Help with Key Indicators

Key indicators are what you consider to be the most critical data to keep an eye on. They should be used not only to see how you’re doing, but also to help you make decisions about where you may need to change your course.

The Balanced Scorecard – made popular by Kaplan and Norton of Harvard – gives some clues to what to watch. First – consider at least the following four categories for your business/organization:

Financial measures
Customer measures
Internal operations measures
People measures

Next you need to think about indicators as “lagging” or “leading.” Lagging indicators tell you what’s already happened – revenue reports, customer satisfaction surveys, number of complaints, etc. Leading indicators help you predict what will occur. They are more causal in nature – employee skill levels, number of new clients attained, work in process, etc. If you select to watch the “right” mix of leading indicators – or drivers – you can predict the effect they will have on future business. These are often the more critical indicators to watch so you can make adjustments to change probable outcomes for the better.

Finally, select at least one key indicator to watch on the personal side. You may wish to include something from the following categories:

Personal finances
Family and spouse relationships
Leisure time
Personal health
Spiritual health

Go to our DropBox Page for an Excel spreadsheet template for tracking your key indicators.

Some Examples of Key Indicators

Accounts payable
Banking relationship
Cash flow
Dollars per rep
Expenses (especially as %)
Gross margins
Gross profit per day
Quarterly profit
Working capital $ and %
Book to bill ratio
10 week booking average
Income per employee
12 month rolling return on assets
Trailing 12 Months of Revenue (Kramers)
Same store sales year to year
Labor as % of product cost
Write downs/offs
Line of credit and line drawn
Receivables over 60 days/average days
Customer “comps” as % of sales
Z-Score (Waring
Return on net worth (Fleisher)
Sustainable growth rate (Waring)

Customer satisfaction (time, price, quality)
Market share
Customer acquisition
Repeat business/customer retention
Number of customer referrals
Number of active customers
Customer value & profitability

Employee turnover/retention
Employee morale
Training as % of sales
Human/intellectual capital
Training performance
# of promotions/year
# of patents/employee
# of hours of training/employee/year

Internal Operations
Inventory (per time unit)
Labor costs/sales
New orders
Vendor relations
Sales to plan
Unit sales
Number of new stores opened
Bid list – open proposals
% of success on bids
Days to close
$ volume of quotes
Number of new product ideas
R&D as % of sales (from new products or old)
Time to develop new product
Average time to market
Process time measures
Quality measures
Process costs – per run, per unit
Order to ship cycle times

Amount of money saved for retirement/college
# of hours spent in leisure/work
# hours spent with spouse/family/work
time/quality of spiritual health
time/quality of physical health