KPIs, otherwise known as Key Performance Indicators, are defined as quantifiable measurements or data points used to gauge your company’s performance relative to a goal.
In other words, you can track KPIs based on your objectives.
Whether that goal is to increase sales, improve your ROI, or simply deliver a better customer experience, learning how to identify your KPIs will help you understand where your areas of opportunity are and what you can do to improve.
But why should you invest time and energy in identifying your KPIs in the first place?
Simply put, they’re the metrics that tell you whether or not you’re making progress, staying stagnant, or veering off track.
4 Steps to Identify Your KPIs
Make sure you structure your KPIs on things that directly contribute to your organization’s annual objectives.
From here, you want to evaluate the quality of each new KPI by asking yourself the following questions:
- Is it easily quantifiable?
- Is it within your control?
- Does it connect directly to the objective and overall strategy?
- Is it simply defined and understandable?
- Can it be measured?
- Will it remain relevant?
Next, assign ownership for each so there is accountability for the KPIs being met.
Ask yourself: Who in the organization is the most equipped to handle it end-to-end?
Once you have the designated team member managing a specific KPI, monitor and report back regularly to offer transparency.
It depends on the business, but usually, you want to report on KPIs every week or so.
Are certain KPIs more important than others?
Yes, but also… no.
What’s important is finding your organization’s vital key indicators, which depend on your specific goals and industry.
For example, if you’re trying to get funding or you’re looking for investors, then tracking your financial KPIs would make more sense.
On the other hand, if your business objectives are to hire and retain more team members, then other indicators will be more valuable to you.
Overall, the most successful businesses know how to track their KPIs, and they also do it diligently. True leaders know how to look at the data and adjust their strategy to reflect the numbers as well as the overall goal of the organization.
To learn how in the most comprehensive way, join us for our upcoming 10X360. It’s a two-day event where my executive team and I hone in on all the most important aspects of the core four pillars in business: people, operations, finance, and marketing.