BUSINESS METRICS

HOW TO OPTIMISE A BUSINESS

Business metrics, also called Key Performance Indicators (KPI), are measures used to track business processes.

Metrics allow the quantification of the performance of your business processes and strategic decisions. It is this quantification that allows optimisation, i.e. adjusting processes or decisions with the goal to improve performance.

KPI are a difficult topic:

  1. Because “Garbage in, Garbage out”: if you measure the wrong things you’ll take wrong decisions.

  2. Evolving optimisation targets: a growing venture needs to evolve what actually is a “good business performance”. The useful optimisation targets depend on the maturity of the product and company.

  3. Measuring KPI is effort: if you’re not disciplined and keep the amount of measured KPI in a manageable range, you’ll burden the organisation with useless admin. There needs to be a balance, you need enough data, and not more.

  4. Because “Buzzword Bingo”: acronyms and terms circulate the ecosystem and often the’re interpreted differently, even wrongly. This handbook our take.

Note: We use the words “metrics” and “KPI” interchangeably.

This handbook is an introductory guide with the goal to get you jump started in this topic. The presented KPI in this handbook are commonly used and cover 90% of your needs until you hit growth stage. Our goal is to get you interested, with time you’ll come up with your own ideas of what you need to measure in your specific space.

Don’t hesitate to drop us a line with questions that you have in your specific case or let us know if what you read doesn’t make sense.

Enjoy the read and increase the peace!

Sections in this handbook:

  • What is business?

  • Definitions: which metric is which?

  • Evolving optimisation targets: What do you optimise for at what stage?