Key performance indicators, or KPIs, as organized in the balanced scorecard, bring a company's mission statement to life. In this video tutorial, accounting professor Kay Stice explain how KPIs play into a mission statement through the example of an optometrist's office that is facing a lot of competition.
- [Voiceover] In this module, we'll discuss…the connection between mission statements…and key performance indicators.…In brief, the key performance indicators or KPI's…as organized in the balanced scorecard…are what bring the mission statement to life.…To aid in this discussion we will use…a hypothetical example of an optometrist office.…Now for those of you with perfect eyes,…an optometrist is a person who diagnoses, prescribes,…sells and fits eyeglasses and contact lenses.…So imagine that you are an optometrist…with your own practice.…
For the past 20 years you've focused almost exclusively…on profitability of your practice…as your sole performance measure.…In fact, you've been quite profitable.…However during the past two years…a number of new low cost commercial optometrist offices…including outlets based in supermarkets…have opened in your practice area.…In addition some of your customers have discovered,…as has my son, that the absolute lowest cost way…to buy eye glasses and contact lenses is online.…As a result your profitability has decreased…
In this course, accounting professors Jim and Kay Stice explain what KPIs your business should consider in a balanced scorecard, from financial goals to employee and customer satisfaction. They describe how to craft a clear mission statement that complements your KPIs, and how to tie performance to incentives. Plus, get a look at KPIs in action, as Jim and Kay break down a case study examining a trucking company's balanced scorecard.
- The importance of KPIs and measuring performance
- Financial goals and measure
- Customer needs and satisfaction
- Employee growth
- Creating an effective mission statement
- Linking measurements and rewards
- Examining a KPI case study