What metrics should you use to evaluate your company's performance?

Beyond revenue and profit, consider the invaluable assets of brand equity and customer loyalty as vital indicators of a company's enduring success and resilience. These intangibles wield significant influence, shaping consumer choices and contributing to long-term sustainability.

On Revenue and Profit: - Year-to-date Revenue and Profit Growth - Five year trends in absolute Revenue and Profit - Disaggregated contributions to Revenue and Profit by sales region/geography, customer type, product type - Contribution of innovation to Sales and Profit

I like to consider EBITDA (for mature business) as the most import metric to evaluate the business. Net profits (-) COGS and SG&A can bring a good picture about the capital generation. Considering start-ups it’s important to consider CAGR, cost of acquisition (cac) and LTV.

Trends are way more important than just absolute numbers. You need to understand the health of your business seeing if you are growing upwards YoY basis. Your metrics of growth would be Revenue QoQ, comparative to last year and profit QoQ or YoY basis. Apart from this NPS and churn rates are the most important metric to track.

Financial indicators like revenue growth, profit margins, cash flow, and ROI show financial health. Customer metrics, including satisfaction, retention, and NPS, reveal customer loyalty. Operational efficiency is assessed through resource use, quality, and lead times. Employee satisfaction, turnover, and training investments gauge workforce health. Innovation metrics cover R&D, product launches, and IP protection. Market metrics track market share, competitors, and trends. Sustainability, risk management, compliance, strategic goals, and tech adoption round out the assessment. Regularly adjusting these metrics to industry and goals is vital for lasting success.

Cash flow is not simple thing as it looks . Revenue , payments received - so much critical in real life as revenue/sales if doesn’t convert in properly received . Business can come to standstill - suppliers, party cash, small vendors , employees all go in haste

Cash flow plays an important role in the health of any business. A negative cash flow but profitable business is not sustainable. Positive cash flow also helps in reducing the cost of financing and lending, hence increasing profit. Cash flow can be leveraged over increasing profits and in expansion if used correctly. Else, it will be of no use. It can be used to stay debt free, managing SCM, reducing costs, expansion, further Investment etc.

Even if your company is seeing a spike in sales, it’s difficult to know whether the business is truly performing well without understanding what metrics should be used to measure performance. Performance metrics can help you determine where your resources are going, how they’re being used, and if areas of improvement are needed. KPIs, or Key Performance Indicators, are measurements that help you determine the effectiveness of your business. Every business should have a small selection of KPIs that together, give them a view of whether they’re on track. KPIs offer a way for businesses to evaluate their performance in terms of specific goals and objectives.

1. Cash Budgeting - Use a cash budget to manage ALL your cash receipts and payments. It flags liquidity gaps and puts spending in perspective 2. Accounts Receivables ageing analysis to show how much is owed and for how long to drive collection strategies to improve cash flow

Customer satisfaction is, along with employee satisfaction, one of the key sustainable measurement as it ensures reliable and longer-lasting focus on quality of service and product

Satisfied customers are more likely to repeat purchases, leading to increased revenue and a higher customer lifetime value. Positive customer experiences contribute to brand reputation and word-of-mouth marketing, attracting new customers. Conversely, low satisfaction can result in customer churn, negative reviews, and damage to the company's image. Monitoring and improving customer satisfaction not only enhance financial metrics but also align with long-term success, fostering a positive relationship between the company and its clientele. Prioritizing customer satisfaction is a strategic investment in sustained business growth and competitiveness.

1. Identify top 10 customers or sources of sales 2. Identify repeat customers 3. Average purchase per customer 4. Purchases based on referrals 5. Why customers prefer or buy from you

To evaluate your company's customer satisfaction performance, key metrics include Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES). NPS measures the likelihood of customers recommending your business, CSAT gauges overall satisfaction with a specific interaction, product, or service, and CES assesses the ease of customers' experiences. Additionally, monitoring customer retention rates, feedback and complaint resolution times, and social media sentiment provides valuable insights into customer satisfaction. Regularly tracking and benchmarking these metrics helps in understanding customer sentiment, identifying areas for improvement, and fostering long-term customer loyalty.

Customer satisfaction - repeat sales n word of mouth are real parameters of a cross check of healthy organization . Organic feedback is the only real indicators n reliable and true ones

I agree but, as for customer satisfaction, it must be continuous and measured over a longer period of time with incremental improvements.

Key metrics for evaluating Employee Engagement include eNPS, ESAT, turnover rates, absenteeism, and employee feedback. Tracking career development, recognition programs, and internal communication effectiveness also provides insights into engagement levels. Regularly reviewing these metrics helps identify areas for improvement and ensures a positive work environment.

Employee satisfaction. Unhappy workforce leads to unhappy customers. Sometimes little extras make huge difference in employee perception about the company and satisfaction in spending 8h a day dedicated to supporting its goals.

Employee engagement - internal customers are most important for feedback . Innovation and honest feedback run through in the organization they know the best your organization , all factors of manage Ent, weakness n strength of products. Real scope to improve the characteristics of products etc

Employees have become more discerning and know what they want. At a principle level, employers need to have leaders with high emotional intelligence to lead and direct their operations, engage the employees and to demonstrate authentic leadership. Employees will give off their best if they are valued, their views considered and given a chance to learn and develop their careers. In my view, it goes beyond regular salary increases and bonuses. It's giving employees purpose and the flexibility for them to execute their work

I’ve seen how tracking key indicators like cycle time, throughput, and defect rates can reveal bottlenecks and opportunities for growth. But the magic happens when data turns into action: streamlined workflows, reduced waste, and a sharper focus on customer satisfaction. In my view, operational efficiency is not just about improving processes but about creating a culture that values continuous improvement and adaptability.

This is very industry specific, but generally: 1. % utilisation of assets 2. Cost of service to customers 3. Reliability as measured in the industry 4. How long it takes to service orders

Employee retention: fast turnover is a reflection of poor leadership, pay, growth opportunities, etc. At the same time, incumbency becomes an institutional cancer in terms of growth due to the lack of initiative and a hardening of mindsets/attitudes.

I work in the nuclear industry…operational performance is paramount to safe operations. Operational performance is thee metric that declares our personnel are adhering to procedure and quality based requirements. This resultantly satisfies our customer, in this case the DOE.

All organizations have to find the best measurements that drive quality, delivery and cost. Nevertheless, these are lagging indicators that are the outcome of how effective you measure, problem solve and improve foundational activities like: Safety, 5S, Machine Reliability, Cross Training, Daily Communication and Employee Engagement. If these foundational activities are not tight and streamlined, an organization will constantly struggle with QDC KPIs. Therefore first focus on the foundational - leading indicators and Quality, Delivery and Cost will improve.

Strategic alignment, where organizational objectives align with actions, significantly impacts company performance. Tools like the Balanced Scorecard assess alignment across four perspectives: financial, customer, internal processes, and learning/growth. KPIs track the specific metrics tied to strategic goals, ensuring alignment. Strategy mapping visually represents how various components of an organization link to strategic objectives. Additionally, regular communication, performance reviews, and employee surveys gauge alignment effectiveness. Ensuring that all aspects of a company work cohesively towards common goals enhances agility, competitiveness, and overall performance, ultimately driving success in a dynamic business environment.

Although a company is built from the bottom-up, strategic alignment is a top-down phenomenon. As such, strategies that come from the company's leadership need to be based on data and analysis from frameworks which are inherent to the company. Company goals can align with research and strategies from outside the organization, but they must be grounded in the data that is relevant to the company. Too often, administrators/bosses/etc. will bring goals to the institutional leadership that are from the outside, which kills employee buy-in.

In my experience Here are some common metrics that are often used to assess overall company performance: 1. Financial Metrics (Revenue, Profit Margins, Cash Flow) 2. Customer Metrics (Customer Satisfaction (CSAT),Net Promoter Score (NPS),Customer Retention Rate) 3. Operational Efficiency Metrics (Cost of Goods Sold (COGS),Inventory Turnover,Operational Expenses) 4. Employee Performance Metrics (Employee Satisfaction,Employee Turnover Rate,Productivity Metrics) 5. Market Metrics (Market Share,Competitive Analysis) 6. Innovation Metrics (Research and Development (R&D) Spending,Number of New Products/Services). 7. Social and Environmental Metrics 8. Risk Metrics 9. Strategic Metrics 10. Technology Metrics

All these categories are relevant KPI measures for business performance (Revenue, Profit, Cashflow, Cust Satisfaction, Employee Engagement, Operational Efficiency, Strategic alignment). However, one also needs to look at things from a "cause-and-effect" perspective. For example, most financial results are "outcomes" of various value-creating activities that employees engage in to deliver to customers. So if KPIs are used to measure business health at operational, customer, and employee processes, most of the financial outcomes will naturally result from that as long as there is strategic alignment in various value-creating activities. Lastly, ongoing organizational development, in skills, technology, and innovation is critical as well.

All listed KPI are good but they don't list how well a company is performing against: 1. It's own vision and ambitions 2. A sustainable and net zero carbon future 3. Diversity, Equality and Inclusion

What else - suggestion , feedback, creativity, innovation whether come from employee, families, customers, vendors , competitors.. it should be welcomed for change not to be defensive about things but to be open to learn n adapt the change for growth n survive as fittest

My colleagues' answers are all relevant and accurate. My corrollary is, it depends. Yes, all of these categories of metrics will be relevant for businesses of all sizes, but the selection of the metric(s) - even the business's ability to measure it - will differ based on the maturity of the business (having worked with startups and Fortune 500 companies). The biggest thing influencing what you select as a metric(s) is the company's chief objective/outcome(s). What are we attempting to achieve, and by when? In reality, businesses are operated by humans and a selective focus (7 +/- 2) will return the best results. So, which 5 - 9 things will you measure such that achieving them will attain your objectives?