Let’s talk KPIs. KPIs (just for the sake of repeating) are key performance indicators businesses use to measure specific performance metric over a specific period of time. As useful as measuring KPIs can be, many businesses do not approach the process in the way they should. For businesses that limit their use of KPIs to only assess past performance, measuring KPIs has just become a part of the business protocol that they thoughtlessly follow. It is nothing more than busywork.
A recent article in the Harvard Business Review discusses how reframing the concept of measuring and using KPIs can help businesses understand and realize their full potential. KPIs aren’t just measured to assess past performance but they can be an important predictor of future success. KPIs can also help you identify patterns that affect your goals.
The secret to making the best use of KPIs lies in following the right process to identify, measure, and map them.
Identify Your Goals
First things first. You cannot go about identifying your important key performance indicators unless you have an end goal in mind. The number of calls that are converted into scheduled appointments means nothing if we don’t know what we want to achieve. However, if we know that the goal is to increase monthly revenue, one way of doing that is to secure new patients every month, and the more calls that are converted into appointments the more new clients come into the office. Thus, the monthly call conversion rate becomes a key performance indicator. Note, though, that the bigger and more general the end goal, the more contributing factors there will be, complicating the measurement.
If your overall goal is growth of your practice, your next task should be to identify all the “stakeholders.” When it comes to a dental practice, stakeholders can be the owner of the dental practice, dentists working as employees, other staff, patients, the insurance company that the practice might be associated with, the supplier of dental equipment, and any companies that you may have hired for outsourced services like marketing and dental staff training. The achievement of an end goal will depend on the quality of the relationships different stakeholders have with each other.
A motivated team will be more dedicated to providing good customer service, good customer service will lead to more patient satisfaction, better patient satisfaction will establish a sense of loyalty in the patients and also contribute towards a good reputation of the practice. A good reputation will bring in new patients thus increasing revenue, and increased revenue will put you in a better position to pay and train your staff.
There are many factors that may contribute towards a single end goal.
To bring more clarity to the process it is important to isolate the role that each stakeholder plays in the business. For example, if you are focusing on patients, make a list of what is needed on part of the patients to help the practice achieve its end goal and what the practice needs to do to ensure patients keep playing their part. This list will lead you to your key performance indicator(s) for each stakeholder. You need the patients to schedule an appointment when they call, the patients need to experience good customer service in order to feel comfortable enough to schedule an appointment; both customer service scoring and call conversion rate are examples of key performance indicators when it comes to tracking the relationship with the customers or patients.
Note that some KPIs lend themselves to an objective number better than others. It’s very easy to track new patient numbers, but more difficult to track patient satisfaction. Generally, to create a KPI from something that is naturally subjective requires a method of scoring – it can be as simple as a thumbs up or thumbs down. As your use of KPIs matures, so must your scoring methodology. Consider surveys and other patient engagement tools that can help you translate a feeling into a number.
Map the KPIs
Once you know your KPIs for each individual category (e.g. relationship with employees) the next step is to map them. Without this step, the KPIs are just a bunch of numbers that do not provide much understanding of how the different business processes affect one another and contribute to achieving a goal. As intimidating as it may sound, the process of mapping KPIs is a simple one. All you need is a sheet of paper and a pen.
Start by writing your goal on the right side of the paper and then start noting the KPIs that are components of the primary KPI. Once you have done that, Continue drilling down. In some cases, you will find a number of different KPIs affecting a single one in many different ways; use arrows to link the KPIs together until you have mapped all of them and there are no more links that can be established.
What you will get is a flowchart indicating how different factors in your business affect others. What can emerge is an awareness of which areas of your practice you can focus on that will help you reach your end goal – or reach it faster. If you want to set up a more ambitious end goal for the next year or month, you will know what areas need improvement.
Review and Set Measurement Intervals
An important thing to keep in mind when using KPIs to assess and predict performance is the time interval you have set for them. It’s very difficult to predict monthly performance based on annual data. For example, if you want to predict the patient conversion rate for the ongoing month you cannot do that based on a new patient numbers for the whole of last year. A good rule of thumb is to set the interval for measuring such KPIs at a month’s length and not longer than that.
Make a Prediction
As mentioned at the beginning of the article, the purpose of KPIs is not just limited to measuring past performance. They can also help you predict the future. If you are able to do the job of KPI mapping well, you will not be able to see what went wrong or what went well, but you will also be able to see what factors contributed to it. Using these insights you can set new target values for the KPIs and then work out a plan to reach them. In this way, you will not only be able to see where your business stands but you will also be equipped to make it grow.
Many practices don’t know where to go first or what problems are a priority. And they don’t
know what they don’t know.
KPI Coaching is like having x-rays of the practice. All-Star Mastery Coaches can help you with insight into what’s really going on. Instead of getting ballpark answers, a coach can measure actual challenges and successes, and give you feedback on where and how to address opportunities.
Because we know what healthy numbers should be for a practice we can compare your results to your goals instead of trying to compare to other practices – where the comparison may not even make sense.
Click here to learn more about All-Star Dental Academy’s Coaching Programs.