The company’s mission is the main reason for its establishment and existence. Namely, it provides answers to the questions of what exactly the company does, why it does it, what makes it different from the competition, etc. The success of a company’s business is directly related to the realization of the mission. It is clear that profitable company with a high level of income and low indebtedness knows exactly what it is doing and why it is doing it, but it does not know where to go next, like what are the next directions of growth and development. For this reason, it is necessary to define the Key Performance Indicators (KPIs) that will manage the business of the company in order to continue direction of achieving its mission. These criteria are used to assess the success of the business and the sustainability of the business strategy, and over 90% of the most successful companies in the world use KPI management to manage their business.
How is performance evaluation related to mission? Well, developed KPI management, where the goals that need to be achieved in the short and long term are clearly defined, directs the company towards achieving the mission. Of course, performance measures have to be changed and adapted both to competition and social circumstances. Thus, it is no longer enough to look at total income, profitability per employee, total costs per employee, but it is necessary to put these KPIs in the context of the environment. Also, in order to achieve the mission, it is not enough that only the owners and management of the company define KPIs at the company level as criteria for achieving the plan without considering the broader context of all employees and the whole company. Namely, in order to achieve the company’s mission, all employees should act in that direction.
In order to better understand the current social circumstances, it may be the best to recall the unofficial and unconfirmed story of how Steve Jobs, Apple’s CEO, managed at a time when the company was considered the world’s largest innovator (which is definitely its mission). During that period, in order Apple to launch the best and most innovative products, Steve Jobs exhausted pushed his employees to the extreme. Of course, this brought fantastic results, but it was possible only because in the same period, there was an unofficial agreement of the largest technology companies that there would be no mutual takeover of workers. For that reason, Apple was fulfilling its mission, and the employees who created these phenomenal products remained in the company. Today, this is certainly not possible because a good part of the best workers would leave that work environment very quickly.
Today’s social circumstances are such that no matter what the company does, its most important resources are its human resources. High quality employees enable both successful business and its further growth and development. No matter what the company does, KPI management must be focused on employees in order to achieve the company’s mission. This recognizes the complementarity of all these factors: employees, mission and KPI. Always, if there is a dilemma regarding our understanding of how to manage a company, it is necessary to observe the practice of the oldest and most successful companies in the world. Namely, in these companies, it is a well-established practice that all employees are rewarded with a Christmas bonus in the case of a “good business year”. This practice shows us that it is important that all employees know that it was a “good business year”, and only the interest of everyone in the company for the results affects their contribution to the business. This is perhaps the simplest example of the connection of employees with KPIs, all in order to achieve the company’s mission.
In this way, the management must also take into account the employees when managing KPI, because they are the most important resource. As we are talking about financial KPIs, it is necessary, apart for defining them, to relate them to the earnings of employees. Developed bonus schemes for employees based on the achieved results, which are defined and linked to the KPIs for the company, are modern tools for managing the company. This is inevitable in a social environment where employees can easily change their work environment.
After all that has been said, the importance of KPI is clear, but in order for the company’s mission to be realized, not only KPI management, but also motivated workers are important. The practice of IT start-up companies that give key employees shares in the company is getting closer to other industries. Of course, this may be impossible in all industries, but some variations of this principle, such as participation in the company’s profits may be a novelty that will ensure the realization of the company’s mission. This creates the preconditions for further growth and development, because if the key employees of a company are not focused on the realization of KPIs, they will not be realized in its near future. In this case, all the competitive advantages that this company had, will slowly be lost due to inflexibility in the new social environment.