Key Performance Indicators (KPIs) are all the rage these days. Many leaders of industry have instant access to their KPIs, but still in their gut they know that there’s much missing from the dashboard.
The famous Peter Drucker quote “What gets measured, gets managed” rings true here too. A bad set of KPIs can result in a lot of unproductive busy work, or as I like to call it Key Performance Indicator Hell.
Hopefully that’s not your situation, but if it is, here are 5 tips for to success that can help you drive performance through KPIs.
Tip 1: Emphasize the word ‘KEY’ in Key Performance Indicators
The reporting tools that have made it easier to present all your KPIs in a million different ways, created a flurry of new problems:
- Too many KPIs: By the time you’re reporting on more than 10 KPIs, chances are that some will look good and some will look bad, just due to normal variation. What does it mean to be doing great in 5 KPIs, ok in 3 KPIs, and terrible in 2 KPIs?
- Too much overlap in KPIs: Often dashboard reports show signs of major scope creep as the report writer attempts to please all viewers. When dashboard reports contain 2 or more KPIs that essentially represent the same underlying concept (i.e. total widget units shipped, total boxes of widgets shipped, total widgets weight shipped, etc) it makes it distracting for viewers to know what KPIs they are supposed to focus on.
- Too many options: Just because it’s easy to report KPIs in a variety of ways, it doesn’t mean that it’s the right thing to do. (more…)