Can you reach a destination if you don’t know where you’re going?
Of course not.
You need to know where you want to be if you want to define your path clearly and use it efficiently.
Well, the same goes for your KPIs. To track and analyze them properly, you need to identify the most important goals for your business, describe them as accurately as possible, and make a plan on how you’re going to measure if you’ve been successful.
That’s where KPIs step in. If you need help with defining your business KPIs, this article will help you do just that.
Defining Your KPIs Using SMART Criteria
Have you heard of SMART goals?
It’s a popular technique of setting goals, which gives you a more precise and clear understanding of what you want to achieve and how to do it.
The same strategy can help you define your KPIs better and track your success more efficiently.
Take a look at this example.
When you say you want to publish more blog posts, it’s not the same as saying, “I want to publish two blog posts a week for three months and see how it affects my website traffic.” The second goal is concrete, while in the first case, you could publish one blog post more than what you used to publish, and you could say that your goal is achieved.
However, it probably wouldn’t change anything on your website.
That’s why SMART goals work so well, and you can copy the same technique to define your KPIs better to know what you’re doing, when you’re doing it, and why you’re doing it.
So, what does SMART stand for in this case?
1. Specific
The more specific your KPIs are, the better. Ask yourself - is your goal specific enough so everyone on your team knows exactly what they need to do?
2. Measurable
You won’t know if you’ve fulfilled your goals if you can’t measure the results. Your KPIs should be something you can track and measure.
3. Assignable
When it comes to KPIs, they should be something you can assign to an employee or a team. Everyone should have a plan of activities that will lead them towards the goal.
4. Realistic
Ensure that your KPIs are realistic. Can you and your team really achieve the goal you’ve set?
5. Time-bound
To measure how successful you are at achieving your goals, you need to set a timeframe in which you want to achieve them. If you want to publish more blog posts, you need to define in which time period you want to do it.
What KPIs Do You Define First?
When you set your business KPIs this way, you can easily determine if you’ve been successful or not. But which KPIs should you define first?
Most companies define overall business goals first. They determine what KPIs they should track so that they’re able to explain their success at the end of the month, year, or other time range. These are also called high-level goals.
Then, they define specific goals for each department, which will contribute to the overall objectives the company has set.
Finally, goals are assigned to teams and individuals so they can define their own KPIs and create an actionable strategy to achieve them.
As you go defining your business goals, you can also identify your KPIs.
Defining Your Success
By identifying your key performance indicators and defining them, you can easily determine if something needs to be changed in your business strategy.
In the same way, each of your teams will know exactly what’s right in their game plan and what could use improvements.
Defining your KPIs using the SMART technique gives you a clear picture of what you need to do, helps your team stay motivated, and discover the right tools and tactics to achieve any business goals and targets.