5 key business performance objectives for any organization include quality, speed, dependability, flexibility, and cost.

What Are the Five Business Performance Objectives?

The key performance objectives of any business are effectiveness and productivity. However, to achieve overall success, quality, speed, dependability, flexibility and cost are key.

When it comes to business, you likely know that efficiency and productivity are crucial. However, the key to being a successful organization is having good all-round performance, and there are five objectives to achieving this.

five key performance objectives

1. Quality

Quality is an important performance objective to meet because it is the visual sign of what an operation does. It acts as a consistent indicator which customers and staff base their expectations around.

Does the product work as it should? Has it been made with low-value parts that undermine its integrity? Quality is a fundamental aspect of performance and, because of this, has a huge influence on whether a customer is satisfied or not.

For example, giving each individual warehouse packer the responsibility to pack their own boxes improves quality as mis-packs are made less likely to occur.

In terms of the operation principles, quality can create the potential for better services and products which reduce costs in the long run thanks to having more satisfied customers.

2. Speed

Speed relates to the turnaround between customers ordering a product or service and the point at which they receive it. The more likely an organization can deliver the goods on time, the more likely a customer is to be satisfied with their experience.

As an organization, if you can provide a service or product faster than other companies then you are already off to a winning start.

In terms of operation principles, high speed can allow for faster delivery of services, therefore saving costs.

3. Dependability

Dependability means that customers can rely on your organization to receive their goods and/or services as and when promised. While this may not affect the chances of a customer selecting the service - as they have already 'consumed' the product - it may have an influence on whether the customer returns to make a future purchase or recommends your business to another.

For example, no matter how cheap or fast a pizza is made by a takeaway company, if the customer can't depend on it to be delivered on time or to the correct address, then they will go elsewhere.

In terms of operation principles, dependability is important in providing the reliable delivery of service and products.

4. Flexibility

Flexibility is the means of changing an operation to match a customer's requirements. This may involve changing what the operation does or how it works so that the service is bespoke.

Customers are likely to require change for four reasons:

  • Product/service flexibility occurs in order to introduce a new or modified product.
  • Mix flexibility is the ability to have the variation of products available grow.
  • Volume flexibility involves the output of a process and being able to produce different quantities/volumes
  • Delivery flexibility is being able to change the timings of delivery in a product/service.

In terms of the operation principles, being flexible gives the potential for a business to hold a competitive edge due to their wider variety, different volumes and varying delivery dates.

5. Cost

Cost is an important factor for companies which compete directly on rates. The lower a company can keep its production costs, the lower they can have their customer-facing prices. Even companies who do not compete on price want to keep their costs as low as possible while still maintaining the levels of quality, speed, dependability and flexibility that their customers demand.

In terms of the operation principles, the minimalization of costs is as important so that resources can be spared to grow other areas of the business.

These performance metrics are relatively straightforward and should be applied to all aspects of your business' operation. By achieving each of these performance objectives you can satisfy customers and improve your profit.

Joseph Garvey

Joseph Garvey

Content Team

3 minute readPublished on September 19, 2019

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