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KPI guides
KPIs stands
for “Key Performance Indicators” and are a mechanism by which individuals,
departments and companies track their performance. If
you do not have a good baseline and understanding of basic performance metrics,
you will not know when you are slipping into mediocrity or worse. KPIs help keep everyone on track and moving towards goals.
Some people will
excel and move up to higher levels of achievement and others will
remain in entry-level positions their entire career. Many factors come
into play when determining who will be successful and who will be mediocre or
unsuccessful their entire lives. I, for one, have always desired the path of
success. To that end, I use KPIs to track performance each month.
Good
KPIs are not subjective but objective. They
are very black and white and do not leave much in the way of wiggle room to
debate their meaning. This is their power. As KPIs are tracked over
time, the ability is gained to see how performance stacks up over prior
months and years. Almost all of my KPIs I graph year-over-year. This allows me
to compare performance over the last few months and the prior year. When I see
something that is not within an expected range, I am able to look into it
immediately and take action, including rewards for achievement, if needed.
In order to
define good KPIs, I need a good understanding of the vision, mission, and goals
of the company, department, or individual. Yes, I do believe that
individuals need vision and mission statements and clearly defined goals
to be successful.
Once I
understand where the department or individual is coming from, and where
they need to go, I can start working on KPI development. I follow a pretty
basic and easy method for determining KPIs.
- Brainstorm to capture everything that can be
empirically measured. As with all
brainstorming, do not evaluate the quality of feasibility of the
suggestions at this point. You want a complete brain dump of everything
that can possibly be measured.
- Review the mission, vision, and goals. If working in a team, everyone needs to have a clear understanding
of the mission, vision, and goals. If working on personal KPIs, also
review job descriptions, annual reviews, and peer feedback.
- Group and rank each of these possible KPIs by
their relevance and ability to provide clarity on the mission, vision, and goals of the company, department, or
individual.
- Review the possible KPIs for feasibility of
tracking. We may have some very good ideas for
KPIs that are not realistic because the tracking mechanisms are too
burdensome or simply unavailable. These KPIs go off on a separate list for
possible future consideration or implementation of a tracking mechanism.
- Add the tracking frequency for each
of the possible KPIs: Again,
this is a second way of looking at feasibility and clarity the
KPI will provide. If the KPI has to be tracked in a way
that is prohibitive to implement it should be moved to the second
list.
- Remove all possible KPIs that do not add value,
provide clarity, or cannot be successfully tracked. If the list is still too long, I simply take the top X number of
items per grouping.
- Develop a work plan to capture the KPI data
points based off the data capture frequency.
- The first week of each month, compile
all KPI information and generate Excel charts and summary tables. I review this information closely and look for any outliers.
Anything that is above or below expectation is investigated and
understood. While investigating unexpected improvements, always look and
see if the source of improvement may be applicable to other areas.
As an example of
KPIs for an IT department, they can track the total number of closed
support tickets, initial response time, response time to close a ticket,
recurrence rates, failure rates, up-time percentages, support hours, etc.
It is also very
common to combine KPIs in your charts and tables. Using the above example,
you could graph support hours and total number of closed tickets. When looking
at this year-over-year, you should be able to see the effect of support
hours on ticket closure rate. Furthermore, looking at these graphs, you can see
if your team is closing support tickets at a faster or slower rate than prior
periods.
Charting various
KPIs are powerful tools when requesting additional resources or policy
changes. This single activity alone has allowed it to
influence policy and staffing decisions because I had the data to back up my
requests.
I would
challenge everyone to develop KPIs. Track them regularly and review the results
monthly. After just a few months of tracking, you will be able to see patterns
and start adjusting to further increase productivity and achievement of
yourself, team, department, or company.
How to Develop Key Performance Indicators (KPIs)
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