It is critical to review and evaluate processes to determine their effectiveness. Sometimes, there is a scarcity of the data you need or perhaps it is unreliable or riddled with inaccuracy. Other times, we may find ourselves swimming in it and struggling with how to best make sense of it all. No matter if you are in either camp or somewhere in the middle, it is essential to ensure that you select the right KPIs to govern your review process.
What separates a KPI from data or business metrics?
Perhaps the question could be reworded ever so slightly to give a clue – what elevates a KPI from being simply data or another metric? When summarizing a position, highlighting progress towards a goal, or responding to a broad question from management that simply wants to know “how are we doing?”, a key performance indicator will get the job done. A KPI will cut to the chase and provide critical information to the decision-maker so that the right individual can make the right decision at the right time.
How does one go about selecting effective KPIs?
As Tolstoy famously opened Anna Karenina, “Happy families are all alike; every unhappy family is unhappy in its own way.” There are a lot of parallels between Tolstoy’s insight into the human condition and the struggles businesses face in the 21st century. Your pain points will not be identical to your competitors. It would be foolish to try and plug and play a handful of KPIs discovered in a google search into your organizational structure and expect them to propel your business forward. Your businesses’ needs are unique and should therefore be uniquely addressed; and if you are able to understand and select your KPIs with deliberate consideration, you may have the tools to provide course correction and guide your organization towards its goals.
Fine-tuning a KPI
If a KPI is a key performance indicator, then how often should it be revised? Do frequent adjustments to the KPI itself help drive improvement or hinder progress by needlessly redefining success? Are processes under evaluation improving, immune to change, or simply adapting to the data collection without driving meaningful improvement? Do your organization’s measurements stop at the KPI or are you monitoring the delta in your results over time to see how you are responding to the KPI itself? How broad should a KPI be, or at what point does it become too specific that it ceases to be a KPI? How many KPIs are too many?
There are many questions a healthy organization must wrestle with when evaluating KPIs for inclusion in a dashboard. If you are unhappy with the insight and visibility of your current KPIs, if you are on a journey to update your KPIs, or if you haven’t touched your KPIs for far longer than you would have liked, then join Arkieva as we present a webinar on how to select effective dashboard KPIs.
There is no magic deck of KPIs that you simply need to adopt to make your organization work more effectively. Instead, we’ll look at the approach one should take when considering effective KPIs in relation to your organizational needs. Are you measuring the cause or the correlation? Are you measuring the output or the outcome?
Register now and join us on Wednesday, April 12 at 11 a.m. ET as we discuss these challenges and more concerning the selection of effective KPIs.