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How to find a KPI for ... ?

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A practical guide on how to find a KPI for people, project, business goal. Check out the step-by-step approach to the indicators that we recommend. Read more http://www.bscdesigner.com/find-a-kpi-for.htm

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How to find a KPI for ... ?

  1. 1.  To support intuitive guesses with the numbers  To understand the nature of the project better  To have early-warning signals and prevent big losses  To see that we are on the right track in project execution
  2. 2.  Step 1 – Understand business context  Step 2 – Prepare an action plan  Step 3 – Find proper leading and lagging indicators  Step 4 – Load indicators with the details  Step 5 – Automate with the software
  3. 3.  Before looking for KPIs you need to understand the business context well, answer these questions: › What is your business goal? › What are the success factors? › What results do you expect to achieve?
  4. 4.  Business goal: get more leads interested in our service.  Success factors: find effective and efficient marketing tool to generate new leads.  Expected results: leads converted into customers.
  5. 5.  How are you going to achieve business goal from Step 1? › Do we have a clear action plan? › What tools will be used? › What factors are important for successful execution? › Ask your team a number of “How?” and “What?” questions to make sure they know how to achieve the goal.
  6. 6.  Our action plan will be: › Research current market and formulate attractive proposal. › Find cost-effective way to deliver our message to the prospect clients. › Work with generated leads and convert them into clients.
  7. 7.  The business goal from Step 1 that you want to achieve has: › Factors that determine the success of execution (leading metrics); › Factors that confirm that expected results were actually achieve (lagging metrics); › Make sure that you has at least one leading and one lagging metric for your business goal.  If you are not sure about success factors and expected results, then return to the steps 1 – 2 to research the topic more.
  8. 8. • For the part of action plan “Research current market and formulate attractive proposal” we have the following indicators:  Leading indicator: the number of prospects who participated in the research.  Lagging indicator: prospects that contacted us for the details.
  9. 9.  By now you should have a set of: › Clear defined business goal › Action plan › At least one leading indicator (success factor) › At least one lagging indicator (expected results)  Make sure that indicators: › Are measurable and your team know how to get the value for them;  Are actually linked to the business problem that you are trying to solve, if not, return to the step 1.
  10. 10. › Business goal: get more leads interested in our service. › Action plan: research current market and formulate attractive proposal. › Leading indicator: the number of prospects research. › Lagging indicator: prospects that contacted us for the details.
  11. 11.  KPIs won’t work if they are not automated with user friendly software: › If you have 2-3 KPIs use MS Excel › If you have more KPIs and complex business context, use professional Balanced Scorecard software (for example, BSC Designer)  In software: › Build strategy map where business goals are linked with each other › Align KPIs and action plan with each business goal
  12. 12.  Strategy map in BSC Designer with business goals, KPIs, and action plan.
  13. 13.  Make sure that you have some supporting documentation that summarizes the results of steps 1 - 5.  Make sure that the cause-and-effect connection between various business goals is defined.  Make sure that you have an action plan that includes “What if this KPI is in the red zone” part.
  14. 14.  Good KPI is aligned with business context and action plan.  Good KPI helps to understand project better.  Good KPI is updated regularly (depending on the business goal).  Bad KPI is not aligned with organization’s strategy.  Bad KPI is used for formal reporting only.  Bad KPI is updated annually or is not updated at all.
  15. 15.  After following steps 1-5 you have aligned leading and lagging indicators with your business goal.  Repeat the process for other business goals to find more indicators and to make your business more trackable. How to find a KPI for...? | WWW.BSCDESIGNER.COM
  16. 16.  Check out BSC Designer PRO (Windows desktop software) at www.bscdesigner.com  Checkout BSC Designer Online (Cloud- based software) at www.webbsc.com

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