KPIs are a foundation of strategy. At their best, they provide targets for teams to aim for, milestones to gauge progress, and insights that help inform better decisions across an organization.
However, KPIs don’t always deliver the planned results. Poor results typically stem from a number of common underlying problems with KPIs: the KPIs tracked aren’t relevant to the business, the data they provide isn’t accessible, or they aren’t being usefully applied. Know when it’s time to reevaluate the KPIs you’re using, and how to use those KPIs to make smarter, data-driven decisions that move your business forward.
Step 1: Set Tangible, Applicable KPIs
An extensive list of KPIs may appear impressive, but simply having a wide array of metrics can stagnate progress instead of generating success. For example, if you’re determining sales KPIs, there are dozens of metrics for lead generation alone you could track. But overloading a dashboard with metrics diminishes productivity and clarity. Limit your KPIs to only the ones with strong tie-ins to overarching business objectives.
“Teams tend to track too many KPIs,” says Heather Zorge, Chief Financial Officer at Hippo Veterinary Group. “I think where people struggle is in the belief that all data needs to be on a KPI board to be tracked. Just because it’s not on your KPI board doesn’t mean you don’t track it. Monthly revenue, for example, doesn’t need to belong on a KPI board, as it is part of a standard financial review process. Instead, choose the 5 leading indicators that align with goals you’re currently trying to accomplish this year as your KPIs. Always track them against a goal, whether it be your budget, your improvement, or an industry standard,” she recommends.
Additionally, ensure you have a good mix of KPIs. Strike a balance between lagging and <...