KPIs (Key Performance Indicators) are how you track and improve your performance and goals in a number of key areas. Here's a guidance to help you set and track your KPIs step by step.
Step 1 - Define Your Goals
Before choosing KPIs, you need to have a clear understanding of what goals you want to achieve. This is how you’ll have a better idea of what metrics are important to follow while working on your goals.
Step 2 - Set Your KPIs
Once you set a goal, you have to define how you plan to reach that goal and assign KPIs accordingly. You don’t need to track everything all at once! For each goal that you set, you should only set a few KPIs, each of which should be directly correlated with that goal.
When you’re coming up with KPIs to track, ask yourself these questions:
- What is the desired outcome?
- Why is this outcome important?
- How will you measure progress?
- In what ways can you influence the outcome?
- How will you know when the outcome has been achieved?
Step 3 - Set Actionable KPIs Targets
Having actionable KPI tracking goals allows you to more accurately measure your progress. It's suggested to develop both clear short-term and long-term targets. When you know what your long term timeline is, work backwards to identify milestones you need to hit. Those milestones then become your short term targets!
Step 4 - Track Your KPIs
For KPIs to have an effect on your business, you need to establish a way of tracking them regularly and consistently. Define the data sources from which you are going to pull data, and specify the way you will use these sources to avoid skewed results. The frequency of tracking your KPIs depends on the type of metrics you chose to follow.
Step 5 - Review, Adjust and Evolve KPIs
In order to keep your KPIs effective, you’re going to need to update them at some point as your business might changes in a lot of ways over time. Reviewing your KPIs lets you fine-tune your process and ensure your indicators are showing you the correct information.