Achieve 200% Return on Investments with KPIs

From task to process

Let’s take a look at a case study: a large housing corporation has a reputation for being an innovative, ambitious real estate agency. They operate in a dynamic market, which is one of the reasons they started the transition from being a task-oriented to a more completely process-oriented organization.

Drive critical factors

The (SMART) goals in this transition are organizing smarter, making processes lean, and driving the most critical success factors. The company is getting ahead of the measures that are expected to come from local and European governments in the coming years. Those measures will have financial consequences.

Corporations are facing great challenges

New taxes and charges necessitate a change in direction. They have to drive genuine KPIs. Management and team leaders are facing a big challenge, because the indicators used up to that point weren’t current, precise, and reliable enough.

Greater need for better information

But that wasn’t the only challenge. The indicators didn’t have underlying cohesion, and there were no singular definitions. The information also wasn’t clearly linked to the company strategy. Small wonder, then, that the management information was of little value. Employees couldn’t drive the critical factors. “There’s a great need for better information and management. Staff experiences this on a daily basis,” according to the director at the time, Fons Catau.

Enlightened by KPI workshops

In various KPI workshops, the processes and key success factors of the new policy were covered. Based on that experience, the housing corporation defined several key performance indicators (KPIs). The most important KPI for the corporation proved to be, of course, the vacancy rate. How many houses were vacant compared to the total supply, and how long were they vacant? This data proved to be crucial for new insights. Lowering the vacancy rate directly affects profitability, and improves customer and employee satisfaction.

Embed KPIs in the planning and control cycle

Based on this single KPI, the housing corporation isn’t just making decisions based on the renting process anymore, but also the real estate development process. ‘No more building for vacancy’ is the new motto. By embedding this KPI in the planning and control cycle, they managed to reduce vacancy rates by half. They went from 5% vacancy to just over 2%. This improved the profitability of the renting process by 200%. They didn’t only generate more revenue through rent payments, the costs associated with vacancy were also drastically reduced. The KPI knife cuts on both ends!

Do you want to increase your returns on KPIs? Order the SMART KPI Toolbox, the essential handbook for performance-driven managers and employees, or contact us for more information and advice.