieve that. Additionally, you can also find leads via social media and blog engagement.

Customer service and satisfaction . Continuous customer feedback is a must throughout every industry. This easiest way to gather feedback is through reviews which can be measured in real-time.

Employee engagement . You’ve probably heard the phrase, ‘The customer comes first’. The same can be said for your employees. If you want to know if your employees are satisfied at work, opt for using an Employee Net Promoter Scores.

Predictable and unpredictable revenue . If you want to stay ahead of the curve, develop predictable revenue streams such as subscriptions and memberships - this can help you improve your budget planning. Another thing to watch for is unpredictable revenue streams such as viral videos. Both streams allow businesses to measure recurring profits and customer retention rate.

Cash flow and available credit . Cash flow is a vital metric to measure, but so is available credit. By keeping a credit line open, companies can ensure that their employees and vendors are getting paid on time.

To explore how to measure the right metrics, read the full article on Forbes.com .

What KPIs You Should Measure To Boost Customer Retention

A decade ago, customer service was not at the forefront of any one company’s mind. In fact, most customers received and paid for their services without a second thought. It was purely transactional. However, in recent years, customer service has become just as important as the products and services a business offers. But other than reviews left on Yelp or social media platforms, how can you measure customer satisfaction?

While KPIs can definitely show you whether or not your organization is financially sound and operating smoothly, they can also indicate whether or not your customers are happy with your business. KPIs can tell you:

Customer acquisition numbers

Repeat customer numbers

Conversion rate

Marketing campaign success

… and more.

Let’s look at a few customer service KPIs that you need to be mindful of:

Customer satisfaction score

Net promoter score

First response time

Average handle time

Customer effort score

Customer retention rate

Service + quality

Employee satisfaction

Complaint rate and complaint satisfaction

To learn how to leverage customer service KPIs to improve the customer experience, head over to Business2Community.com to read the full article .

How Family Offices Measure Business Success

If you know what a Family Office is, you know that they’re comprised of the world’s most successful individuals and organizations. But do they measure success like other companies do, or in some other way? According to a survey done by Agreus, 45 percent of Family Offices think that success begins with a healthy return on investment, while 30 percent believe client satisfaction is the key to success. So if they believe those are the factors that define success, how do they measure those factors?

Return on investment

Cost containment

Stakeholder engagement

Diary management

Relationship management

To read more about how Family Offices measure success, head over to Forbes.com .

From Return On Investments To Return On Relationships, How to Measure Business Success

Just like you wouldn’t throw money at your children and call it a day, you shouldn’t do the same with your business. Moreover, thanks to the ever-evolving digital boom, relationship building matters more now than it ever has. And according to Seth Godin, “In the connection economy, trust and relationships are the new currency. It’s not a soft thing you do in your spare time, it’s the heart and soul of your business.”

But let’s face it, what was once considered relationship building decades ago has vastly changed. Nowadays, companies are having to get in front of their customers by curating content specifically for the customer. Why do you think having a position solely dedicated to social media is a thing now? Return on relationships is not an overnight process - it takes time and commitment, and more times than not, it’s a long wait. Fortunately, organizations who play the long game reap the reward - their relationship building turns into dollars.

To read the full article on why return on relationships is equally important as return on investments for a business, read the full article on FinancialPost.com .

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Welcome to The Weekly Ledger, where we've been summed up a year and half's worth of finance and accounting news, trends and insights for you. Learn the best insights as chosen by YOU.

Read on for insights about what top leaders do when choosing tomorrow’s leaders, creating a comprehensive succession plan, and succession planning in uncertain times.

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This week, we've rounded up everything finance leaders need to know about managing cash flow even in uncertain times along with some tried and true strategies. Learn more.

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We've rounded up everything finance leaders need to know about managing change. Read on for best practices and winning strategies for seamless change management and more.

We've rounded up everything finance leaders need to know about successful merger and acquisition dealmaking. Read on for best practices and winning strategies for every stage of your M&A deal.

We've rounded up everything finance leaders need to know about key performance metrics (KPIs). Let's dive right in.

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How can a business measure its success?

Table of Contents

Setting goals to measure success

Measuring success through website traffic, measuring success through customer satisfaction, measuring success through sales, measure your financial success with a simple app.

It’s vital to regularly measure the success of your business. If you don’t, it can be tough to decide how to move forward. There are many different ways you can measure success, so you need to make sure to pick the right one for your business. 

This guide will provide you with examples of how you can measure success and how to use those measurements to make decisions. There are hundreds of different metrics you can use, but this article will focus on:

• Setting goals
• Website traffic
• Customer satisfaction

A very simple way to measure success is to set goals. At the start of each month, use your previous sales figures to set yourself a sales target. If you’re not a sales-based business, you can set yourself a target of attracting a set amount of new customers or clients. If you’re a new business without any previous figures to work from, check out our article on setting yourself sales goals .

Also, remember to consider what kind of business you run when setting sales targets. If your business deals in very high-value transactions, one new client or sale a month might be enough, so don’t set unnecessarily high goals for the number of new customers.  

Tracking the number of new customers and sales you’re making through the week will give you a clear picture of whether you’re succeeding or not. The goal doesn’t have to be the total number of sales but the concept is always the same: set a target and track the progress you make towards that target. When you reach the target, you’ll know you’ve achieved some success.

As well as deciding what your goals will be, you should also think carefully about the time frame you set for achieving them. If you have annual sales targets instead of monthly, you might go an entire year without realising you’re nowhere near the mark you’ve set. Annual sales targets aren’t always a bad thing, but you need to make sure you also have weekly or monthly goals so you can make plans if you’re below target.

If you operate an online business, you rely on having a healthy stream of visitors to your website. Even if you run a brick-and-mortar store, you should still have a high-quality website in order to attract new customers. 

Analysing customer activity on your website is a great way to measure success as there’s so much information available. You track the number of visitors, and see how many of these visitors are new to your website and how many are returning customers. Furthermore, some software tools like Google Analytics can even track what visitors are doing on your website – whether they’re actually buying or just looking.

Website traffic is a good indicator of success because it can measure the success of many different parts of your business. For example, a lot of new visitors to your website can indicate the success of your marketing and advertising efforts. 

An increase in the number of visitors that make purchases can show your website is doing its job successfully, but an increase in visitors without a rise in purchases might indicate your product pages need to be more engaging to encourage sales.

Customers have an enormous influence on your business , so it’s in your best interest to see that they’re satisfied. Regularly checking that your customers are satisfied can give you an idea of how successful any changes have been. 

Simply asking customers if they’re satisfied is a pretty effective method – you can do this by getting them to fill in a survey after making a purchase, or to leave a review on your website.

Keeping an eye on social media will also give you a good insight into whether your customers are satisfied with your service. Searching different social media platforms for any mention of your company can show you what customers have been posting about you – both good and bad – and maintaining social media pages for your business provides a channel for customers to provide feedback directly.

Measuring your business’ success by tracking your sales is similar to the idea of setting goals, but is slightly more complicated. While you’re still going to track the number of sales you’re making over a set period of time, you need to combine this data with additional factors. 

These additional factors might be things like price increases or marketing costs. By examining sales figures alongside these other factors, you can get an idea of whether your business is succeeding or if these additional factors are preventing that success.

For instance, if your sales drop after a price increase, consider increasing the price by a smaller amount or reducing the price of your other products. Price increases are sometimes necessary, but you need to take care that they don’t negatively impact your business overall.

Let’s take another example, say you notice the money you’re making from sales doesn’t cover the amount you’re spending on marketing. This indicates your marketing strategy may not be as successful as it could be. Look into spending less on advertising or using more effective marketing methods where you can measure the return on investment (ROI) more easily.

The most obvious way to measure the success of a business is to simply check how much money you’re making. While this is an easy way to measure success, it’s not very detailed. You should sample a much wider range of financial data in order to get a clear picture of how well your business is doing. 

This being said, getting a detailed picture of your finances can be difficult if you rely on physical paperwork. If you want to have all of your financial data in one easy-to-access place, consider using Countingup.

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. It’s seamless, simple, and straightforward.

Find out more here .

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Successful Businesses Have This One Thing in Common I'm a professor of global healthcare entrepreneurship — here's what my research told me about a key component of a successful venture and how to leverage it.

By Wiljeana Glover • Apr 23, 2024

Key Takeaways

• Research I've done with colleagues at Babson College suggests founding teams with experts from multiple industries and fields are more likely to have the knowledge required for a successful business.
• To build a thriving partnership, find the right person by setting clear expectations, create a common language and develop shared measures of success.

Opinions expressed by Entrepreneur contributors are their own.

High-performing startups often feature strong founding teams that combine business-minded generalists and technical-expert specialists. The mythic founder who does it all is rare for good reason. The skill set that makes someone a top-notch developer or scientist isn't the same skill set it takes to raise capital and coordinate business operations.

The best partnerships pave the way for innovation and success. But partnerships can go wrong if business promises outstrip technical realities. Think of Theranos , the fraudulent blood-testing startup where claims to the public and investors never aligned with what the product could actually do.

As the founding faculty director of the Kerry Murphy Healey Center for Health Innovation and Entrepreneurship at Babson College, I often assist healthcare experts looking for business partners to push new ideas to market. Research I've done with Babson colleagues Candida Brush and Alia Crocker suggests interdisciplinary teams are most likely to have the knowledge required for a successful venture.

Here are three strategies to build and scale successful partnerships and companies.

Related: Want to Grow Your Business? Here's Why You Need Strategic Partnerships to Succeed.

Find the right person by setting clear expectations

Innovators looking to launch a product and business professionals looking for their next startup don't always share the same aims. When you meet a prospective co-founder, be upfront about your economic and mission-driven motivations and ask them to do the same. Check that you're on the same timeline. How fast do each of you want to move? If one person is eager to go to market and the other wants to slow down, you'll encounter serious problems.

Verify whether you share the same ethical approach about not cutting corners to make the next milestone, and make sure to discuss roles. In healthcare startups, for example, some scientists prefer to be silent partners rather than a prominent part of the business. So ask your potential co-founder: How involved do you want to be in the company?

Partnerships require compatibility , even as they flourish because each person brings different strengths to the relationship. Don't feel pressured to immediately settle down. If your prospective partner doesn't share your expectations, keep searching. Being up front early can save you and your team from disappointment and financial losses down the road.

You have options. Co-founder matching platforms such as Y-Combinator , Co-Founders Lab and others offer ways to connect. There are also specialist matching programs for particular industries. MassVX, founded by Vinit Nijhawan, serial entrepreneur and managing director of MassVentures, connects doctors and other scientific experts with entrepreneurs who have experience raising capital and running a business.

Related: What to Look For — And Watch Out For — When Selecting Partners to Fuel Your Brand's Success

Create a common language

Even before vetting partners, business-oriented entrepreneurs should become conversant in the field they're exploring. You don't have to be as knowledgeable as the technical expert on the innovation itself; that's why you're teaming up. But you should know the field well enough to discuss its potential. You can't position your company to succeed if you don't understand what your product does and why it's better than existing solutions.

If you're entering the healthcare industry, for example, you might attend relevant medical conferences and follow scientific discoveries. If you're wading into the gaming industry, you might attend gaming events, read industry reports and listen to leading podcasts. In 2024, every technical field features a wide range of accessible options to learn more.

At the same time, you'll want to find a technical partner who is open to understanding the business side. Before teaming up, you should offer a baseline explanation of your anticipated revenue model, customer base and market size. Are you a B2B company pitching a few large clients? Or a B2C organization that relies on individual consumer buy-in?

Once you find an expert who shares your language, keep the conversation going throughout the partnership. Reserve time for regular updates on how the product is progressing. Genuine curiosity from entrepreneurs makes technical experts feel understood, and helps you better do your job. You won't be tempted to fluff over the details when pitching to investors — a tactic that could eventually catch up with you.

Don't let these meetings become one-sided. You should keep your partner apprised of business progress. Teams only succeed when partners understand and build off each other's expertise in the pursuit of a common mission.

Related: Most Business Partnerships Fail — 5 Hacks to Make Sure Yours Stays Intact

Develop shared measures of success

You and your co-founder should track progress together. That initial agreement on expectations will be your North Star when setting product and financial milestones.

As an entrepreneur, you're responsible for making sure that fundraising doesn't outstrip results. If you go to series B and C and you're not keeping track of product development, eventually that omission comes to a head. For example, a 2022 study led by researchers at investment firm Rock Health and Johns Hopkins University found that 44% of digital health startups had no clinical trials or regulatory filings to stand on.

You should also help technical experts understand financial measures of success like revenue and customer win rate. Sometimes an engineer or scientist might feel like the businessperson is pushing the timeline too fast. Listen to those concerns. If you disagree, explain how your approach contributes to your organization's goals.

Profit and purpose can go together when entrepreneurs and technical experts are on the same page. That isn't always easy. Making these relationships work is an art. By setting expectations up front, communicating clearly and working toward shared measures of success, your partnership will reap rewards both for you and your business.

Entrepreneur Leadership Network® Contributor

Associate Professor of Operations and Innovation Management

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Change is inevitable in an organization; especially in the age of digital transformation and emerging technologies, businesses and employees need to adapt. Change management (CM) is a methodology that ensures both leaders and employees are equipped and supported when implementing changes to an organization.

The goal of a change management plan, or more accurately an organizational change plan, is to embed processes that have stakeholder buy-in and support the success of both the business and the people involved. In practice, the most important aspect of organizational change is stakeholder alignment. This blog outlines five steps to support the seamless integration of organizational change management.

Steps to support organizational change management

1.      determine your audience.

Who is impacted by the proposed change? It is crucial to determine the audience for your change management process.

Start by identifying key leaders­ and determine both their influence and involvement in the history of organizational change. Your key leaders can provide helpful context and influence employee buy-in. You want to interview leaders to better understand ‘why’ the change is being implemented in the first place. Ask questions such as:

• What are the benefits of this change?
• What are the reasons for this change?
• What does the history of change in the organization look like?

Next, identify the other groups impacted by change, otherwise known as the personas. Personas are the drivers of successful implementation of a change management strategy. It is important to understand what the current day-to-day looks like for the persona, and then what tomorrow will look like once change is implemented.

A good example of change that an organization might implement is a new technology, like generative AI (Gen AI) . Businesses are implementing this technology to augment work and make their processes more efficient. Throughout this blog, we use this example to better explain each step of implementing change management.

Who is impacted by the implementation of gen AI? The key leaders might be the vice president of the department that is adding the technology, along with a Chief Technical Officer, and team managers. The personas are those whose work is being augmented by the technology.

2.      Align the key stakeholders

What are the messages that we will deliver to the personas? When key leaders come together to determine champion roles and behaviors for instituting change, it is important to remember that everyone will have a different perspective.

To best align leadership, take an iterative approach. Through a stakeholder alignment session, teams can co-create with key leaders, change management professionals, and personas to best determine a change management strategy that will support the business and employees.

Think back to the example of gen AI as the change implemented in the organization. Proper alignment of stakeholders would be bringing together the executives deciding to implement the technology, the technical experts on gen AI, the team managers implementing gen AI into their workflows, and even trusted personas—the personas might have experienced past changes in the organization.

3.      Define the initiatives and scope

Why are you implementing the change? What are the main drivers of change? How large is the change to the current structure of the organization? Without a clear vision for change initiatives, there will be even more confusion from stakeholders. The scope of change should be easily communicated; it needs to make sense to your personas to earn their buy-in.

Generative AI augments workflows, making businesses more efficient. However, one obstacle of this technology is the psychological aspect that it takes power away from individuals who are running the administrative tasks. Clearly defining the benefits of gen AI and the goals of implementing the technology can help employees better understand the need.

Along with clear initiatives and communication, including a plan to skill employees to understand and use the technology as part of their scope also helps promote buy-in. Drive home the point that the change team members, through the stakeholders, become evangelists pioneering a new way of working. Show your personas how to prompt the tool, apply the technology, and other use cases to grow their excitement and support of the change.

4.      Implement the change management plan

After much preparation on understanding the personas, aligning the stakeholders and defining the scope, it is time to run. ‘Go live’ with the change management plan and remember to be patient with employees and have clear communication. How are employees handling the process? Are there more resources needed? This is the part where you highly consider the feedback that is given and assess if it helps achieve the shared goals of the organization.

Implementing any new technology invites the potential for bugs, lags or errors in usage. For our example with gen AI, a good implementation practice might be piloting the technology with a small team of expert users, who underwent training on the tool. After collecting feedback from their ‘go live’ date, the change management team can continue to phase the technology implementation across the organization. Remember to be mindful of employee feedback and keep an open line of communication.

5.      Adapt to improve

Adapting the process is something that can be done throughout any stage of implementation but allocating time to analyze the Return on Investment (ROI) should be done at the ‘go live’ date of change. Reviewing can be run via the “sense and respond” approach.

Sense how the personas are reacting to said change. This can be done via sentiment analysis, surveys and information sessions. Then, analyze the data. Finally, based on the analysis, appropriately respond to the persona’s reaction.

Depending on how the business and personas are responding to change, determine whether the outlined vision and benefits of the change are being achieved. If not, identify the gaps and troubleshoot how to better support where you might be missing the mark. It is important to both communicate with the stakeholders and listen to the feedback from the personas.

To close out our example, gen AI is a tool that thrives on continuous usage and practices like fine-tuning . The organization can both measure the growth and success of the technology implemented, as well as the efficiency of the personas that have adapted the tool into their workflows. Leaders can share out surveys to pressure test how the change is resonating. Any roadblocks, pain points or concerns should be responded to directly by the change management team, to continue to ensure a smooth implementation of gen AI.

How to ensure success when implementing organizational change                          

The success formula to implementing organizational change management includes the next generation of leadership, an accelerator culture that is adaptive to change, and a workforce that is both inspired and engaged.

Understanding the people involved in the process is important to prepare for a successful approach to change management. Everyone comes to the table with their own view of how to implement change. It is important to remain aligned on why the change is happening. The people are the drivers of change. Keep clear, open and consistent communication with your stakeholders and empathize with your personas to ensure that the change will resonate with their needs.

As you craft your change management plan, remember that change does not stop at the implementation date of the plan. It is crucial to continue to sense and respond .

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Measuring success in the face of wicked problems: climate action plan performance measures.

By Mary King

22 april 2024.

• 1 Local Governments, Wicked Problems, and Climate Action
• 2 The Role of Performance Measurement in Tackling Wicked Problems
• 3 Components of Successful Climate Action Performance Measures
• 4.1.0.1 Example: Palmerston North, New Zealand
• 4.2.0.1 Example: City of Edina, Minnesota
• 4.3.0.1 Example: City of West Hollywood, California
• 4.4.0.1 Example: City of Decatur, Georgia
• 4.4.0.2 Example: City of Minnetonka, Minnesota
• 5 Climate Action Plan: Measuring Change With A Wicked Problem
• 6 Get the Guide ↓

  Some challenges are so complex, interconnected, and stubbornly resistant to resolution that they defy traditional problem-solving approaches. These are known as “wicked problems.”

Originally coined by philosopher C. West Churchman, and popularized by social scientists and design theorists Horst Rittel and Melvin Webber in the 1970s, wicked problems are characterized by their multifaceted nature, lack of clear solutions, and tendency to generate unintended consequences.

In this series, we’ll look at how local government organizations are uniquely set up for tackling wicked problems, and why measuring performance is a key strategy in doing so!

And, because it’s Earth Day, we wanted to kick this series off with an exploration of climate change—one of the most glaring examples of a wicked problem.

Local Governments, Wicked Problems, and Climate Action

Climate change is no longer a distant threat; it is a pressing reality. We’ve talked before about the critical role that local governments play in taking climate action. But what are the markers of success, and what kind of performance measures should be at play?

How do cities, urban areas, counties, and other local government organizations know when they’re hitting the mark on their climate action plan?

In this post, we’ll take a detailed look at how cities are tackling the wicked problem of climate change through effective performance measurement strategies. We’ll highlight some of the best climate action plans, effective performance measures, and real-world examples of climate action by innovative local governments in North America and beyond.

The Role of Performance Measurement in Tackling Wicked Problems

Wicked problems are not just complicated. They are characterized by being inherently messy, involving multiple groups with conflicting interests, uncertain and changing variables, and shifting contexts. Climate change exemplifies the wicked problem archetype, as it encompasses a myriad of interconnected issues, including rising temperatures, extreme weather events, a lack of collaboration between major decision-making entities, biodiversity loss, and socioeconomic disparities. To take effective action against climate change means addressing virtually every societal system we have in the world.

On the plus side, while wicked problems may not have one definitive solution, they can be managed and mitigated through adaptive, agile, collaborative approaches. Local governments have a unique ability to create and adapt systems in an immediate and tangible way.

Performance measurement plays a crucial role in this process by providing local governments with the tools to track progress, evaluate the effectiveness of interventions, and adapt strategies in response to changing conditions. By measuring change and monitoring key indicators, cities can gain insights into the complex dynamics of climate change and make informed decisions to address its impacts.

Components of Successful Climate Action Performance Measures

We love talking about SMART actions (Specific, Measurable, Achievable, Relevant (and Resourced), and Time Bound), and those should all be a part of an effective climate action plan.

Relevance and Measurability are of particular importance for tackling a wicked problem like climate change. The measures chosen must be directly related to the goals and objectives outlined in your climate action plan. Whether it’s reducing greenhouse gas emissions, increasing renewable energy usage, or enhancing resilience to climate impacts, measures should align with your overarching objectives. Making sure they’re measur able is also important to allow for accurate tracking of progress and realistic targets and benchmarks.

But there are two additional components that should be included for climate change mitigation and climate action planning. They are:

Data Accessibility: Access to reliable data is crucial for effective performance measurement. Cities should invest in robust data collection and management systems to ensure the availability of accurate and up-to-date information.

Transparency: Transparent reporting of performance data fosters trust among community members as well as other cross-sector organizations and government agencies that may be involved in implementing climate action plans. Cities should strive for openness and clarity in their communication of climate action progress.

The plans that we will be exploring through the rest of this article make careful use of SMART performance measures, as well as being exceptional examples of data accessibility and transparency through their Envisio public dashboards .

Not sure how your community compares? Check out our new integration with Polco Track , for out-of-the-box community livability indicators around Natural Environment, and kick start your journey!

Performance Measures and Climate Action Plans

Let’s explore some of the best climate action performance measures, along with real-world examples of climate action plans from cities at the forefront of these efforts.

Climate Action Plan Performance Measure: Greenhouse Gas Emissions Reduction

Reducing greenhouse gas (GHG) emissions is usually the primary objective of climate action plans worldwide. Cities often measure their progress in this area by tracking the total emissions within their jurisdiction and setting targets for reduction. One effective measure is the per capita GHG emissions, which divides the total emissions by the city’s population to provide a standardized metric.

Example: Palmerston North, New Zealand

Palmerston North’s City Council has established a goal of achieving a 30% reduction in net greenhouse gas emissions by 2031 (from the baseline of 2016/2017). You can chart their progress on their public dashboard , which illustrates the levels of net emissions alongside these targets. In 2022, there was a notable 41% decrease in electricity emissions, attributed to the increased utilization of cleaner energy sources.

Climate Action Plan Performance Measure: Renewable Energy Usage

Transitioning to renewable energy sources plays a crucial role in decarbonizing the economy and reducing reliance on fossil fuels. Cities can measure their progress by tracking the percentage of energy consumed from renewable sources, such as wind, solar, and hydroelectric power.

Example: City of Edina, Minnesota

The City of Edina collected data across eight distinct climate sectors:

• Transportation and urban planning
• Building and energy usage
• Waste management
• Water and sewage systems
• Local food production and agricultural practices
• Green spaces and forestry
• Climate-related health and safety
• Climate economy

They measure performance carefully across all these strategic areas, with each one breaking down into specific goals that are distinctly measurable. For instance, let’s take a look at their strategic action regarding transportation, “Decrease community wide VMT by 7% by 2030.”

As you can see, this particular goal is measured through the implementation of specific actions . They have data around partnering with businesses and institutions to incentivize public transit use, and they’re creating shared van services for employees. They’ve been increasing opportunities for car-poolers, and improving non-car infrastructure through specific, measurable programs.

Climate Action Plan Performance Measure: Water Conservation

As climate change brings about more frequent and severe weather events, cities must enhance their resilience and adaptability to withstand and recover from these impacts.

Commonly tracked and important performance indicators for resiliency are around water conservation efforts.

With wicked problems, exacerbation of one area typically creates more problems in another, because the solutions are not discrete. They are interconnected.

As climate change exacerbates water scarcity and strains existing resources, effective conservation measures become paramount for mitigating the impacts on communities. By reducing water consumption, municipalities not only contribute to broader climate resilience but also alleviate pressure on ecosystems and support sustainable water management practices.

Some examples of water conservation performance measures include:

• Per capita water consumption: Tracking the average water usage per person over time to gauge the effectiveness of conservation efforts.
• Percentage of households enrolled in water conservation rebate programs: Monitoring the uptake and impact of rebate programs that incentivize residents and businesses to invest in water-saving technologies such as low-flow fixtures, efficient irrigation systems, and rainwater harvesting.
• Number of reclaimed water systems (over a set period of time): Tracking the expansion and utilization of reclaimed water systems for non-potable uses such as irrigation, industrial processes, and toilet flushing to reduce demand on freshwater sources.

These are only three examples, but there are many more. If you want to do a deep dive into a customer of ours that really knows their stuff about water conservation, we invite you to take a peek at Sonoma County Water Agency . Their strategic plan is aimed at staying ahead of the climate curve and the impacts it will have on water access in a changing climate. They are a great resource for learning more about municipal water conservation.

As for a city with concrete action plans around adaptability and water conservation… allow us to introduce you to West Hollywood.

Example: City of West Hollywood, California

West Hollywood is trying to tackle the reality of their imported water supply, which has been impacted by a diminished snowpack and other effects of climate change. As a contract city, West Hollywood relies on water imports from Beverly Hills and LADWP, without direct control over groundwater resources.

They’ve demonstrated remarkable progress in water conservation efforts since the launch of their 2011 Climate Action Plan. Through collaborative efforts with agencies such as the West Basin Municipal Water District, West Hollywood has significantly decreased community-wide water consumption and implemented water-efficient practices in municipal facilities and grounds, including creating better opportunities for collaboration with Indigenous people, such as the Tongva people, on groundwater management practices.

Climate Action Plan Performance Measure: Availability of Green Space/Percentage of Trees Planted

Increases in green space not only enhance the aesthetic appeal of cities but also provide numerous environmental benefits. Some of these benefits include carbon sequestration, air purification, and heat island mitigation . Cities can measure their progress in this area by tracking metrics such as tree canopy coverage, or green space per capita.

Example: City of Decatur, Georgia

The Decatur team is weaving climate policies into broader initiatives that tackle transportation, housing, and equity. Their strategic plan involves strengthening partnerships with governments and non-profits at all levels, to further amplify their overall capacity for collective action. Decatur also recognizes that a failure to act will exacerbate existing social and economic disparities, burdening those already marginalized. Action on climate change, as outlined in their strategic plan, is not just a matter of environmental stewardship, but of social justice.

One of the areas they are working on is creating processes and incentives for preserving (and increasing) green spaces in the city. Some of this work is related to sustainable building and infrastructure, and other plans are related to literally increasing the amount of usable green space and parkland available to their community.

Example: City of Minnetonka, Minnesota

Another pioneering city in measuring climate action and impact is Minnetonka. They measure trees planted and conservation acreage, and are working to improve their forested areas.

But that’s not all!

The Minnetonka team also measures the level of resident satisfaction with how climate action and environmental stewardship information is disseminated! This is climate action matched with concrete performance measures, and transparency, at its best.

Climate Action Plan: Measuring Change With A Wicked Problem

Measuring trends and change is essential for tackling any wicked problem, and is especially important for effective climate action planning. By employing the right performance measures, local governments can track their progress, evaluate the effectiveness of their initiatives, and make data-driven decisions to accelerate the transition to a cleaner, more resilient future. From reducing greenhouse gas emissions to enhancing urban green spaces, the examples highlighted here demonstrate the diverse strategies cities are employing to combat climate change.

Get the Guide ↓

Action is the antidote to hopelessness when it comes to wicked problems. Download our free guide on How to Develop Local Government Performance Measures and let us help you take steps towards actionable solutions.

Mary King is a professional writer and researcher based in Toronto. She comes to Envisio with a Masters Degree, where she researched the relationship between the disappearance of urban public spaces, and high level decision-making processes in local governments. For nearly a decade, Mary has worked as a community organizer, promoter, and supportive researcher in a variety of nonprofits and think-tanks, and her favorite area of focus was in connecting local artists with marginalized youth. Since 2017, her writings and research on policy, local governance, and its relationship to public art and public space has been presented at conferences internationally. She has also served as both a conference chair and lead facilitator on professional and academic conferences across Canada on how to better bridge academic research with local change-agents, policy makers, artists, and community members. Envisio’s mission of excellence and trust in the public sector maps onto Mary's interest in local government and community mobilization. She loves working at Envisio because she cares about having well organized, strategic, and transparent public organizations and local governments. Mary is also a creative writer and musician and has been supported in her practice by the Canada Council for the Arts. Her stories can be found in literary journals across Canada.

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What is Ethical Leadership and Why is it Important?

Ethical leadership is not only the right thing to do, it is key to driving an organization's success.

Valerie Kirk

Errors, bad behavior, and poor judgment in leadership can negatively impact a company’s brand and reputation. For business success, it’s critical for organizations to fill their C-suite with ethical leaders.

Ethical leadership involves leaders and managers making decisions based on the right thing to do for the common good, not just based on what is best for themselves or for the bottom line. While profits are important, ethical leaders take into consideration the needs of customers, communities, and employees in addition to company growth and revenue when making business decisions. 

Ethical leaders encourage their team members to model this behavior, too. They help to build a workplace culture that values transparency, collaboration and inclusion, and where everyone feels safe to share their voice.

They can also help organizations recruit and retain top talent. Professionals are increasingly seeking out companies whose leaders strive to do the right thing. Generation Z, who will make up 25 percent of the workforce by 2025, demands leadership ethics more than generations that came before them. 

“Gen Z is not going to negotiate. They have really strong values and ethics, and they don’t bend them because of intimidation or because they are just getting a paycheck,” said Michael McCarthy, instructor at Harvard Division of Continuing Education’s Professional & Executive Development and host of the “ Happy at Work ” podcast. “The idea of letting harmful or hurtful behavior slide is not acceptable.”

Leaders who weigh ethical considerations before making key business decisions drive a company’s long-term success. 

The 6 Main Principles of Ethical Leadership

Having ethical leaders isn’t as simple as hiring “good” people. Companies should strive to fill their leadership ranks with people who embody the principles of ethical leadership. The six main principles include: 

Respect includes valuing others’ skills and contributions. While historically respect in the workplace may have been one-way (leaders demanding respect from employees), in an ethical work environment, respect is mutual. 

Mutual respect leads to healthier workplace relationships where both sides appreciate and support what the other is doing and feel secure in talking through issues and challenges. Healthy relationships create positive work environments, which drives increased productivity.

Current and upcoming business leaders should take mutual respect into account as workforce expectations continue to shift.  

“I tell current leadership to respect Gen Z. They have values and morals, and you’re going to have a better organization because of them,” McCarthy said. “They aren’t going to put up with the old hierarchy that doesn’t offer mutual respect.” 

2. Accountability

Ethical leaders hold themselves accountable for their actions. They make decisions based on integrity and stand behind their work. They also lead by example, communicate openly about challenges, and don’t look to place blame on others for any shortfalls.

Leaders make ethical decisions based on doing what is right for employees, customers, and the community. Because these constituents are always top of mind for ethical leaders, they often have a strong sense of service. They engage in activities such as charitable giving and volunteer work to give  back to their communities — and encourage their teams to do the same. 

Leaders who are transparent build trust amongst their organizations and amongst customers. 

To build and maintain trust, leaders must be good communicators who speak openly and honestly about issues. Regardless of the issue’s severity or unpopularity, leaders’ responsibility to be clear and candid  empowers others to make the right decisions with the information they have. 

Honesty and transparency also help to build a brand’s reputation, leading to long-term customer loyalty.

Justice is not just about following the law, but about ensuring that everyone is getting what they deserve. Ethical leaders approach situations with a focus on treating everyone fairly, and they expect their teams to treat each other and customers the same way. Through their actions, they build equitable work environments where everyone feels respected. 

6. Community

Ethical leaders view their companies as communities and consider everyone involved when evaluating situations and making decisions. By viewing their organizations this way, they build equity and inclusion into their decision-making process and create work environments that encourage collaboration across teams. 

Learn more about Harvard DCE’s Ethical Leadership program

Examples of Positive and Negative Ethical Leadership

The following three examples are of companies that were faced with ethical dilemmas and how different leadership styles led to vastly different outcomes. 

Johnson & Johnson

One of the most famous examples of ethical leadership was the case of the Tylenol cyanide poisonings in the early 1980s. Seven people died of cyanide poisoning, and the only connecting factor was that they had all taken extra-strength Tylenol. During investigation, it was discovered that the tablets were laced with cyanide.

Johnson & Johnson’s leaders acted quickly and pulled all Tylenol products off the shelves — 31 million bottles, worth over $100 million — and stopped all production and advertising. The swiftness of their decision, although costly, put customers’ well-being first and saved lives.

They partnered with law enforcement to find the perpetrator and subsequently developed the first-ever tamper-resistant packaging. They were transparent with the public about what they were doing to ensure this tragedy never happened again. 

The Tylenol brand recovered from the incident, largely because of Johnson & Johnson’s ethical leadership team’s swift action and transparent care for customers.

In 2008, JetBlue left passengers stranded on the tarmac at the John F. Kennedy International Airport for more than five hours during a snowstorm. The delay had a ripple effect — JetBlue had to cancel more than 1,000 flights over the following five days.

In response, JetBlue’s CEO wrote a letter of apology to customers. He also directed his team to draft a customer bill of rights, which outlined customers’ rights to information about flights and information about compensation in the event of delays or cancellations.

The CEO also participated in a public apology tour, taking full responsibility for the incident rather than blaming it on the weather.

His transparency and accountability created trust with customers, who stayed loyal to the airline.

Wells Fargo

In September 2016 , it was revealed that employees of Wells Fargo, one of the largest banks in the United States, opened millions of unauthorized accounts in order to meet aggressive sales targets. This widespread fraudulent activity was the result of a work culture that prioritized quantity over quality and pushed employees to engage in unethical practices.

Company leaders denied knowledge of fraudulent practices. The bank was hit with significant financial penalties, but because of the lack of accountability, they damaged the trust of their customers and investors. They reported a 50 percent profit loss in the quarter following the scandal.

Meeting the Ethical Challenges of Leadership

Companies cannot underestimate the power of different leadership styles on their growth and long term success. Those who practice ethical leadership have positive corporate cultures where employees are engaged, motivated, and feel good about coming to work. Companies without ethical leadership face lower productivity and high turnover rates, impacting the organization’s bottom line.

Ethical leaders aren’t just born with these skills — they develop them over years of experience and training. 

Harvard DCE Professional & Executive Development offers a two-day Ethical Leadership program that helps leaders develop skills to make ethical choices and lead companies through challenging dilemmas. 

Topics covered include: 

• Making ethical decisions with conflicting responsibilities 
• Building a moral framework within yourself and the organization
• Understanding the role of employees in both their professional and personal lives 
• Navigating a slippery slope when seemingly good people do bad things
• Building a corporate culture that values moral behavior

Learn more about the ethical leadership program, including how to register.  

Leaders looking to expand their ethical leadership skills should also consider the two-day Authentic Leadership program , where they will learn how to develop mindfulness and authenticity to build trust, create engagement, and promote productivity. 

Explore all Executive Leadership and Management courses

About the Author

Valerie Kirk is a freelance writer and corporate storyteller specializing in customer and community outreach and topics and trends in education, technology, and healthcare. Based in Maryland near the Chesapeake Bay, she spends her free time exploring nature by bike, paddle board, or on long hikes with her family.

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Harvard Division of Continuing Education

The Division of Continuing Education (DCE) at Harvard University is dedicated to bringing rigorous academics and innovative teaching capabilities to those seeking to improve their lives through education. We make Harvard education accessible to lifelong learners from high school to retirement.

House Republicans have a wacky new plan to finally pass Ukraine aid — and force a sale of TikTok

• For months, Israel and Ukraine aid have stalled in the House. That's about to change.
• Speaker Johnson is planning separate votes on the aid in order to ease GOP opposition.
• He's also including a bill that gives TikTok's Chinese owners one year to sell off the app.

For months, the House has been sitting on a bill that would provide aid to Ukraine, Israel, Taiwan, and humanitarian funding for Gaza.

That's about to change on Saturday.

House Speaker Mike Johnson — working with House Democrats — is holding separate votes on aid to Israel, Ukraine, and Taiwan, along with a bill that would force TikTok's Chinese owners to sell the app within the year.

It's a modified version of a $95.3 billion aid package that passed the Senate by a strong bipartisan margin in February. In an effort to deal with increasingly complicated politics on both Ukraine and Israel aid, he's holding separate votes on each component, then bundling it up and sending it to the Senate.

All of this is happening as Johnson contends with Rep. Marjorie Taylor Greene's threat to call a vote on his ouster if he allows more Ukraine aid to pass.

Here's what's in the four bills

The contents of the four bills largely mirror the contents of the Senate-passed bill, just broken into parts. Each will receive an individual vote.

Israel aid: $26.38 billion total, including $14.1 billion in military aid to Israel, $2.4 billion for US military operations in the Middle East, and $9.2 billion in humanitarian aid for Gaza. Funding to the United Nations Relief and Works Agency (UNRWA) remains prohibited following a report that some employees participated in the October 7 Hamas attack, a move likely to anger progressives.

Ukraine aid: $60.84 billion total, $23.2 billion of which will go toward replenishing US weapons stockpiles. It also allows the aid to Ukraine to be structured as a loan.

Taiwan aid and Indo-Pacific military funding: $8.12 billion total, including $3.3 billion for US submarine infrastructure, $2 billion in military aid for Taiwan, and $1.9 billion to replenish US weapons already given to Taiwan and other countries.

TikTok bill and other provisions: A package that includes a recently passed bill to force the sale of the popular app TikTok, a bill to confiscate Russian assets , and more. In contrast to a version of the TikTok bill that passed the House last month, this one would extend the amount of time for the sale to roughly a year, easing some senators' concerns.

Many Republicans oppose Ukraine aid, while Democrats are increasingly skeptical of Israel aid

Johnson's plan is aimed at addressing two separate pockets of opposition to the foreign aid package.

After October 7, the Biden administration and Senate leaders insisted on tying Israel and Ukraine aid together, with the idea being that including Israel aid would incentivize Republicans to swallow more Ukraine aid.

Republicans, hoping to avoid that, have made numerous attempts at passing Israel aid on its own , but they've either failed or been stalled in the Democratic-controlled Senate.

Democrats unanimously support Ukraine aid, and there are plenty of Republicans — including Johnson, a former Ukraine skeptic — who feel the same, meaning a majority of the House would vote to approve it.

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But as the war in Gaza has unfolded, and the Democratic base has increasingly turned against the war as civilian casualties mount, Democrats have grown to be either outright opposed to the Israel aid or supportive of conditions.

Johnson's plan is designed to allow progressive Democrats to vote against Israel aid, while hard-right Republicans can vote against the Ukraine aid — all while allowing the whole package to move forward.

Nancy Pelosi pulled off a version of this back in 2007

There's some precedent for what Johnson's trying to do here.

After retaking the House in 2007, Democrats faced pressure to continue funding the War in Iraq — but most House Democrats were opposed to that.

To solve the issue, then-House Speaker Nancy Pelosi tied the funding to an increase to the federal minimum wage, while keeping the votes separate.

Thus, Democrats got a win — increasing the minimum wage by $2.10 — while Iraq war funding passed the House and made it to then-President George W. Bush's desk.

The hard-right is still furious, and Johnson could face a vote to oust him

Many hard-right Republicans remain opposed to this plan, and on Tuesday, Greene won a new ally: Rep. Thomas Massie of Kentucky, who is co-sponsoring the Georgia congresswoman's "motion to vacate" and is now calling on Johnson to resign.

I just told Mike Johnson in conference that I’m cosponsoring the Motion to Vacate that was introduced by @RepMTG . He should pre-announce his resignation (as Boehner did), so we can pick a new Speaker without ever being without a GOP Speaker. — Thomas Massie (@RepThomasMassie) April 16, 2024

Of course, both Greene and Massie are outliers among House Republicans — they were the only two lawmakers to vote against every single Russia-related bill following the start of the Ukraine war in 2022 — but Johnson has little room for error given Republicans' dwindling vote margin.

Several Democrats have said they would oppose an effort to oust Johnson, a break from their unanimous support for Kevin McCarthy's ouster in October.

But all of this depends on what happens on Saturday, and if the aid is actually passed.

"In the absence of an organized, logical demonstration of leadership, I'm not making any promises," said Democratic Rep. Abigail Spanberger of Virginia, who previously indicated a willingness to save Johnson in exchange for more Ukraine aid.

It's all likely to pass both chambers and be signed into law

While Democrats and some Republicans have generally expressed some skepticism about the plan, they're willing to do whatever it takes to get the foreign aid package approved.

Ultimately, there are majorities in the House and Senate for each component of this bill — it's just that the coalitions behind them are different.

The Senate is likely to take up votes on the combined package sometime next week, and President Joe Biden has said he will sign it into law.

That means Ukraine is going to get the help it needs to continue fighting, Israel will get the military aid that some progressives have called for Biden to halt, and TikTok will have roughly a year to be sold off — or it will be banned in the United States.

Watch: Highlights from Biden's fiery State of the Union address

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How to perform effective risk management during event planning.

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Sonali Nair is the Chief Executive Officer at Segment Agency .

If the past few years have taught us anything, expect the unexpected. That unpredictability extends to events and reminds us that effective risk management is an often unspoken key to success. Whether we're talking about severe weather disruptions, political instability or, of course, the impact of a global pandemic, the reality is that even the most meticulously planned events can face unforeseen challenges.

However, unmitigated risks can lead to logistical nightmares, damaged brand reputation, financial losses and harm to staff and attendees. Consider the Woodstock '99 music festival in Rome, New York—a clear example of event holders' absolute failure in planning for potential risks. With a range of issues, including a lack of drinking water, proper accommodations or fire prevention, this infamous event is often called " the day the Nineties died ."

A robust risk management strategy protects the investment of time and resources of those planning or executing an event. It also helps ensure attendees' safety and overall satisfaction. Let's look at some of the nuances of risk management in event marketing and how to identify potential risks—and best prepare for them.

The Critical Role Of Risk Management

Risk management is about more than averting disaster at an event; it's about ensuring you can craft experiences for your audience that are memorable for the right reasons. In 2021, 67% of event professionals said they include safety and security measures in their meetings and event policies. But effective risk management goes beyond merely identifying potential hazards and drafting safety policies.

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A comprehensive strategy includes contingency plans so you can efficiently tackle the unexpected. Event planning that incorporates more-thorough risk assessment and management can ensure enhanced operational efficiency and projects a more professional brand image to attendees, guests, investors and sponsors. Additionally, events that run smoothly are more likely to stay within budget, avoiding costly last-minute changes or cancellations.

Identifying Potential Risks When Event Planning

Accurately identifying potential risks for your event is like setting the foundation for success. Your risk assessment plan should include everything from logistical challenges and technology failures to financial/budget overages, reputational concerns, natural disasters and health-related emergencies (it's impossible to forget everything that Covid-19 canceled). There are various tools and strategies you can use for risk assessment. Here are some examples.

• A SWOT Analysis: Consulting with your team to conduct a Strengths, Weaknesses, Opportunities and Threats analysis. This process helps you critically identify and categorize all possible internal and external factors that could impact your event.

• A PESTLE Analysis: Performing a Political, Economic, Social, Technological, Legal and Environmental assessment offers a broader perspective of potential risks. It can help you understand the more prominent macro-environmental factors that could impact your event.

• Risk Matrices : Once you've identified potential risks relevant to your situation, you can plot the likelihood of these risks occurring against their likely impact.

With the right tools in place and adequate strategic planning, event marketers can accurately identify potential risks and ensure they're equipped to deliver a successful, safe event.

Developing A Comprehensive Crisis Management Plan

A comprehensive crisis management plan is a critical aspect of risk management for event marketers It's often the difference between swift recovery and prolonged disaster. There are three key steps to developing an effective plan.

1. Put Together A Team: Establish a crisis management team with clearly defined roles and responsibilities.

2. Perform Assessments: Conduct a thorough risk assessment, identifying potential crises and outlining mitigation strategies.

3. Determine Solutions: Develop a detailed response plan for each identified risk, including both immediate actions and long-term recovery strategies.

Be sure your plan includes a comprehensive communication strategy that outlines how to deliver information to staff, attendees, applicable stakeholders and the media/public. It should be clear, concise and adaptable to different scenarios. For example, in 2018, high winds forced Coachella to delay the opening of its on-site camping. This was clearly communicated to attendees and the public via a variety of media outlets, including social media.

Flexibility and adaptability are crucial in crisis and risk management. If you're an event planner or marketer, you likely already have contingency plans for specific situations, like backup mics for speakers or extra programs printed. When it comes to accurate crisis management, the concept is the same, just on a bigger scale. You must be ready to modify your plans as situations evolve.

Insurance Considerations

Once you have your crisis management in place, it's an excellent time to consider the necessary insurance relevant to your event. While required for regulatory compliance, it's also a significant strategic move to safeguard your organization against unforeseen financial risks. Understanding what is and isn't covered is critical to prevent surprises should you have to make a claim.

Always read the fine print and seek clarity on any unclear terms. Be sure to look at the following details closely.

• Liability: You need to know what claims are covered related to injuries or property damage caused by the event.

• Cancellation: Increasingly crucial in uncertain times, this can protect you against financial losses from cancellations or postponements.

• Property: This covers damage to the venue or rented equipment.

• Health And Safety: This coverage is essential for medical incidents/accidents that staff and attendees endure.

Investing time and resources in understanding and choosing the right insurance coverage is about more than just compliance. It will help ensure your event's financial stability and sustainability under any circumstances.

Turning Challenges Into Opportunities

Adeptly navigating risk management in the event industry is more than just dodging obstacles that may come your way. It's about turning challenges into opportunities for innovation and improvement. One example is the innovation found in hybrid and virtual events that arose at the height of the pandemic. When circumstances forced organizations to pivot, they found remarkable success and made long-lasting impacts on the future of the event industry. A proactive approach to risk management can lead to groundbreaking advancements and new, creative ways to reach and engage with your intended audience.

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