Business Metrics

Practical Tips to Set Business-Oriented KPIs

Metrics are tools that lead projects to successful outcomes, promote continuous improvement, and enable strategic decision-making. KPIs must manage your organizations’ performance. However, if you do not have a rigorous process for setting KPIs, then there is a good chance you will experience problems. In this article at Key Performance Indicators, David Parmenter shares some golden rules for designing meaningful measures.

How to Set Meaningful KPIs

Be Clear About What a KPI Must Measure

If you want your KPIs or performance measures to be meaningful, you must have a thorough understanding of what ‘meaningful’ means to you. Often, business leaders confuse the following steps with performance measures:

  • Positive participant satisfaction surveys
  • Employee productivity
  • Implementation of new recruitment system

These measures are not clear and quantitative. Meaningful KPIs or performance measures must have a specific definition.

Evaluate Your Existing Performance Measures

Evaluate your existing KPIs so that you can keep the good ones and eliminate the bad. Set up an evaluation framework that contains ‘criteria for excellence’ KPIs. Gather your existing measures into your evaluation framework and audit each one to ensure that it has essential details that every measure needs.

Your Goals Must Be Measurable

Meaningful performance measures start with measurable goals. This means that your goals must be clear and specific enough. “Focusing on an exception is better than having to measure everything,” says Parmenter. Additionally, metrics must be easily understood and broadly accepted by stakeholders.

Use Deliberate Technique

To develop relevant performance measures that focus on your goals, you must be more deliberate. Design your KPIs around the action that you want to stimulate.

It is worth noting that there are no absolute ‘right’ metrics for every product/service you develop. What is ‘right’ is always dependent on the business goal and your strategic vision. To read the original article, click on

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