Defining Key Performance Indicators

A question frequently asked by businesses of all sizes is what should their Key-Performance-Indicators (KPIs) be and how many should they have.

The identification of KPI’s begins with defining the organization’s strategy and focusing on key Results. These key objectives are measured and are used to align resources.

Key Results must be SMART and should not be more than five.

S – Specific: Make sure your goals are specific and not too broad. “I want to grow my business”

M – Measurable: Have data points to measure against. If you aren’t able to measure your goals, there is no way to know whether you are succeeding.

A – Achievable – Unachievable goals can be frustrating. While it is tempting to set the bar high, if you set it too high, you may never see success. Give yourself little goals that ultimately allow you to reach your higher goal.

R – Relevant: Relevant goals should relate to part of your strategic plan as a business. If you set goals that don’t relate to your business or help you achieve your mission, those goals have very little value.

T – Timely: Give yourself a timeframe in which your goal must be reached. Know how long it should take to reach your goal and hold yourself to that time.

Part of setting S.M.A.R.T goals is understanding past performance. Take the time to study your business’ past and understand the things you’ve done well and what needs improvement.

By defining clear objectives, every member of the organization can focus and work toward, the most important goals.