How to define the most important KPIs for your project?

It is one thing to have data and metrics, and quite another to have identified the “Key Performance Indicators” (KPIs) that tell you when your business is doing well (or not).

Monitoring your company’s performance is critical, but focusing on the wrong metrics can be detrimental (you spend time and money tracking data that doesn’t add value).

So, how to choose the KPI’s?

• Make sure your KPIs accurately measure your company’s objectives. If you are not sure what the objectives are, think about how your products or services benefit your business and why you invest in them.
• Make your objectives measurable. The hard part is setting measurable objectives that are realistic, especially in the case of new products.
• Use ratios and ranges. This way, if the target turns out to be too ambitious, you adjust the ratio or range to fit your goal.
• Avoid measuring what does not add value and only makes your product look good. Remember that the objective is not to pat yourself on the back but to identify what is going right or wrong in your company.
• Don’t try to measure everything. Identify what is most relevant.
• Use quantitative and qualitative KPIs. Combining both gives you a balanced view of product evolution.
• Use lagging and leading indicators. They will help you forecast whether you are likely to meet your objectives in the future.
• Go beyond financial and customer indicators. Complement them with relevant product, process and people indicators.
• Take advantage of trends. Trends help you better understand what is happening and make the right decisions.
• Use product scorecards. They should collect relevant data and analyze it periodically.

We have created a guide with the 12+1 KPIs that all Business Managers should know about their business, ask us and we will share it with you!