5 must have KPIs in 2021 balanced scorecards
Finally, COVID vaccine is out and business leaders are more hopeful to get back to what they had in 2019. It's the beginning of the year and most probably strategy formulation of companies has already happened. Hope you agree that strategy formulation is not a general prescription and it differs from business to business. Therefore, no one can come up with specified solutions unless she or he knows the nature of your business and the details around it very well.
What we can generalize is some measurements reflecting the situation as whistles to make us aware of changes. Basically, some KPIs supporting our strategic planning to create proactive scorecards. The ones that help decision makers to see problems before they happen.
To create the mentioned measurements or KPIs we should be aware of trends in 2021, that is why I shape up the solution in a way that first you find the KPIs and then you see the trends as the reason for considering the KPI.
1. KPI: Market share
2021 Trend: Companies that survived after 2020 will be more innovative. They learned how to be more sustained and truly due to necessities they learned to be creative. Also, due to positive overview of the year newly established companies may enter the game too. If your products are traditionally being produced in the market with no disruption then you should be very sensitive about your market share. Surely, more than any other time! Market Share is a great sensor to show the competitiveness of your service or product. It shows where your company stands among others and how customers see the importance of what you offer.
* Regarding the number of new businesses, we should pay attention to different regions due to different behavior of governments and people. For example, based on The Economics, the number of new businesses in the US until October 2020 were booming. Obviously, because the US government decided to pay cash to unemployed people but the European states in the EU decided to help companies (not directly people) to save jobs and positions. This cannot be the only item to consider but one of the biggest differences in governments behaviors.
2. KPI(s): Productivity as a group of KPIs addressing financial KPIs and operational KPIs
2021 Trend: The 2020 pandemic made companies to redefine their operations and it created an opportunity for them to innovatively transform them. Surely, you have done the same but as you know, it is never enough! Others just learned how to do it or to make it more clear, the party just started. If you wish not to stay behind then focus on your productivity as a necessary factor to compete.
3. KPI: Supply chain
2021 Trend: In the beginning of the pandemic when China started the lockdown multinational companies such as Apple realized that production lines and more important, raw materials should not be gathered in one country or source. Reuters was one of the first news agencies to address this problem as a warning to others. Click here to be reminded.
The above issue was a new trend but only for the beginning. Later the story got more complicated by entering into a global luckdown and restrictions. Then it was not only about supply and production but also about demand satisfaction. As a reaction, online shopping became a necessity and Amazon focused on the opportunity as written in one of my articles.
Our consumer behavior changed and many of us got more comfortable with online shopping. Apparently, COVID had a higher impact on digital transformation than our CEOs! ;-)
4. KPI: Retention rate
2021 Trend: COVID made us work from home. In the beginning, I didn't like it because I didn't know how to do it! But now, I love it. Missing colleagues and the human touch is a problem that we can solve by company gatherings and creating co-working areas in companies to provide an atmosphere for face to face problem-solving meetings after the pandemic. But in general people may not like to come back to offices 5 days a week. Smart business leaders knew this and they started planning for it for the time after the pandemic. Others are still confused! But surely, we should provide acceptable choices for our talents or they leave us with no hesitation. retention rate shows us how comfortable our talents are. Google sent many of its employees home forever but also more traditional businesses planned to do so. Click here to read about group PSA's (PSA: Peugeot, Citroën, DS, Opel and Vauxhall ) and many more companies.
5. KPI(s): Sustainability as a group of KPIS addressing carbon footprint, energy consumption, recycling rate and etc.
2021 Trend: This time the recovery plan directed by governments has a different direction in investments and subsidies.
The EU dedicates around 30 percent of its $880 billion plan for COVID-19-crisis plan to climate-change-related measures, including the issuance of at least $240 billion in "green bonds."
The new US President, Joe Biden promised to invest $2 trillion in clean energy, South Korea as a part of its economic-recovery plan, invests in greener infrastructure and technology, with the stated goal of net-zero emissions by 2050. Similar plans are happening with Japan, South American countries and also Africa and the Middle East. I don't dare to call it "new trend" as it is not really new but I would call it the "serious trend".
If your business is not sustainable then start measuring it to know where you are and how you can improve it.
These are general trends for 2021. If we go deeper in each field, certainly we can find more. Write to me about your business to speak about your 2021 trends in detail.