KPI’S – I’m Done With Them

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KPI’S – I’m Done With Them

By Rhonda Jones posted 11-08-2016 09:14 PM

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The KPI has been my pet peeve for a long time. Reason being is that my stakeholders get a bit lost in the concept, mistaking the overall goal as the KPI “our KPI is to increase sales by 25%” or just wanting to use a different name; CSF (Critical Success Factor), Objective, Target, whatever else they come up with. So, I’ve taken a different approach. I tell them don’t focus on the name. Call it whatever makes you comfortable. Let’s just make sure we are all on the same page regarding what metrics (no confusion on that term) are important to your business. I then ask them questions about their business or marketing initiative to find out what they are trying to accomplish. Then I ask what metric they feel is important and I get answers like website “Visits”. I then give them a situation. Real conversation.

Me: “If you had 200,000 Visits a month are you successful?

Client: (with big smile): YES!

Me: Out of those 200,000 visits to your website, 0 people walked through your door (client owned a store) are you successful?

Client: Oh… (sad face)

Me: Visits is NOT what we need to look at.

The conversation then became more detailed to get to the root of what makes money for the business. Get people in the store, not just visiting the website.

Bottom line – I don’t spend time explaining the Key Performance Indicator. I mention it but, I focus on having a conversation regarding what is important to the business.

Keep Profits Increasing

Keep performance Improving

Keep Pushing inovation

Thoughts?

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Comments

Rhonda Jones

03-29-2017 12:05 AM

Casey, Thank you for the comment and recos.

Casey Carey

03-02-2017 03:46 PM

Bravo, I totally agree that the name is less important. A couple techniques I've used that help:

Create a metric map - visualize the relationships for high-level metrics down to those that mostly impact the outcome
Align those metrics with Goals, i.e. grow revenue by 10% from X to Y.
Distinguish between "lag" metrics, those that are primary outcomes of business activity and initiatives and "lead" metrics which reflect the work being done and short-term decision making.
A good strategy will have the right combination of volume (counts), efficiency (ratios), and effectiveness (cost per).

Also, Stephen Covey's 4 Disciplines of Execution is a good framework.

Happy measuring.

Rhonda Jones

11-14-2016 02:40 PM

Ioannis, Thanks for the comment.

Ioannis Gedeon

11-12-2016 08:12 AM

I think the problem was on the phrase "our KPI is to increase sales by 25%”.

Increasing sales is a GOAL the business have and not a KPI. While you correctly highlighted the fact that the chosen metric can not be a KPI as it is NOT measuring the GOAL set by the client, I think the business needs to understand the difference between an Objective and a Goal, then move to KPI talks.

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