Among the hundreds of professional services companies we count as clients, we have figured out one thing that rings true across all of them: there is no set formula for establishing and monitoring KPIs. Even within specific sectors, such as architectural firms or law practices, we have seen client after client tweak the fundamental data behind a KPI to fit their specific needs. However, if you are looking for a blueprint for establishing KPIs for your professional services company, you have still come to the right place. Because even though the formula isn’t quite as exacting as we would like, there is still an art and science of establishing KPIs that you can follow to get your business on track.
Whether you are looking to develop your first “scorecard” (the 5, 10 or 15 major numbers that immediately indicate the health of your business to you) or you are trying to analyze your current KPIs for fit and relevance, there are steps you can take to get your answer. While a simply Google search for “KPIs for professional services companies” would reveal a countless number of approaches to this, our general blueprint for establishing KPIs is the following.
- Make a list of the specific factors that you take under consideration now (formally and informally)
- Confer with Department heads or key personnel to discuss any major figures or metrics currently in use
- Review current report packages
- Are they accurate?
- Do they have the right figures to support your KPIs?
- What is missing?
- Identify the top 5, 10, 20 KPIs from the metrics gathered to create the list of KPIs your company will track
- Align financial report data and key figures that will be required for each KPI and inform those responsible for factoring KPIs
- Set up a process for regular, timely KPI reporting, review and analysis
On September 9, 2016, Dennis Najjar will presently formally on how one architectural firm setup their KPIs and what other professional services can glean from their approach. Join us in our Fridays with Vistage webinar on establishing KPIs by registering here. An archived version will be available at a later date (and updated here!)