In this video tutorial, accounting professor Kay Stice offers examples of key performance indicators for a business or company. Using the example of a past freight train company and storage space on an information disk, he explains the importance of key performance indicators and determining which ones are important.
- In the 1870s Albert Fink was an executive…for the Louisville and Nashville Railroad.…The financial panic of 1873 placed financial stress…on the railroad and caused Mister Fink to look closely…at railroad cost.…He focused on just a few key measures.…The most prominent being the cost per ton mile,…the cost of shipping one ton of freight one mile.…Mister Fink found that this cost varied dramatically,…from as low as 1/7 of a cent for high volume freight…carried against the normal flow of traffic…in cars that otherwise would be returning empty,…to 73 cents for freight carried in small quantities…in the busiest sections of the railroad.…
In other words it cost 500 times as much…to ship some freight,…500 times.…So Mister Fink focused on this one number,…this Key Performance Indicator, or KPI,…as he organized operations…in the Louisville and Nashville Railroad.…These days this relaxing notion…of running an organization by focusing on one single measure…has been overwhelmed by the quantity of data…that we have available.…
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