Checklist of the Criteria for Excellent Measuresby Stacey Barr |
Assess if your KPIs, metrics and performance measures are good enough with this checklist of criteria for excellent measures, and free online diagnostic.
Not everyone wants to (or indeed needs to) throw out their existing measures just because they aren’t perfect. To make sure you don’t throw the baby out with the bathwater, evaluate your measures using the following simple checklist and you might be surprised at the ideas you get to improve your not-quite-right measures, and cast a keener spotlight on those measures that really should be thrown away.
Oh, and a word of warning: No list of criteria is ever complete or ever totally correct. So as you read these and apply them, tune into the purpose of the criteria if the prescription just doesn’t fit.
1. Does it have clear link to strategy?
For your measure to be excellent, it must have a clear line of sight to your business direction – to your strategic goals or priorities. If you are measuring something, and improving it won’t make any significant contribution to achieving your strategy or goals, do you really need to measure it?
Tip: Design your measures at the same time you formulate your goals.
2. Is it owned by someone?
Unless your measure is officially owned by someone – not a department, not a team, but a person – it’s super likely that it isn’t being used to make performance improve. It may not even be properly reported. Measures need an owner to make sure it is reported and used for the benefit of the business.
Tip: Find a person who has enough authority to respond to the measure.
3. Can it be brought to life?
Tip: Define the details of bringing your measure to life to test its viability.
4. Are you able to track it regularly over time?
Before and after measures (which is what annual measures usually end up being) don’t give enough feedback to manage improvement efforts. Your measure must be tracked regularly enough (such as monthly or weekly) to give you clues about whether your improvement efforts are working, before it’s too late.
5. Does it give you more value than it costs?
Measurement doesn’t happen for free. But you need to be confident that the costs associated with its design, data collection and reporting are less than the benefits it brings to your business. And the main benefit is that measurement gives us leverage to achieve goals sooner, and with less effort. This happens through decision making and the resulting improvements you get for your bottom line or your stakeholder value.
Tip: Remove waste and duplication from data collection and reporting, e.g. use sampling instead of measuring it all.
6. Do users understand it?
If your measure is a convoluted index of other measures, or it’s calculation is difficult to explain in everyday language, it can make using it too daunting a job. Involving users in the design of the measure is a great step. And for those who cannot be involved directly, invite them to a Measure Gallery to learn about the measures they’ll use and suggest ways to improve them.
7. Does it inspire the right behaviour?
If your measure is not encouraging people to choose performance-improving behaviour over sweep-it-under-the-rug behaviour, it’s a candidate for throwing out. The measures that are the most potent in improving business performance are those that make it obvious which are the right actions to take to get better performance results.
TAKE THE KPI ASSESSMENT
Take the following KPI assessment to find out how your organisation scores across the full set of 13 KPI excellence criteria. You’ll get:
- a score out of 100 for your organisation’s KPI excellence
- a summary at the end of the diagnostic with specific resources to help you improve your score (and of course, improve your KPIs)
- a link to download the template of 13 KPI excellence criteria, to use to evaluate individual KPIs in your organisation
NOTE: When the diagnostic report is produced after you take the KPI assessment, make sure to take a copy of all the hyperlinks in the feedback recommended for you, and print the diagnostic report before exiting.
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