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I recently presented several educational sessions about Key Performance Indicators (KPIs) at a conference. Over the course of four days, I asked the hundreds of people that attended my sessions to describe their current relationship with KPIs. My survey results showed several interesting tidbits, but one that stood out right away was that roughly 75% had KPIs but didn’t actually know if they were measuring the right things. What?! Imagine all time, effort, and discussions that must have happened for ALL of those questionable KPIs. And then imagine that they were distracting the business rather than actually helping it! It makes me swoon, and not in a good way.

KPIs that count – a blog series that needed to happen

That experience led me to offer this blog as a start to a series I am working on for KPIs. This series will break down the concept of KPIs to make them understandable and practical. Like a really great episode of Bill Nye the Science Guy, without the bow tie (or is there…).

And, as most performance management experts will tell you (if they are any good), you can’t have KPIs until you know what your strategic objectives actually is. In short, the one thing you need to know about strategy and KPIs is that you can’t have effective KPIs until you have your strategy.

Finding your strategy for KPIs

Generally speaking, people get that companies do (or should) have an articulated strategy. These strategies are typically set by senior management or the board of directors and reviewed on an annual basis. They will often be articulated as the 1, 3, or 5 year plan. They are usually associated with focal points in the business and they SHOULD be communicated to everyone in the company. After all, people want to contribute to the company so helping them see the markers along the way sure helps.

Examples of focal points and corporate strategies might be:

Focal Point

Strategic Objectives for This Year

Customer Focus

  •        Achieve and Maintain 95% Customer Satisfaction Rating
  •        Decrease Customer Support Cases by 5%

Sustainable Profit

  •        Increase Net Profit by 10%
  •        Maintain Cost Levels from Prior Year

Employee Excellence

  •        Demonstrate Employee Expertise Through Certification Programs
  •        Increase Warm Candidate Leads by 10%

In this example, I picked 3 focal points, but an organization might have more than this. If you don’t currently have anything like this in place, a good starting point is looking at a balanced scorecard approach.

So, assuming you’ve got some strategic objectives articulated, the next step will be setting the KPIs that track and demonstrate performance towards those objectives.

The next installment will be answering a common question I have received: how does strategy, objectives, KPIs, and metrics all fit together?

Want more KPI's in the meantime? Here's our guide that will help you identify and align on the right KPIs. 

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