Key Performance Indicators (KPI), also known as Key Success Indicators (KSI), help businesses define and measure progress toward their goals. These must be quantifiable measurements in which results define the success of the business strategy (based on the business priorities).
KPI’s are useful because they reduce the number of decisions that are based solely on instinct or gut feel and make decisions based on objectivity and facts. These quantify the achievement of goals by setting, monitoring and measuring against a target. As businesses grow, it becomes harder to stick to the important achievements that are requered. KPI’s also allow brands to focus on facts when things get out of control.
One of the problems with KPI’s is that instead of identifying the information that’s needed and subsequently design the most appropriate indicators to assess performance, people often use the ‘ICE’ approach: Identify everything that is easy to measure and count, Collect and report the data on everything that is easy to measure and count and finally End up scratching your head thinking “What the heck are we going to do with all this performance data stuff.
It is recommended to focus on three or four measures that are essential to the business reaching its goals. It is important to keep the number of KPI’s small to prevent distraction. A common mistake is to measure everything when the goal is to measure just one thing that will lead to achieving the successful goal.
To sum up, KPI’s are achievable through the following steps:
- Be specific: pertaining to the goal of the brand.
- Make it measurable: for the brand to analise its progress.
- Make the goals achievable and realistic.
- Be relevant when directly linking the business and metrics.
- Consider Time Frame: placing goal achievement in a certain time frame.