Performance gaps often start not from a lack of effort, but from a lack of clarity. When teams don’t know what to aim for or how success is measured, resources are wasted, and strategic goals drift out of reach. One way to bridge the gap between strategy and execution could be to use key performance indicators (KPIs) that help translate abstract goals into measurable actions.

However, according to The KPI Institute’s State of Strategy Management Practice – 2023 Global Report, many organizations still face foundational challenges with KPIs: 25% struggle to align KPIs and targets across departments, while 24% find it difficult to select the right KPIs—an issue that has grown by 4% over the past year. Despite these hurdles, KPI usage remains strong across both people and business performance. In fact, the same report reveals that organizations primarily use KPIs in two key areas: employee performance evaluations and corporate performance monitoring, with 60% of respondents emphasizing both. 

With KPIs influencing both day-to-day decisions and long-term priorities, their impact is far-reaching. However, when not aligned with strategic goals, they can create a gap between what the organization aims to achieve and what it delivers. That is why it is critical that they reflect strategic priorities, not just routine activities.  

To put this all into practice, we’re highlighting two KPIs in Q1 2025 that directly link operational efficiency with broader strategic goals: 

KPI of February: % Return on assets (ROA) – This metric evaluates a company’s ability to generate profit from its total assets, shown as a percentage of net income to assets. It aims to analyze how well a business utilizes its assets to drive profitability.  Aligning asset utilization with strategic growth goals helps companies achieve greater financial efficiency and improve competitive positioning in their industry.

When evaluating % ROA, it’s important for companies to benchmark against peers in the same industry, as asset structures vary. For instance, manufacturing firms tend to be asset-intensive and rely heavily on physical resources to drive income. Unlike businesses in the technology or service sectors, these companies typically depend on intangible assets like software, data, or expertise.

To learn more about how to utilize this metric, get a free copy of the poster from TKI Marketplace.

KPI of March: % Production schedule attainment – This indicator measures how much of the actual production output was completed as scheduled within the reporting timeframe. This metric helps verify whether the production process stays on track with the planned schedule.

Organizations can improve their % Production schedule attainment by adopting scheduling techniques that align with their business model and operational requirements. When production is on schedule, organizations can reduce costs, improve resource utilization, and enhance customer satisfaction, all of which directly contribute to long-term competitiveness and profitability. To explore how various scheduling methods impact this KPI and gain deeper insights into the indicator, download a free copy of the poster from the TKI Marketplace.

These digital posters are part of the KPI of the Month series by The KPI Institute. It is a free infographic series designed to provide practical insights into the application of key performance indicators. Each edition focuses on one specific KPI, offering clear explanations of terminology, addressing common challenges in its use, and outlining essential details such as its definition, calculation, Balanced Scorecard relevance, data profile, typical targets, and actionable recommendations.

Benchmarking is a powerful management tool used by businesses to track progress and assess their goals. It involves measuring the company’s operational performance compared against internal and external standards. 

Benchmarking is also about researching best practices in the industry to help a company reach a high-ranking performance level. It allows organizations to build a solid starting point.

Andrea Minelli, a management consultant at The KPI Institute, wrote an article on Performance Magazine about why companies must invest in benchmarking. He stressed that benchmarking has the potential to be a “powerful tool to promote continuous improvement in performance.”

Andrea explained that benchmarking allows businesses to concentrate on their advantages and disadvantages. It also enables them to increase their market position.

In another article on Performance Magazine, benchmarking enables businesses to compare performance data collected by analyzing identical processes or activities carried out by other businesses. The process of benchmarking lets organizations discover, adapt, and replicate the strategies that created the greatest outcomes for their best competitors.

According to the author, Andrada Ghețe, benchmarking supports the idea “that performance numbers can mean less when analyzed without having a point of reference (a benchmark) as a comparison starting point.”

“For example, in the airline industry, an airline company has a turnaround time of 55 minutes. Is it good, or bad? It is hard to find the answer, unless you compare this 55 minutes turnaround time to an objective standard, such as the industry average turnaround time for other airline companies,” Ghete wrote.

According to Business News Daily, the three most common types of benchmarking are Internal, Competitive, and Strategic.

Internal benchmarking refers to conducting comparisons within an organization. It can help a company save time and money by identifying and eliminating waste. Employee performance and effectiveness, as well as how employees use the resources supplied by the company, are examples of internal benchmarks that firms should consider. яндекс

Competitive benchmarking allows businesses to compare their company’s performance, product, and services against their competitors in the same market. Competitive benchmarks let companies catch up with the trends and adjust their marketing strategies to have a competitive advantage.

Strategic benchmarking refers to taking “a long-term view of company direction relative to the future strategies of competing companies.”

If you would like to know more about how your organization can benefit from benchmarking, join The KPI Institute’s Certified Benchmarking Professional Live Online on 18-22 April 2022.

Understand the importance of knowing the strengths and weaknesses of your best competitor. Learn how to constantly improve the performance of your organization. Know the difference benchmarking can make in your business  and register here.

The KPI Institute’s participation at the PMA 2014 Conference, held in Aarhus, Denmark had as a main outcome the achievement of a full and comprehensive conference cover. PERFORMANCE Magazine, The KPI Institute’s magazine dedicated to performance and strategy, provides an extensive database that comprises 11 interviews with professionals, as well as coverage from roughly over 80 presentations delivered by speakers all throughout the 3 days of conference.

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