Many businesses use one of two common approaches to select KPIs. The first approach is to adopt industry KPIs. The second approach is to pick trivial KPIs.
Both approaches involve doing some research, followed by a discussion to determine which KPIs to use. Unfortunately, these approaches unlikely would get you KPIs that are pertinent and impactful for your business.
On adopting industry KPIs, the thinking with that is to align the organization’s performance with the industry benchmarks. So what does it mean when your performance exceeds the industry average? How would it help to differentiate your business from competition?
On selecting trivial KPIs, you end up with a basket of KPIs that seem logical. And most of the time, they are fairly easy to implement. However, they might not drive the right focus for your business.
The purpose of KPIs is to focus on areas that require improvement. Adopting industry KPIs or selecting trivial KPIs would not facilitate that. The purpose of KPIs is to focus on areas that require improvement. Click To Tweet
To get quality KPIs, you need to engage team members, business partners, and stakeholders to identify issues that hold your business back. Then, determine the indicators to monitor performance. By engaging the right people in the conversations, you get alignment on where to focus your energy, the outcomes and KPIs. You build collaboration. You get collective commitment and ownership of results.
This engagement does take time. There is no short cut to it. When you use inappropriate KPIs, you risk wasting energy and resources on improving things you don’t care.