In our world today, we are constantly bombarded with metrics and analytics – from sleep scores to screen time to Spotify wrapped, numbers are all around us. As organizational leaders, this challenge can be even more pronounced. Sifting through reams of data to identify meaningful patterns is challenging and time-intensive, oftentimes distracting from other mission-critical work. Operating based only on anecdotes and feelings, however, can lead to poor decision-making and organizational mismanagement. This proliferation of available data prompts an important question – what and how do good organizations measure? This guide will walk through a couple of key do’s and don’t’s when it comes to setting, tracking, and making decisions based on your organization’s metrics.
Do identify key performance indicators
With so much data swirling around, it’s critical to identify a set of key performance indicators (KPIs) – a limited set of quantifiable measures that are used to evaluate your organization’s performance in achieving your goals. Your list of KPIs should be relatively short and reflect the most important objectives that your organization hopes to achieve. KPIs should be SMART, meaning they are:
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
Looking through your KPIs should give an observer a clear picture of your organization’s success, so be thoughtful in choosing the metrics that most meaningfully connect to the work you do. Selecting 3-6 strong KPIs will give you a strong understanding of your organization’s health and set you up to make strong decisions going forward.
Do regularly update your progress and use your progress to prompt strategic discussions
Your KPIs should not just sit on a shelf after you’ve created them – they should be a tool that helps you better understand your organization’s performance and make better decisions. Use a dashboard (which can range from a simple spreadsheet to a complex visualization as outlined here) to keep your KPIs in one place, and assign the responsibility of updating your progress towards your KPIs to a specific team member. On a regular basis (monthly or quarterly typically work best), come together with your organization’s leadership team to review your progress. Use the following questions to guide your conversation:
- Are we on track to reach our KPI target? Why or why not?
- What circumstances may have shifted that impacted our ability to reach our target?
- What shifts or modifications does our team need to make to reach this target?
- What additional support may the team require (external or internal stakeholders or additional resources/tools) to reach our goals?
Regularly updating and checking back against your KPI progress will give your team more visibility into how effectively your organization is carrying out its primary goals, and will allow you as a leader to make more informed decisions.
Do focus on outcomes, not just outputs
Focusing on outcomes rather than outputs is essential for purpose-driven organizations because outcomes measure the actual impact of your efforts. Outputs, like the number of workshops held or reports published, typically only indicate activity. Outcomes, however, reflect the meaningful change resulting from those activities, such as improved community health or increased literacy rates. By prioritizing outcomes instead of outputs, organizations ensure that their actions align with strategic goals and truly advance their mission. This approach enables better resource allocation and fosters continuous improvement by highlighting what works and what doesn’t. Ultimately, focusing on outcomes drives more significant, transformative, and lasting impact.
Don’t set unrealistic targets
When developing your KPIs, avoid setting targets that are overly-aggressive or overly-conservative. Targets that are unrealistic on the high end can create unnecessary frustration and stress, and can have the adverse effect of decreased morale. Targets that are too conservative, however, can stifle growth or lead to untapped potential. Use benchmarking to understand how you’ve performed relative to that metric in the past, and set a growth target that is appropriate based on your organization’s unique needs and circumstances.
Don’t keep your metrics secret internally
Once you’ve set your KPIs, socialize them with your team. Sharing your key metrics and targets with your team results in the following benefits:
- Alignment and Buy-In: Sharing KPIs helps ensure that everyone in the organization understands the goals and how their work contributes to achieving them. This alignment fosters a sense of shared ownership and commitment among team members, as they see how their efforts directly impact the organization’s success.
- Enhanced Communication and Transparency: Socializing KPIs promotes open communication and transparency within the organization. Team members are informed about what is being measured and why, reducing ambiguity and fostering a culture of trust and openness.
- Improved Accountability and Performance: When team members are aware of the KPIs, they can be held accountable for their contributions toward achieving them. This awareness can drive performance improvements, as individuals understand the specific targets they need to meet and can monitor their progress.
- Collaboration and Teamwork: Socializing KPIs encourages collaboration and teamwork, as team members can identify opportunities to work together to achieve common goals. It fosters a sense of shared purpose and collective effort, enhancing the overall effectiveness of the organization.
- Feedback and Continuous Improvement: By discussing KPIs with the team, you can gather valuable feedback on their relevance, feasibility, and effectiveness. Team members may provide insights or suggestions for refining the KPIs or identifying potential issues, leading to continuous improvement in performance measurement and management.
- Motivation and Engagement: Clearly communicated KPIs can serve as a motivational tool, giving team members a clear understanding of what success looks like and inspiring them to strive towards those targets. Seeing progress and celebrating achievements related to KPIs can boost morale and engagement within the team.
Measurement doesn’t have to be scary and overwhelming- with these few key lessons in mind, you can use KPIs to elevate your organization to the next level and enhance the work you already do.
To learn more about how Trepwise can support your organization in reaching its goals for growth, reach out to us at https://trepwise.com/get-in-touch/.
