Business is about action. Action to get things done – the right things. And to ensure you are doing the right things well, you need KPIs that help you align on specific goals, drive consistent measurements of ROI and track what efforts produce the best results.
Without meaningful KPIs current measurements may not be used because they are not seen as relevant, there are no clear links between your strategy and your goals and you do not know how to measure your goals.
To set effective KPIs, four important steps need to be followed:
- Align objectives to organizational strategy
- Choose effective KPIs
- Define data sources and platform
- Communicate, socialize and improve
KPI steps to follow
- Align objectives to organizational strategy – your objectives and goals should be linked to the overall business strategy. They are the translation of strategy into lower-level goals. The strategy helps to motivate and give focus and the KPIs ensure you are staying on track.
- Choose effective KPIs – relevant KPIs tell the business story very clearly. Research industry indicators to determine which KPIs will help you meet your goals. Create well-defined and quantifiable measurements.
- Define data sources and platform – the issue of data sourcing can often be a big frustration point. Take time to search for the right resources and data in order to create a useful dashboard. Here the saying “good data in means good data out” applies.
- Communicate, socialize and improve – it is important to share your KPIs and dashboard with key stakeholders and incorporate their feedback. This will enable you to evolve your metrics, monitor success against them, and consistently communicate results.
Meaningful KPIs drive action
The ultimate goal is to synthesize trustworthy data to create meaningful KPIs that drive action. The KPIs need to become an integral part of your strategy. Following the steps outlined here will enable that to happen.