KPIs the value and the danger

If you want to set clear objectives and measure progress then don’t underestimate the difficulty of defining good key performance indicators (KPIs).

I have repeatedly seen the disaster or poorly implemented KPIs. They waste tremendous amounts of time when people are forced to track meaningless numbers which don’t add value to your business. In the worst case, it can drive your team to work on the wrong topic or become a political exercise of gaming the KPI to look good.

I have fallen into this trap and seen its impact. It was ugly.

I was once handed a poorly defined KPI which was trying to measure value improvement but there was no baseline. 📈 You could show massive “value” by simply sending one poor offer followed by a standard one. Clearly not the outcome our management wanted.

The worst case I experienced was a measurement of customer satisfaction. The team was reporting the number of surveys sent, and not the customer feedback! 80 to 90% scores all around. 🤦‍♂️

It does not need to be this way, good KPIs can help align your teams to the goal and transform your business.

Take KPIs as seriously as your financial results.

Learning from these mistakes I am now much more structured around defining KPIs. Use a strategy X-matrix (see my other article) to link your KPIs to specific actions, annual objectives and back to your long term strategy. KPIs need to have an owner, data source, formula definition and an explanation of who will use them.

Time and energy spent on this will help to;

• 👩‍💻 Regularly monitor business progress towards its goals

• 🧭 Align your team to the desired outcomes

• 🗺 Provide a path to your strategy roadmap

• 🔭 Facilitate early identification of issues so you can take action!

I hope this article inspires you to go back to your business and validate all your KPIs. Believe me, your teams and balance sheet will appreciate it.