How to measure business performance

An essential checklist for effective business planning.

An essential checklist for effective business planning.

For organisations to take a strategic view of their business, it is often a matter of having clearly articulated business objectives; a business plan that addresses how the objectives will be achieved; appropriate measures and targets that will track progress; and an effective means of reporting the results being achieved against the measures.

For a business to effectively evaluate its performance, the following questions might be considered:


* Do we have a clear vision for the business?

* What are our key objectives and targets?

* How will we effectively monitor business performance?

* Do we understand the legal and regulatory requirements for our business?

Business Planning

* Do we have a robust business plan that we use to manage the business?

* Are there documented actions/plans that we will use to meet our objectives?

* Do we have specific measures and targets for the objectives and actions?

* Do our staff understand the plan, its intent and importance?

Customer Focus

* Do we know who our customers are?

* Do we know why they use us/our products/our services?

* Do we understand our customers’ needs and what their most important needs are?

* How will we determine if we are meeting their needs?

Business Information

* What information do we need to manage the business?

* How will we collect, consolidate and analyse this information?

* What technologies/computer support do we need?

* How will we ensure the safety and reliability of our business information?

Workforce Focus

* Do we have the right people with the right competencies working for us?

* How do we encourage customer focus?

* How do we address training and

* How do we address health and safety and business continuity planning?

Process Management

* Are the key processes for delivering products and/or services to our customers understood by our staff and are they documented?

* Are the relationships with our partners and/or suppliers managed effectively?

* How do we know/measure whether our processes for producing products and/or services are effective?

* How do we encourage innovation and undertake improvements to the business?


Do we monitor our business results effectively, including:
* Financial success, e.g. cashflow, profit & loss, debtors etc?

* Customer satisfaction, growth and retention?

* Staff satisfaction, absenteeism, sick leave etc?

* Process performance, e.g. production and delivery times, returns and rework etc?

Mike Watson is CEO of the New Zealand Business Excellence Foundation. This article originally appeared in Engage magazine for AUT Business School

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