Have you ever been part of a strategy session to effectively create a KPI that helps us generate better business results?

By having your KPIs well defined, you will have a better idea of ​​how to achieve your objectives and your team will have a clear idea of ​​how to measure progress.

However, when the time comes to implement a strategy to measure your performance, the reality is often very different from the objectives set and the KPIs fail.

How to create a KPI correctly?

Definition of KPI

What is a KPI? It is the indicator that allows companies to evaluate their performance.

KPIs are linked to an objective, so decision makers use them to ensure that strategic and operational objectives are met.

5 ways to create a KPI that leads to success

How to choose key KPIs for the operation of your company? These are the steps you must follow:

  1. Correctly define your KPIs
  2. Take responsibility for them
  3. Create KPIs that are achievable
  4. Make sure they are specific
  5. Check that they are easy to measure

1. Poorly defined KPIs are doomed to failure

A well-defined KPI is one that stands the test of time. To make a KPI that works it must be well defined, structured and must incorporate feedback from multiple areas of your business.

A KPI should address the unique challenges and opportunities of your business. The indicators you choose should be a window into your current performance against your goals.

Do you want to double the size of your business this year? Then create aligned KPIs around this goal.

KPIs often fail when they are poorly defined. The most common mistake when creating a KPI for your organization is not having external feedback. 

A KPI must be recognizable and communicated correctly outside your business unit or department. And, of course, achieving your KPI objectives should have a clear and measurable impact on your business.

2. Take responsibility for your KPis

If you want to create a KPI that is excellent, you must also ask yourself, who will be responsible for that KPI?

Each KPI you define should have an owner, someone who is responsible for monitoring and achieving the goal associated with that KPI. It may sound strange, but KPIs need care. An isolated KPI will wither and die without bearing fruit.

When defining KPIs, be sure to determine who will be in charge. If that person’s job performance is linked to the KPI, even better. Encouraging the achievement of KPIs is a recipe for success.

3. Create KPIs that are achievable

Do you want to increase your company’s income? Sounds great.

A good way to create a KPI is for it to have a deadline, which is, for example, associated with monthly and annual objectives. This will allow progress to be continually monitored and corrective action continually taken.

However, the true value of this is giving your team and company an achievable short-term goal, one that contributes to the achievement of an annual goal.

4. KPIs without specific objectives fail

It will be much easier to achieve your business objectives if you set specific goals.

How do KPIs help build a better work team ? Set a specific goal so you know when you can stop pushing one goal and start working on the next.

5. Create a KPI that is measurable

The most common reason KPIs fail is because they can be difficult to measure. KPIs combine data, business and departmental objectives to act as guides to success. Without that first piece, the data, your KPIs are abstract and conceptual.

Data informs your KPIs, so make sure you can actually measure and monitor your KPIs over time. 

When creating a KPI, think about making them simple and highly measurable, not so much that they are aspirational and cannot be measured.

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