Measuring performance and aligning goals are synonymous today with KPIs. The most commonly heard complaint is how there are so many KPIs to measure. But, the way to make sure that you are on the right track is to pick out 5 to 10 KPIs.
Why? Because KPIs often have a way of getting confused with metrics. Yes, KPIs are metrics but not all metrics are KPIs.
Any activity that can be measured can be a metric but a KPI has to drive a competitive advantage.
So, what are the key points to be considered when you want to narrow down your metrics to just a few KPIs?
Know your starting point: Take a stock of where you stand with your objectives and metrics. Which metrics are still relevant, which ones are redundant and which ones are missing. What are you already doing at this point and where do you want to go from here.
Build downwards: Start to review your architecture from top down. From goals and results to the methods of achieving them and then down to the measures. When you reach the KPI level you should be able to distribute and allocate them easily.
Vet any new metric: With the amount of data we have coming our way it is very easy to have new metrics all the time and they all seem important to some stakeholder or another. You need to start vetting any proposed metric with a checklist so as not to add senselessly to your core.
Perform maintenance: Periodically go through your KPIs and see if they still serve the same purpose. See if they need to be looked into with the same frequency or can the frequency be reduced. This helps to make sure that no unnecessary components remain on your dashboards. Do not be afraid to replace one KPI with another if that is what works for you.
Of course the cliché of it all being industry related holds true in the end. The thing to remember is that while there is no golden rule the alignment of KPIs with goals is the formula to work with.
Read about Choosing the KPI that works for you.
Written By: Meghna Verma Meghna Verma is the CMO at Captain Dash. You can reach her on Twitter @M3GV3RMa .