How to establish enterprise KPI management system

The first step is to determine the strategy.

It can be said that it is impossible to formulate a performance appraisal system without combing a company's strategy. The main tasks of defining strategy are to confirm strategic issues, define corporate vision and strategic target system, analyze external environment and industry, analyze internal resource capacity, establish overall strategy and business strategy, analyze core competitiveness or key success factors, and design functional strategy and strategic implementation plan. After the first step, we have a full grasp of the strategic system of enterprises, and performance management is a powerful starting point for enterprises to achieve strategic goals.

The second step is to break down the key tasks.

The balanced scorecard is used to decompose key tasks from four dimensions: finance, customers, internal operations, learning and growth. The four dimensions of the balanced scorecard have their inherent logical relations. Unless an enterprise organization is engaged in public welfare undertakings and pursues the greatest financial benefits, who will create the financial benefits? That is to say, customers, how to win customers must rely on good internal operations, and continuous self-learning and growth of enterprises is the means to improve internal operational capabilities.

The third step is to decompose the key factors.

The key factors are decomposed by organizational function decomposition method (fast method). Enterprise value chain usually includes six main value chains, such as R&D, procurement, production, marketing, sales and service. In addition to the main value chain, there are auxiliary links such as human resources, information technology services and administrative support. We only decompose the key factors supporting the realization of the company's strategic objectives along the main chain and auxiliary links of the enterprise value chain.

The fourth step is to draw a strategic map.

The idea of strategic map drawing is to use the decomposition method of value tree to decompose the strategic objectives of enterprises layer by layer according to the logical relationship of top-down financial, customer, internal operation, learning and growth. The financial aspect mainly expounds the measurable economic achievements produced by the company's business behavior, which reflects the company's appreciation of shareholder value. At the customer level, the focus is on the customers and market segments that the company expects to acquire, and how the department can meet the needs of internal and external customers. The focus of internal operation is to attract and retain customers in the target market and meet shareholders' financial return expectations. What core business processes must the company be good at and conform to the company's values? The focus of learning and growth is the core knowledge and innovative spirit that organizations and employees need to have in order to win the competition.

The fifth step is to turn key factors into performance indicators.

For example, the key success factor of a company's financial level is to improve the return on equity, so the return on equity is its key performance indicator. When designing key performance indicators, enterprises must consider the measurability and cost of this key performance indicator. When the management improvement effect brought by high cost is not obvious, then this performance indicator can be omitted.

The sixth step is to clarify the mission of the department.

In the process of decomposing assessment indicators into departments, a clear departmental mission is needed as a guide. When defining the mission of a department, we should pay attention to the following points: first, the mission is not a simple superposition of responsibilities; Secondly, the mission is the support point of each department for the company strategy; Finally, the emphasis is on describing the value, significance and function of this department. This process is a process of repeated consultation and discussion with the leaders of various departments. The mission of each department must convince the person in charge of each department to lay a good foundation for the seventh step to implement the indicators of the company and each department.

The seventh step is to implement the indicators of the company and various departments.

The department is the undertaker to realize the company strategy. When designing departmental indicators, we should pay equal attention to the results and process of enterprise strategy realization according to the balanced scorecard, and make comprehensive design with annual indicators and monthly indicators.

The eighth step is the design of exponential elements.

Every post in the department is a cell unit in the organic whole of the company. Whether the company is dynamic, enduring and prosperous, and whether the business is thriving, the key lies in whether the employees in each cell unit have enthusiasm and initiative. Therefore, it is the most important to design the index elements of each position, which must be fully integrated with the job responsibilities and business processes, and at the same time ensure that the assessment indicators can be realized and improved by the job subject through efforts.