Do KPIs have you confused? Here's why they're important and how to use them.
Personally, I like the idea of KPIs or Key Performance Indicators, but if you do a quick Google search using "KPIs" it's easy to become overwhelmed with the search results (last time I checked, I got almost 7 million!).
There's so much information about KPIs and it's easy to over complicate what you're measuring. No wonder it's estimated that 92% of companies do a bad job with KPIs.
I asked our team of KPI experts what they saw as the biggest issues with companies and their KPIs. This is what they shared:
- People want a KPI to measure anything and everything - just because you can, doesn't mean you should
- When creating KPIs, managers don't involve the people responsible for meeting the targets
- KPI thresholds are often set too high and sometimes too low
In a quest to demystify KPIs, I worked with the team to pull together a KPI infographic (see below). What may (or may not) surprise you is if KPIs are used correctly, they can improve both company performance and team motivation.
Key Performance Indicators, or KPIs, allow business owners to set quantifiable goals that can be evaluated and measured. They provide a standard for grading your business success to help you create realistic business strategies to improve work. Most importantly,KPIs take the mystery out of management and help you hone in on what’s most important.
The KPI sniff test:
KPIs are great for engagement, but it's easy to get a little carried away by wanting to measure way too much! So before setting your KPIs, ask yourself these 4 simple questions:
- Can you keep the KPIs up-to-date (and live)?
- Will the KPIs have a significant impact to you and your company?
- Are the KPIs relevant?
- Will your KPIs impact behaviors?
Your copy of the KPI info-graphic:
If you’re interested in learning more about Key Performance Indicators, check out our info-graphic (below) on creating KPIs for measuring business success and engaging your team. You’ll learn more about how you can introduce KPIs as a part of your business strategy.
Getting started with KPIs:
There are countless benefits to using KPIs the right way. So how do you get started? download our free KPI eBook for an in depth, but practical view into using KPIs the right way. You'll also receive additional resources on how to define and use KPIs in your organization.
Joseph Cole, @joefcole