You track what you want to improve.
I get a lot of questions around what KPIs to track. KPIs, or key performance indicators, are the things that you track in your business to know where things are, where things have been, and what is coming. Yet CEOs always want to know what the most important things to track are and how far to go with tracking.
KPIs Are Simply What You Want to Improve
So why is the question being asked when the concept is so simple? I think it is because leaders worry about:
- Tracking too many things
- Not knowing when data is useless versus meaningful
- Looking like a micromanagement culture
- Not correlating things that are tracked with things that really matter
So my simpler answer is “Let’s start tracking the things that you want to improve.”
Imagine that you started on a diet. You were fully committed to eating right, working out, and sticking to a plan. In order to accomplish this you would have to track only one thing, but you could track many things.
First, and most important, you would step on the scale and know your weight. You would take this measurement each morning and see where you were. Your goal was to improve your weight, so that is the first thing that you would track.
But let’s say that your weight went up each day for a week. You wouldn’t be improving. BUT, tracking that single metric would drive some different behavior, wouldn’t it? You would question what you were eating each day. You would question whether or not the workout was the right one. Because you were committed to working on weight, and tracking it, it would force you to look at your actions and make some new decisions. You now might add calorie tracking, tracking calories burned on workouts, etc., to see why you weren’t losing weight. But that tracking might only be necessary to look at if something went wrong or to troubleshoot what wasn't going right.
If you had lost weight in the first week, and it was amount you expected to lose, would you start tracking new stuff? Probably not. The scale is enough.
Tracking Improvement with performetrics
We call metrics that are tracking improvement or performance Performetrics. Performetrics are KPI’s that measure what is expected to be happening or what needs to be improved. Improvement sometimes happens organically through tracking, and sometimes it needs more metrics to tell the story of what is really going on.
As a rule, Performetrics should be metrics that are tracked around key business objectives, key role objectives, and goals that are set for the business. But they must be tracked on a regular basis so that trends can be seen and to know what is normal and abnormal.
Are you tracking the things that really matter?
Too many things that don’t tell you anything?
And things that you want to improve?
If what you are tracking does not align with your objectives or does not give you data you can use to change behavior, it is time to look at adding those things to your dashboard.
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