Summary: Best practices to create Key Performance Indicators (KPIs) for your organization, plus 3 steps on getting started including; assigning responsibility, measuring success and promoting results.
The definition of success differs from person to person. To define success for your company in a way that everyone understands, it’s best to quantify. Use numbers, also known as Key Performance Indicators (KPIs), to evaluate your success at reaching targets or accomplishing goals. Employees can compare and contrast their KPIs to the overarching corporate goal, work together to achieve departmental KPIs, and match personal goals with company expectations.
Best Practices For KPIs
It’s important to remember that your organization is like a puzzle. Each department has to work together to complete the ‘big picture’. With that in mind, KPIs from all departments, if successful, should define the success of the organization as a whole.
- Provide Motives: No one wants to think you pulled a number out of your hat. Is this decision based on historical levels? What do you hope to achieve if this number is met?
- Give a Deadline: Most KPIs are set monthly and quarterly. When planning KPI’s set a quarterly goal (120 new clients) and break it down by month to monitor progress (40 new clients each month).
- Make It Interesting: Achieving a KPI is a good feeling in and of itself, but to help employees stay on track, give them something to look forward to. Set a theme around your KPI or tie in its success with a team-building activity.
Example of a KPI
When it comes to achieving goals, each participant needs to know how they can succeed. KPIs, though sometimes ambitious, show where expectations are and give staff the knowledge they need to meet, or exceed, those expectations.
Example: Marketing is responsible for bringing in leads to the site. Currently their website bounce rate is 70%. That means 70% of people are coming to their site and leaving without clicking aka not converting to leads. The Marketing departments KPI is to reduce bounce rate by 20% by Q2.
How To Set Up KPIs For Your Company
When setting up KPIs you need to consider the following 3 things; who’s responsible for the KPI (company, department, individual), measurement of success for a KPI (<95% exceeds, 95% meets, >95% incomplete), and finally, reporting and promoting KPI’s.
1. Assign Responsibility
A recent article stated that although it’s important for organizations to select the correct KPIs for optimal business performance, it’s also useful if managers define KPIs for their department and for members of their teams. Ideally, KPIs will cascade from level to level. This allows people and departments to work in such a way that their activities are aligned with corporate strategy. There are 3 main categories to take into consideration when deciding who is responsible for KPIs. They are; organization KPIs, department KPIs, and individual KPIs.
2. Measure Success
Many KPIs are set up in a pass/fail fashion which means if the KPI is not met, there won’t be much room for success. Consider measuring KPIs by providing a range of expectations. For instance, if you want 600 net new clients in the quarter, place a range on what is considered exceeding, meeting, in range, or review of that target. In this case, 600+ exceeds expectations, 600 meets expectations, between 575-600 they are in the range of the KPI and if it’s lower than 575 the KPI requires review.
3. Report and Promote KPIs
Considering each department uses many different external tools to accomplish its goals, it may be difficult to display KPIs for all to see. Your intranet can bridge the gap by reporting and displaying KPIs for all levels of your organization directly on your homepage or department sites. Below are some best practices for displaying KPIs on your intranet:
- Blogging: Engage employees by displaying the progress of KPIs in a blog post. To get all eyes on the post, display a blog feed on your intranet homepage and send Alerts when a new post is published.
- Company Announcements: Company Announcements can be used for a variety of reasons including quick progress reports on KPIs. Display on your homepage for corporate goals or add to department/team sites for department or individual KPI progress.
- HTML Widgets: Whether you simply edit the HTML Widget, or use IT resources to sync with an external system, widgets are a great visual display to report KPIs. Intranet Connections’ client, Verity Credit Union, displays their company KPIs using HTML widgets directly on their homepage.
- Event Calendar: Be sure to take online communication offline for some much-needed face time. Allow employees to share their success, or progress, with the rest of the company by scheduling regular meetings to discuss KPI progress. Not only does this allow for shared knowledge, it can also assist with problem-solving if a KPI isn’t performing as well as expected.
Have you shared KPIs on your intranet? If so, we’d love to hear from you in the comment section below.