What problems do you have with key performance indicators (KPIs)? Are they actionable or not? How do you measure them?
Today, I’m sharing a #1 rated session that I presented at the Real Business Intelligence conference at MIT back in 2017. It is called “Secrets to building actionable KPIs”. Specifically, I discuss three of the more well-known and commonly used methods: SMART (Specific, Measurable, Achievable, Relevant, Timebound) Goals, WIGs (Wildly Important Goals), and OKRs (Objectives and Key Results).
"(Eliminate) the need for people to interpret what a KPI was meant for.” [18:44]
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3 Knowledge Bombs
- Mico on Number of KPIs: Track and focus on 3-5, but no more than 10.
- Mico on Actionable vs. Non-Actionable KPIs: Changing KPI name fixes 95% of problems with a lack of action.
- Mico on KPI Methods: Most commonly used are SMART, WIGs, and OKRs.
In this episode, you'll learn:
- [02:19] - Are KPIs and metrics the same? Do you track KPIs? Metrics? Core competencies?
- [02:44] - Key Quote: Living in KPI land, there’s a lot of measurements, but you discover that not all measurements are created equal. - Mico Yuk
- [04:02] - KPI Problem #1: Too many KPIs; focus on tracking 3-5, no more than 10.
- [06:11] - Key Quote: You can make things pretty...garbage in, garbage out. A lot of pretty garbage is what we were creating for these big companies. - Mico Yuk
- [08:24] - AHA Moment with Warren Buffett’s 5/25 Rule: Write 25 goals, select 5 most important, and avoid the rest until achieving them.
- [15:21] - KPI Problem #2: All KPIs are not created equal. Actionable ones create results, non-actionable ones create noise.
- [16:35] - 5 Traits of Non-actionable KPIs: Non-descriptive name, no clear action, lacks context, use is confusing to users, and visualization is difficult.
- [17:49] - Key Quote: Simply changing the name of your KPI will fix 95% of problems with the lack of action in KPI. - Mico Yuk
- [18:44] - Key Quote: (Eliminate) the need for people to interpret what a KPI was meant for. - Mico Yuk
- [19:05] - AHA Moment: People are struggling to make pretty visualization due to goals, KPIs and metrics with no action.
- [22:32] - WIGS: 4-step process involves scoreboard, act on actions, and accountability.
- [26:15] - OKRs: Where do you need to go? How will you get there? What to do then?
- [27:34] - SMART Goals: What, how much, when (WHW)?
- [37:04] - Key Take Home Points:
- Choose one methodology; SMART is easiest to understand, but OKRs are most actionable.
- Turn non-actionable into actionable KPIs.
- Avoid KPI overload.
- KPIs should be easy to visualize; don’t leave them open to interpretation and confusion.
- [48:07] - Key Quote: Marketing, marketing, marketing - Mico Yuk
- [48:35] - Which station do you listen to? What’s in it for me (WWIFM), or What’s in it for them (WWIFT)?
- Reminder: Register today for early bird discount to our BI Data Storytelling Accelerator - 3-day Live workshop on January 28-30, 2020!
- Right-click here and save-as to download this episode to your computer.
“Living in KPI land, there’s a lot of measurements, but you discover that not all measurements are created equal.” [02:44]
Links and Resources mentioned in this episode:
- Where to find free KPIs online: KPI Library, and KPI Klipfolio, KPI Mega Library
- But the Chart/Annotation PDF - International Institute of Business Analysis (IIBA)
- Register today for the January 2020 workshop!
- Download our free BIDF KPI Blueprint
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