BenchmarkingBusiness MetricsKPIs

How to Choose KPIs that Reflect Strategic Priorities

If you are managing a team, then you have heard of key performance indicators (KPIs). A good KPI acts as a compass that indicates if you are taking the right path towards achieving your organizational goals. However, there are thousands of KPIs to choose from. If you choose the wrong one, you will measure something that does not align with your goals. How should you select the right KPIs? In this article at, the author shares some ways to develop and set performance measures.

A Guide to Choosing & Tracking KPIs

Be Clear

You must have a solid understanding of what meaningful KPIs denote before developing performance measures. Your organization may have many moving parts that are integral to its operations and performance. It is undoubtedly challenging to track everything going on internally. Remember, not all measures are important enough to track. Therefore, choose a few impactful metrics for each of your objectives to help your employees achieve them.

Set Targets

“Describing desired performance levels and determining how data is interpreted is as important as selecting the measure,” says the author. This defines how good and bad a performance is and how the data is used.

KPIs Must be Effective

The selected KPIs must have some characteristics that signify their effectiveness. Ask the following questions about each KPI you are considering:

  • Can this metric drive/influence change, or is it out of our control?
  • Does this KPI connect to the organization’s objective and strategy?
  • Can these KPIs be measured in a timely and accurate manner?
  • Will the metrics be relevant in the future?

If your answer is ‘no’ to these questions, you must either alter your KPIs or replace them.

Hold Individuals Accountable for Tracking Metrics

Business leaders must analyze the results, collect the data in context, and explain whether performance is good or bad and why. The individual responsible for the metric must be able to influence the resources dedicated to improving the measurement.

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