Consistent high performance is essential to every business. Do you have a way to maintain it?
Consistent high performance is a result of close monitoring of the critical drivers that are causal to success. This means when you monitor these drivers, their respective KPIs, you can adapt your plan of action.
For example, a retailer wants to grow revenue. Revenue growth depends on many factors: product offerings, store traffic, conversion rate, inventory availability are just a few of them. These are the drivers to revenue growth. So monitoring them would be useful.
Let’s focus on a couple of these factors: conversion rate and inventory availability.
The conversion rate is the percentage of customers who visit the store end up leaving with a purchase. High store traffic is good but it doesn’t help revenue growth when customers come and browse only.
By monitoring the conversion rate, you want your sales staff focus on helping customers with making a purchase when they are in the store. This is proactive.
On the other hand, the probability of losing a sale when an item is not in stock is high. Inventory availability can be reflected through the stock-out rate. A high stock-out rate indicates poor demand and supply planning. Marketing and Purchasing need to do a better job.
Better forecasting and collaboration between the two departments would help to ensure there is adequate inventory.When you understand what the critical drivers are and monitor them closely, you can take proactive action in a timely manner. Click To Tweet
When you understand what the critical drivers are and monitor them closely, you can take proactive action in a timely manner. You adapt your actions by drawing insight from the driver KPIs. This helps to achieve consistent high performance.
What are your drivers to success? Are you monitoring them?