Key performance indicators, or KPIs, are a useful to way to determine the effectiveness of your team or company in its efforts to meet performance objectives. When establishing KPIs, it's important to understand exactly what would indicate success for your team, and whether or not it is measurable. Here are four KPI Metrics Measurement Fundamentals to consider.
Is it specific to your team and to your stakeholders?
A useful KPI targets a goal that your team has control over, and an outcome that your stakeholders desire. If you're managing a quality control laboratory, you likely wouldn't want to set a KPI dependent on the overall company's ROI. This is outside of your team's direct control, and it doesn't apply directly to your primary stakeholders.
Instead, ask yourself, what indicates my team is performing successfully, and what do our stakeholders care about. In a quality control laboratory, this might be number of tests run per day, or perhaps target turnaround times for each sample received.
Does it motivate or discourage?
Think of a KPI as a realistic stretch goal, not unrealistic perfection.
Improving customer satisfaction by 3% is likely doable. Requiring turnaround times under 24 hours for a 48 hour test is not.
What you set as a KPI directly impacts your team members and your stakeholders. It's up to you to set realistic, meaningful targets, and to frame it in a way that motivates instead of discourages.
How will the KPI be measured?
A KPI is only useful if there is a system in place to measure it. If you're targeting customer satisfaction, are you already sending out customer surveys? And do you have a baseline number to work from?
Or, if you're interested in setting turnaround times as your KPI, how will this be measured? Is there already a software system in place? Do you, your team, and your customers have a common understanding of what a satisfactory turnaround time would be? What will the dashboard for the KPI look like, and how will results be communicated?
What do you hope to learn or improve by measuring this KPI?
KPIs are not only an opportunity to determine how effective your team is, they're also a way to determine opportunities for improvement and growth. When setting a KPI, ask yourself what might need to change in order to succeed, and what needs to change if you're unsuccessful. These could be things like processes, improvements in communication, or streamlining sample processing. Who will make these changes, and when?
Selecting and measuring effective KPIs is an important way to ensure team success and client satisfaction. Please contact us to find out how we can help you track your targets. We look forward to hearing from you!