Defining The Right KPIs To Measure Your Business Success

If you read my last article, you probably realized that vanity metrics are only relevant for boosting your ego. They don't add to your business growth. We also talked about the different types of Key Performance Indicators (KPIs) that we can measure:

• Content KPIs that measure the subject at hand
• Performance KPIs that measure the process
• Outcomes KPIs that measure the results

I also made a case on why should only measure what we are willing to change. Otherwise, that is no reason for measuring it in the first place.

In this article, I want to share with you some tips and tricks I use to define the right KPIs for me, my business and form my clients as well. So keep reading.

1. Get Clarity in the vision

The very first step I take is to get clarity on my vision. A clear vision of what I am trying to achieve lets me know exactly what I working towards and thus makes it easier for me to commit to it and measure it along the way.

If you don't know where you are going, how you want it to feel, how would you know you have arrived?

Some people get scared about getting crystal clear about what they want and why. Although I understand where they are coming from there is no reason to fear it. Your vision doesn't have to be set in stone. It is okay to improve as you go. Yet, the only way you will know if it is time to upgrade your vision is if you first know what you are looking for. This way you won't settle for less than you deserve.

2. Define what you want to improve

Y'all, constantly measuring is not an easy task! It takes, time, money and effort. So stop trying to revamp your entire business in one move. Prioritize! What is the most important aspect to focus on right now? What would get us the highest return? What would it take for us to level-up?

This question will let you know if you should be focusing on your outcome, your process, or your business object.

A general rule of thumb:

Improving the subject is about "what". It doesn't necessarily mean an increase in sales or a reduction in cost. It means improving the value proposition. I see it as something correlated with the customer experience that will, in the long run, influence your sales.

Improving the process it's about "how". It can make the work more pleasurable for you and your team and not necessarily reflect directly impact sales in the short run.

Improving the outcome is about "why". It can improve your sales and even your profit. I can encompass small tweaks that barely affect your business's processes or subjects or it can virtually change everything.

Measuring is a maater of what are you willing to change?

3. Define what to measure based on the insight it gives about your vision

Most people define a successful business based on the number of employees, the annual revenue and the number of clients. These are good KPIs if those metrics are aligned with your vision, in the first place.

When I started Sharing Knowledge International my vision was to have a small team (around 10 people), to make big profits (a huge revenue can be cut off by huge costs) by delivering high-value services, and focus on the value per client life-time. That is why I always say that I am here for the long term game.

Instead of focusing on the number of clients, I focus on how long are relationship can be and who much value I can provide to my clients depending on the stages of their business and professional journey. All that while having fun, freedom and fire running in my veins.

Can you see what I measure versus what other entrepreneurs might measure?

4. Set up a process to measure

Here go all things including the number of KPI, the frequency of measurement, the tools, the person in charge, et all. At least on an operational level. On a strategic level, I use a full Monitoring, Evaluation and Learning (MEL) Framework making sure we are always operating with our impact in mind.

This is how I don't get stuck in so many qualitative and quantitative KPIs. I focus on what matters to deliver the desired impact. Anything else is noise and what we do with the noise? We listen and we ignore it, we block it, and we shut it off.

There is already too much unhealthy comparison, going on. Especially in online businesses and social media. It used to be something that only social business faced (business focusing on social impact on aspects such as the environment, human life and ecosystems) now is something I see businesses in all verticles going through.

If I were, to sum up, this entire article in one phrase it would be: The right KPIs to measure success are the ones the give you the best screenshot of the outcome you are trying to achieve.

For instance:

• What does business growth means to you?
• What does success marketing campaign looks like?
• What an enjoyable team management process feels like?

These questions can only be answered by you and your business' stakeholders (clients, partners and shareholders. So make sure to include them in the decision making process about what best represents those outcomes.

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Julio Maria Muhorro is a global citizen born in Mozambique. Julio is on a mission is to enable powerful personal transformations to drive life, business, and career fulfilment. He is the founder of Sharing Knowledge International a company offering business advisory, transformational coaching, career and executive counselling, training, speaking engagements, and knowledge consultancy.