What’s the key to any great story? The details. The world’s greatest storytellers, like Walt Disney and Adele, saw success because they created immersive experiences focused on the most minute details.
While you might not be creating children’s movies or accepting Grammy’s for your songs, your success still hinges on your organization’s ability to be focused and detailed during performance management.
Your Key Performance Indicators are the vehicle to tell the story of your organization’s strategic performance. While this idea isn’t a revelation in the strategic management process, you should take heed during your KPI development to ensure you can paint a clear picture as to what’s working and what’s not in your strategy.
Watch the video on KPIs here to supplement the information below:
So, let’s take a quick look at what a detailed, structured KPI is comprised of:
- Measure – Be as expressive as you can with your measures. For example, don’t just make the measure “number of new customers”. Add depth. A good example might be “new customers this year” or “new customers for XX service or product.”
- Target – Targets are the numeric value we’re aiming to achieve. Targets need to match both your goal dates and the measure. So, your targets might be something like “XX# of new customers within XX date range.”
- Data source – Be clear about what your data sources are. Almost all organizations have multiple data sources, so being clear up-front will clear up any confusion from the start.
- Frequency – State how often you’re reporting on this KPI. This could be different depending on your reporting systems and your performance management cadence, but a good rule of thumb to follow is to report on them at least monthly.
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With a quick refresher on what good, detailed KPIs include, we can move on to help you identify the different types of KPIs you can create as your put your plan together.
While good, detailed KPIs go a long way in making sure you can clearly communicate your strategic performance, it’s important to be aware of the three type of KPIs:
- Progress – These KPIs are good for measuring project-based KPIs or measuring KPIs that don’t always have a clear data source. These measures usually are “% complete.” They’re good for tracking performance of goals and the actions underneath them, but don’t always paint a clear picture.
- Broad Numbers – These are KPIs that simply count a number (example – # of new customers). These are good KPIs for measuring raw data, but can sometimes lack detail. To make these tell a better story, you might consider adding details with depth or context. An example might be changing a KPI from reading “# of new customers” to “Percent of new customer acquired compared to last year.” It gives you a much better idea of how you’re doing in the bigger picture.
- Change – These KPIs drive and track change within an organization. An example would be “% increase in sales.” Again, you can make this measure work better for you by adding depth. An example would be changing the phrase above to read “% increase in sales of XX product/service.” Change KPIs are generally better at helping you quickly and clearly identify performance.
The moral of the story in telling stories with your KPIs? Add depth and be clear. As you plan for the year, be aware of both the details and types of KPIs you create. Thinking of the details ahead of time will give you a much more detailed story to tell as you manage your organization’s strategy.