A Case Study for the Use of Inn Metrics

Metrics, in the business and management world, refer to particular measures used to monitor various aspects of organizational performance. Hence, we may speak of factory metrics, shop metrics, or even inn metrics. There are also various classifications of metrics, depending on their nature and purpose. They may be called key performance indicators or KPIs, overall equipment effectiveness indicators, or key risk indicators.

Key risk indicators are meant to indicate the possibility of future harmful impact. They act as signals that allow management to identify potential events that may cause adverse effects upon the continuity of a project or even the organization as a whole. For an inn, for instance, risk-related metrics might include a threshold number of visitors within a year, heavy structural damage to the building, or a threshold minimum in the bank account for maintenance and upkeep.

Key performance indicators, on the other hand, as the term itself implies, are metrics that serve to indicate how well an organization is performing at some particular aspect. Financial indicators are just one class of KPIs – recent thinking in strategic management has put non-financial indicators on the same level as financial ones. These key performance indicators differ from organization to organization, as they are aligned with the larger strategic objectives of each organization. To use the same example of a small inn, important performance indicators might be the number of clients over a time period, the rate of growth or the arrival of new clients from year to year, among others.

These various metrics are selected or formulated in many cases using a strategic framework. Managers first define a general vision for the organization, which consists of a description of what they want the organization to become or achieve. This vision is then combined with existing business processes through the formulation of smaller strategic objectives. These individual objectives would then generally be related to one or more metrics that can track the organization’s performance toward the achievement of these objectives.

Returning to the inn example, the inn owner might formulate the vision as a thriving inn with regular patronage throughout the holiday seasons. Strategic objectives might then be to put up a minimum number of rooms, to keep them clean and in working order, or to improve the quality of the food on offer. Related specific metrics or key performance indicators would then be the average ratio of occupied to unoccupied rooms, and customer satisfaction regarding cleanliness and the food, among the many others.

These examples have by no means exhausted the many possible inn metrics to be considered. Furthermore, this inn example is but one of the many possible applications of the metric or key performance indicator approach. The rise in popularity of KPI-based and measurement-based strategic management processes is due to their undeniable utility. Managers are able to focus on the organization’s objectives, and have some idea of whether the organization is actually improving upon its past performance toward these goals. The effective use of metrics can mean success for any organization.