Spring Cleaning your KPIs
Knowing if you’re doing well is really important for any organisation.
But knowing if things are going wrong can be even more important.
Your Key Performance Indicators (KPIs) are metrics that keep track of those factors and make sure the organisation is heading in the right direction to achieve its objectives.
For example, a financial KPI for a charity could be ‘the average size of a donation’. One that works for most organisations is ‘What is your staff retention rate?’.
The thing is…
- how many do you actually have?
- how do you monitor them?
- and when was the last time you took a good hard look at your KPIs and thought about what they are actually doing for you?
When we start working with a client, we often find that the KPIs have been a bit neglected. When reports are due, someone spends a few frantic hours – or even a couple of days – getting everything together. They’re looked at and then, unless anything is crying out for attention, it’s pretty much back to normal next day.
We review each KPI and ask the following questions:
How long does it take you to calculate?
If it takes days of work to calculate a number that’s looked at once a month or quarter – is it worth it?
Perhaps it uses data from multiple sources that need to have manual extracts run, then further work to bring it all together.
Could a simplified version be as effective for you? Or something else that could work as a proxy?
If it’s genuinely needed then it’s an ideal candidate for looking to automate – an area we often work to develop for our clients, creating a data pipeline to provide a frequent and accurate set of data. Losing the manual process frees up time for people to focus on what the numbers mean, and how they can create opportunities to change them.
What action do you take because of it?
A KPI is more than just a number: it shows change within the organisation.
Is it improving? Is it getting worse?
One of the most important questions we ask about a KPI is what you will do when you see what that trend is.
Say you are measuring the number of complaints that come in and you see that the count around a particular area has increased, although the overall number has stayed a similar value. Do you accept it, and wait to see what happens the next time you look? Or do you give someone responsibility to establish the cause, and look at ways to improve?
How often do you look at it?
Do you go to all the effort of deciding what the most important measures are and then just look at them once a quarter? The impact of changes within your organisation may not be seen quickly enough.
Consider how quickly change can affect a KPI. If you are measuring the number of visitors to your website, you can create social media campaigns that could boost your numbers and see your KPI start heading in the correct direction within days. Others such as staff retention may take several months to see a turnaround.
By creating dashboards which make the metrics visible at any time, we can help our clients feel more confident they can truly take control on what’s happening, and react quickly and with confidence.
How many are you looking at?
Sometimes it can feel like the more you measure, the better. But the reality is we’re all short on time, and it can create something that feels so onerous you don’t give the really important ones the attention they need.
Simplify your view, review frequently, and automate to allow the detail to be there at the click of a mouse if you really need it.
A simple visualisation in the form of a dashboard can make all the difference. Get only the most important KPIs in front of you whenever you need them.
So now you’ve started thinking about these questions, how are your own KPIs looking? Time for a bit of spring cleaning?