Key Performance Indicators (KPI)

missed_targetDo you continually miss the target?  Set goals you never reach?

Businesses measure gross profit, net profit, margins, costs, billable hours and a myriad of other things.  They set goals and focus more on the end result than the process to achieve them.

I was reminded of this recently.  I upgraded my Suunto heart rate monitor to an M5.  This particular model, and there are many to choose from, has a built in coach.  You tell this coach your age, minimum heart rate, maximum heart rate, fitness level and your fitness goals.  Based on this information, the monitor tells you how often to exercise, how hard to work out and the number of weeks remaining to reach your goal.  Every day, the monitor tells you whether to rest or workout.  If it is a rest day, it tells you the number of hours to rest.  If it is a workout day, it tells you how long and hard to workout and, in no uncertain terms – very hard for 35 minutes with your heart rate of 144 – 157 bpm.

I have only been using the M5 for a month but have already seen dramatic improvements.  This little wrist-mounted device got me thinking about the problem with most KPIs.  They measure the result.  They don’t measure the process necessary to reach it.  What needs to be done to increase net profit?  What needs to be done to win new accounts?  What needs to be done to increase billable hours?  What needs to be done to improve your fitness to the next level?  Suunto has figured this out.  The M5 tells you what needs to be done to reach your goal and measures performance along the way in daily, baby steps.

So, if you are establishing KPIs for your organization, define the result and, measure it but also be certain to identify the correct steps to be taken and, measure them too.  If you are not doing the right things, you will never achieve your goals.  But, if you habitually do the right things, you will exceed them.

I am certain you have heard the expression “practice makes perfect”.  Well, this isn’t the case.  If you continue to practice poor habits you will never increase sales, lower costs, increase profits, lower your golf score, cycle faster, lose weight, stop smoking, be comfortable speaking to a group or any other activity you want, or need, to excel in.  To improve, you need to get out of your comfort zone.  And, to do that you may need a coach or mentor to show you the way; an independent, object and experienced pair of eyes to push and cajole you.  Don’t be afraid to ask for help.

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One thought on “Key Performance Indicators (KPI)

  1. Pingback: Key Performance Indicators (KPI) | Kenneth Carnesi

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