Why it is High Time to Implement Recession KPIs
No company should forego the implementation of recession KPIs. There is much need to do so now, to deal with the effects of recession for the survival of the enterprise.
With the ongoing economic downturn and things going haywire for virtually all sorts of companies and industries in the corporate world, any sane and logical person would definitely say that recession has definitely hit the primetime spot everywhere. The effects of recession are certainly felt at a global scale today and it is high time that you take a good, close look at your company to see how this economic downturn is affecting your enterprise. You need to evaluate performance as objectively as possible. Check if your company is having problems meeting set forecasts regarding research and development, production, the whole nine yards. Check your status on your short-term debts as well. Are there problems when it comes to settling them? Do you find these short-term debts significantly increasing? Check your people as well. Do you see them exhibiting low morale? Do you see this in your customers as well? If your company is having all of these problems, then it is high time for you not just to consider implementing recession KPIs, but to go ahead and implement them already.
A lot of people might say that the implementation of such KPIs or key performance indicators is yet another investment and would yet be costly on the corporate budget. Still, this is a worth investment to make because these KPIs will help you a lot, especially in dealing with the sad turn of events brought about by this recession.
How should you start then? The first step is to have a fresh perspective on all causes possible behind your enterprise’s internal and external problems. Take note that ALL causes should be determined here so you have to look for both qualitative and quantitative signs.
Quantitative signs can include declining market margins, declining sales, and increasing short-term debts. How you company is unable to meet set forecasts can also be used as a quantitative sign here. With qualitative signs, you can begin with high employment turnover, high management turnover, and degradation in terms of the market value of the company. This last sign can be either real or perceived and should be regarded as important because it has much impact on the psyche of the employees themselves – even if this is perceived.
The next step is to check your IT systems. Make sure they are still producing information that is relevant and supportive towards effective decision-making. For this, you can actually use business intelligence software. Just make sure to include only a few KPIs that are relevant to your purpose. Having too many KPIs would just cloud your judgment. Check for KPIs that need to be modified. Just because you have been using a certain group of KPIs for a while now does not mean these would still be as effective.
Both short-term and long-term actions should then be devised and implemented to deal with changes being made. Re-forecasting should also be done because the set forecasts would no longer be effective because recession has certainly blown all of these away. The entire process of developing and implementing recession KPIs will very well take a lot of time but this would really help any company weather the effects of this economic downturn.
