Today I’ll share some insights on how to make your KPIs or Key Performance Indicators, work for you in accelerating the execution of your strategy. I’ve always believed that the right tools can make all the difference, and KPIs are one of those tools that can help you achieve faster results.
So, let’s dive in and talk about the strategic role of KPIs and how you can choose the right ones for your business.
KPIs, are measurements of progress toward your goals and a strategic tool to accelerate strategy execution and make better decisions. It’s essential to understand which KPIs are most significant for your strategy and execution timing.
It is said that “what you measure grows.” Setting a goal for each KPI ensures everyone in your organization is working towards the same objectives. It’s like having a compass that keeps you on track.
When it comes to choosing the right KPIs, there are two types to consider: leading indicators and lagging indicators. Leading indicators are like crystal balls that give you a glimpse into the future. They help you see potential issues before they happen, allowing you to course-correct and stay ahead of the curve. For example, measuring the number of appointments your sales team secured for next week can predict how many proposals will be issued and how many will close.
On the other hand, lagging indicators are like looking at the scoreboard after the game is over. They tell you the final score but don’t help you change the outcome. For example, revenue numbers or units sold. Think of the numbers you look at each week, and see if they are results or forecasts for the near future. Regarding strategy acceleration, focusing on leading indicators is beneficial.
But tracking KPIs without accessible data and the right tools can be slow and cumbersome. I am in favor of technology, and new tools are available. The tool you choose should be easy to implement, simple to update, and accessible to all who need to see and update the numbers.
Tying the measure to a financial goal is like having a GPS that shows you how close you are to your destination in real time. This way, you can instantly visualize the progress and its direct contribution to the bottom line.
You’ll need to establish an updated cadence to keep your KPIs current. The shorter the interval, the better. I recommend a weekly update. This way, you can quickly spot any unwanted trends and address roadblocks as soon as they appear. Time is of the essence when you are looking to accelerate and drive improvements.
Now, let’s talk about some tips for effective KPI execution.
- First, set clear expectations by making KPI updates a part of team members’ job responsibilities and emphasizing their impact on company performance.
- Assign specific team members or departments responsible for each KPI – train and support them.
- Establish a regular reporting schedule and stick to it,
- Simplify the data collection process by automating, eliminating extra steps, and error-proofing.
- Celebrate and Incentivize your teams to adhere to KPI updating practices.
- And finally, regularly review and revise your KPIs based on changes in business goals, priorities, or performance metrics.
So, let’s choose our KPIs wisely, focus on leading indicators, and drive better results. You can achieve your strategic objectives faster and stay ahead of the competition.
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