How To Develop A KPI That Works For Your Business

How To Develop A KPI That Works For Your Business

November 13, 2019

If your company has no vision, then you will not see success. In order to grow, everyone needs to be on the same page about goals. In the famous words of Stephen Covey, “Begin with the end in mind”. Let’s take a look at these 5 steps that will help you build world-class Key Performance Indicators (KPIs).

  1. Figure Out the Issue

Ask yourself, “What problem do I need to solve?” That will be your root issue and the landing point from where you will build up from. That way, you can tie the rest of your metrics to this issue.

  1. What Indicates Progress Toward Your Goal?

One mistake many leaders make is that they go from figuring out the problem they need to solve to trying to measure their success. However, you first need to figure out some indicators that you’re on your way towards your goal. These indicators will also help keep you on track because they can steer you back towards the goal.

  1. How Will You Track Performance?

This is something else that will keep you on track towards your goal. Remember, that the KPI is measuring the outcome. You need to be able to measure all the steps in between to make sure you’re still on track and to make adjustments if necessary.

For example, if your end goal is to add 5 new customers to your client list, then your metrics would be how you measure this. Would you achieve this by having a certain amount of meetings? Cold calling a certain amount of potential clients? These would be your indicators to help you achieve your goal. The metrics you would track would be how many meetings were held or how many cold calls were made.

  1. What Is Your Key Performance Indicator (KPI)?

This would be the overall goal. In the example above, the KPI would be adding new customers to the client list. Your KPI is actionable and explains what you’re tracking and why you’re tracking it.

  1. Where Is Your Information Coming From?

The last thing you need to do is figure out the source for where your information is coming from. How is information being tracked and is it accurate? The best way to ensure the information is accurate is to assign only one person to each metric. That way, you have one informed person who will know if the information is accurate.

~ Written for us by our associate Gary Sorrell, Sorrell Associates, LLC. Copyright protected. All rights reserved

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