Achieve a 200% Return on Investments with KPIs

Author: Daan van Beek
Managing Director

Table of Contents

Featured image | Achieve a KPI return of 200% | Real estate

From task to process

A large real estate company is known for being innovative and having great ambitions. It operates in a dynamic market with many new building opportunities and, partly because of this, the transition from a more task-oriented to a fully process-oriented organization was initiated. The corporation set itself the goal of developing a simple system of key performance indicators (KPIs), key result indicators (KRIs), and performance indicators and then implementing this. Over time, they achieved a KPI return of 200%: the number of vacant homes halved.

Steer for what is really critical

The objectives are to have a smarter organization, lean processes and focus more on key success factors. In doing so, the company is anticipating measures that are expected to come from the national and European governments in the coming years. And these will have financial consequences.

The corporation is facing a major challenge

Among other things, the national levy from 2014, the levy of corporate tax, the income test, and an inflation-following rent policy make it necessary to change course. There needs to be much better steering on the real, genuine KPIs. Management and team leaders face a major challenge because the indicators used up to that point are not sufficiently current, sharp, and reliable.

Great need for better information

But that was not the only challenge. The indicators also lacked coherence and there were no unambiguous definitions. The information could also not be properly linked to the company’s strategy. Not surprisingly, the management information available at the time was of little value. Employees could not properly steer for that which was critical. “There is a great need for better information and steering. The staff experience this on a daily basis.” said the director at the time, Fons Catau.

KPI workshops were enlightening

In various KPI workshops, we went through their processes and critical success factors. Based on that exercise, the real estate company named a number of truly key performance indicators (KPIs). The most important KPI for the company, of course, turned out to be the vacancy rate. How many homes were vacant in relation to the total stock and especially how long were they vacant? This data proved crucial for new insights.

A reduction in vacancy rates has a direct impact on profitability because the loss of rent goes down. And in addition, customer and employee satisfaction goes up.

The SMART KPI Toolkit 2024

You can only achieve a high return on investments if you actually use the right KPIs. The SMART KPI Toolkit will help you define those few essential KPIs that matter most to your organization so that you can drive the factors that truly matter - the ones that affect profits, employee satisfaction, and customer satisfaction.SMART KPI Toolkit

Embed KPIs in the planning and control cycle

Based on this single KPI, the real estate company now not only manages its rental process but also its real estate development process. From now on, the motto is no longer to build for vacancy.

By embedding this KPI in the planning and control cycle, the corporation was able to reduce the vacancy rate by half. It went from 5% vacancy to just over 2%.

This improved the profitability of the rental process by no less than 200%. Not only did more rent payments come in, but the costs associated with vacancy also decreased dramatically. The KPI knife often cuts both ways.

Do you also want to have a higher return on your organization with the help of KPIs? Then order the SMART KPI Toolkit now: the indispensable “bible” for performance-oriented managers and employees, or feel free to contact us for information and advice.