KPI Considerations When Scaling

As a company that is looking to scale, there is a good chance that you have clearly identified your KPI’s. You know how your organization needs to function, and your company has operations figured out. Therefore, a legitimate question can be asked: if you have things humming like this, what is the point in talking about KPI’s with regards to scaling? 

The proper response to that question is for you to define the type of scaling that is about to take place. This is crucial, because there is a chance that your scaling will cause your KPI’s to adjust. Consider these scenarios:

M&A: Your business has managed to acquire a new business, either through a merger or an acquisition. The result is that your company has substantially increased resources, potentially even owning a previous supplier.

Technology: Through either a system upgrade or the addition of new technology, significant process or procedural improvements are on the table. From reductions in time spent to the possibility of handling tasks in new and different capacities, workflows could adjust substantially. To further complicate things, you might need to hire new staff to handle new technologies. 

Capital Investment:  Your company has purchased new equipment, expanded your facility, moved to a larger facility, or added a new facility to its operations. New staff will likely be a part of your company's needs as well.

In each scenario, it should be pretty clear that your KPI’s will need some type of adjustment. To figure out what those adjustments look like. Answer the following questions:

Who: Which workers in your workforce will be impacted?

What: Which procedures and processes will be impacted?

When: How much is the timetable impacted by these changes?

Where: What physical changes will occur in production/service offerings?

How: What does the plan for implementation look like specifically?

As soon as you have answered these questions, what should begin to emerge are the impacts on your KPIs. It is possible that the average production cost per product will drop, thereby giving you less overhead and more profit. It is possible you will be able to produce more with only a marginal increase in the cost.

In short, there will likely be quite a few adjustments (your analytics team will likely have their work cut out for them here, and it might take some time to get everything completely figured out, especially if you have seasonal considerations that might impact things.) Therefore, your top priority here is to figure out how your KPI’s are impacted as quickly as possible, then make sure that you adjust appropriately.

One other key thing to keep in mind: it is also possible that you will have new KPI’s created. If you have an M&A situation, you will at least have new KPI’s enter the equation, especially if you have a subsidiary that serves as a supplier. Be especially careful on this point, making sure that you can get all new to you KPI’s identified, as well as any other KPI’s that could emerge from your scaling process.

Time here is something that is very much a luxury. Since you are in a business that is in operation, the Ready, Fire, Aim approach should be adopted. You need to figure things out as soon as possible. There is no harm in getting things wrong here, since you can revisit it quickly and adjust accordingly.

In conclusion, KPI’s prior to scaling will likely be something that you can look at instantly and assess the health of your company. Upon scaling, the question is not if they change but how much. If you know how your scaling has occurred, along with how it impacts your business (using the the questions above), you will be able to very quickly figure out not only how your KPI’s will function moving forward, but also assess if you need to add new KPI’s to your monitoring list.