Anyone who knows me knows of my total and utter contempt for most KPIs – they are the devil’s spawn and most people who must use them feel the same. It is such a shame because along with my contempt for most KPIs, I love them when they are applied properly. And yet so few people apply them properly.
I recall the global charity that had 742 KPIs. I gave up trying to work with them.
I recall the agency where the staff ignored the KPIs despite every effort of the management team.
I recall the Operations Director who ceremoniously took his team to the car park to watch him set alight the KPI Manual before their very eyes.
What do good KPIs look like? How many? And what? And how often?
KPIs should be like the lights in an airplane cockpit. They tell you how high, how fast and how much fuel. All else is commentary.
You don’t need many of these measures.
Make sure you use lead or predictive measures as well as performance or historic measures. In fact, it is only the predictive ones that matter because you can influence them before it is too late.
Predictive measures are things that will determine your results e.g. the number of hours talking to clients or the number of initial meetings or the numbers of requests for proposals. All things being equal, they will predict your results.
Small departments might get away with three or four KPIs. For the whole business you might use a maximum of sixteen.
For the business I would use a maximum of four measures (mainly predictive) to cover each of four areas/functions of the business namely: finance, marketing and sales, operations, and people and culture. That’s an absolute total of 16.
Which KPIs for your business?
Well, that depends on your strategy. The whole point of KPIs is that it measures your progress in your business for achieving your strategy. No benchmark, one-size-fits-all standard agency KPI kit will do the job properly. I am afraid you will need to do a bit of the work yourself. What do you need to measure on a monthly basis that will give you a clear indication of how the agency is performing?
You need to look at your KPIs every month to fine-tune your activities so that you can achieve your targets and goals. I have worked in agencies small and large to put KPIs in place. Simple yet powerful. A gamechanger. A modest half-page list of core KPIs presented using a simple traffic light system will give a snapshot of overall and individual function performance. Then you can decide what to do next: sort the performance or change the budget!