Starting with a lean Key Performance Indicator (KPI) methodology is the simple and practical way for the beginner, the busy, and the budget-constrained to measure what matters for business performance.
Ultimately, I will always advocate that a robust performance measurement methodology is critical for every organisation to master. If we can’t know how well what matters is working, we can’t really manage anything well.
But practically, not everyone can start with a robust performance measurement methodology. Skill, experience, time, and money – especially in small businesses and non-profits, can all constrain the ability to start with something rigorous like my performance measurement methodology.
You can lay down a foundation for good measurement in less time and with less effort and know-how.
Good measurement can be as simple as having clear goals, choosing a few relevant measures, tracking them through time and looking for the signals worth responding to.
It’s best to start this with just one or two goals, before you progress to measuring a team or department’s collection of goals and align them to the corporate strategic direction.
More advanced organizations align and link goals and measures throughout the whole organization. Experts have performance measurement embedded naturally into routine planning, reporting, decision-making and performance improvement processes.
But it’s a journey to move from novice to expert.
Getting started on this journey means keeping it simple, relevant and making an impact.
There are 12 very specific but very simple and easy-to-follow steps to set up your first powerful performance measures:
- Choose a goal you really want or need to achieve.
- Make your goal measurable by teasing out the performance result(s) it implies.
- Use sensory rich language to describe your result.
- Choose potential measures that give evidence of your result.
- Evaluate your potential measures and select the most meaningful one.
- Name and describe your selected measure.
- Define exactly how to calculate your measure’s values.
- Get the data and make it ready for analysis.
- Calculate your measure’s values.
- Choose the presentation method that best highlights your measure’s message.
- Interpret what your measure is saying, and understand why it’s saying that.
- Make a decision, and take action to move closer to your goal.
An important thing to continue reminding yourself of is that we often over think this stuff. Just get in and do these 12 steps, aiming for practicality, not perfection.
It’s more important to learn the right way and less important to measure everything.
When you’re just getting started with performance measures, it’s more important to learn the correct mechanics of measuring what matters and to get the experience of the value of measuring what matters.
It’s far less important to measure everything or get everyone involved right up front. You should only ever measure what truly matters in helping you pursue and achieve the goals or results you want in your business or organization.
If measuring performance feels like jumping through bureaucratic hoops, you’re doing it all wrong, and doing more damage than good. Start small and specific, learn quickly, and measure more only as the relevance and buy-in start to grow.
We often over think performance measurement and make it more complicated than it needs to be. Be practical, not perfect.
Does your current approach to performance measurement include any of these 12 steps? What’s missing? What are you over thinking? How can you streamline and improve your KPI approach as the same time?
About the Author
Stacey Barr is a specialist in organisational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures.