“You can only manage what you can measure”, but if it doesn’t matter, why spend too much time and energy measuring it? KPIs that don’t relate to the goals of the business are like ingredients that don’t belong in the pot and muddle the taste of the dish.
Clearly outlining and understanding departmental goals is the first step in developing solid, meaningful KPIs. Knowing what is truly a measure of success means linking each metric to an organisational goal. Just like the theory that having too many goals makes it hard to focus, having too many KPIs also dilutes focus.
Tether KPIs very strongly to the organisation goals for each primary function of the business and look to industry and competitive benchmarks for guidance; if improving a process speed is your objective, what do other company’s success metrics look like?
A matrix that plots organisation goals, KPIs and benchmarks across the functions of the business (HR, Finance, Sales, Marketing, R&D, IT, Design, Administration, Operations etc) can help clarify what’s really important.
Once the business goals and objectives have been listed, research can be done into what sort of KPIs would best measure process improvements, and input/output activity directly relating to those objectives.
Review metrics regularly as to whether they still relate to company goals. If a metric no longer matters, is there still a need to measuring it?
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