How do you define and track key performance indicators (KPIs) for your processes?

1 What are KPIs?

KPIs are quantifiable measures that show how well a process, project, or activity is achieving its desired outcomes. They help you evaluate the efficiency, effectiveness, quality, and impact of your processes. For example, some common KPIs for a sales process are revenue, conversion rate, customer satisfaction, and retention rate.

2 How to choose KPIs?

Choosing the right KPIs is essential for aligning them with your strategic vision, mission, and values. When selecting your KPIs, you should consider their relevance to your process and stakeholders, their specificity, measurability, actionability, and timeliness. The KPI should reflect the critical success factors and the value proposition of your process. It should be clearly defined and understood by everyone involved in the process, have a clear target, baseline, and timeframe. It should also be measurable and verifiable with data from a reliable and consistent source. Furthermore, it should be actionable and influenceable by your process to provide insights that can help you improve performance and outcomes. Lastly, the KPI should be timely and updated regularly with relevant and accurate information for making timely decisions.

3 How to track KPIs?

Tracking your KPIs requires a system and a tool that can collect, store, and display your data. Spreadsheets, dashboards, reports, or software applications can all be used to track your KPIs. However, for the best results, it is important to ensure that the tool has accessibility, integration, visualization, and customization features. The tool should be user-friendly and easy to use by everyone involved in the process. It should also be integrated with your data sources and systems and have the ability to import, export, and sync data from different sources and formats. Additionally, the tool should be visual and interactive with the ability to display data in various charts, graphs, tables or maps. Finally, it should be customizable and flexible to adapt to your specific needs and preferences. This will allow you to create, edit and delete your KPIs as well as filter, sort, and group your data.

4 How to analyze KPIs?

When analyzing your KPIs, it is important to be objective, curious, creative, and action-oriented. You should remain unbiased and avoid making assumptions based on personal opinions. Ask questions and explore different perspectives to understand the data. Look for patterns and insights that can help you generate ideas and solutions. Use the data to inform decisions and actions that can help you achieve your process goals and objectives. Various methods such as benchmarking, trend analysis, gap analysis, or root cause analysis can be used to analyze your KPIs.

5 How to improve KPIs?

To improve your KPIs, you should create a culture and use frameworks such as PDCA, DMAIC, or Agile. This culture should include alignment, accountability, and adaptability. Alignment means aligning your KPIs with your process vision and values, communicating them to the process team and stakeholders, and ensuring everyone understands them. Accountability means assigning roles and responsibilities for your KPIs, tracking and reporting them regularly, and rewarding and recognizing the achievements of the process team. Adaptability means reviewing and revising your KPIs periodically, responding to changes in the process environment, and embracing feedback from your KPIs.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?