How do I Develop Key Performance Indicators (KPIs)?
Assess the Effectiveness of your Key Performance Indicators
There are six steps to developing Key Performance Indicators
Target – Make sure you measure what matters
The first step is to target your measurement efforts - consider what outcomes matter most to you and your business, identify what will show that you have achieved these outcomes and then translate this evidence into quantitative or qualitative measures.
Ask the questions:
- “How will we know if this outcome is being accomplished?”
- “What will provide us this information?”
Ensure your measures are SMART (Specific, Measureable, Achievable, Realistic and Timebound)
Don’t fall into the trap of overloading your business with measures that are not critical to the strategic direction your business wants to take.
Gather – Gather data that is appropriate
The next step, once you have your measurements, is to check if appropriate data is on hand and has enough integrity – is applicable, dependable, understandable and realistic. If the data is not available, determine how you will get the data by:
- Defining the data you require
- Identifying the source(s) of your data
- Defining what form it will be captured in
- Developing a procedure for collection
- Identifying who will be responsible for collecting it.
Manage - Manage your data so it’s quick and easy to retrieve
Once you have collected your data, you need to store it in such a way that it maintains its integrity and is easy and quick to access when you need it.
Analysis - Turn raw data into information
Turning data into information is the whole purpose of analysis. Choose the simplest analysis approach that will provide the information into the form that you need and in language appropriate to the audience.
Communicate – Communicate performance information to users
Present performance measures in ways that provide simple, relevant, trustworthy and visual answers to the driving questions. Pay particular attention to how it is visually presented. The design of graphs, the choice of language, the use of formatting and the structure and layout of reports can all influence the usefulness and usability of performance information.
Reports are most useful when they match the processes of decision making of the audiences that use them.
Interpret - Interpret performance information to identify trends
Identify the trends highlighted by performance information into conclusions about what’s really going on. Use valid statistical methods to ensure that you interpret performance information accurately.
Act – Translate learning into action
Now is the time to put all you have learned into use. Having worked out what is really going on with your organisation’s performance, you are ready to make some decisions about what to improve, how much to improve it by and how to do that improving. There is no point in putting in all that effort if it does not result in improvement – this step is where you get the benefits of your hard work, yet many people overlook it!
Get in Touch with Jump
If you need help, or you answered no or unsure to any of the questions in the assessment tool, then Jump Business Solutions can help you. Phone us on +64 6 754 8987 or +64 27 450 5271 or email email@example.com and Jump will come to you, discover your needs, and develop a solution that will create real, long-term and positive change for you and your business.
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