Some companies are forced to establish new KPIs. Others have to completely re-think their KPI strategy. Whether you are in that situation or just want to push your KPIs to the next level — here are my top 5 best practices to improve your KPIs.
A Mashup Of My Most Essential Tips!
You can consider the below as a mashup of best practices from previous blog posts. Since I’ve written many posts about improving, tuning, and enhancing key performance indicators, I collected the most-essential best practices with this blog post.
Best Practice #1 Bring Your KPIs To The Smartphone
This had been one of my most important tips, even before the Coronacrisis rolled over the globe. If you are still relying on KPI solutions that a) don’t offer mobile access to your KPIs or b) do not provide a perfect user experience on smartphones, you should start acting now.
And bringing your KPIs to the smartphone does not mean accessing them with your smartphone browser. This best practice defines mobile availability as dedicated and seamlessly integrated apps. KPI apps that allow swift and easy access to all relevant information.
If you want to know more about why mobile usage of key performance indicators is super-essential, and a best practice you have to focus on you should read this blog post.
Best Practice #2: Think Your KPIs Dynamically
A KPI best practice I’ve started to promote at the end of 2019 (see here). With the mentioned post, I described the relevance of dynamic KPIs in today’s rapidly changing world. Dashboards with a fixed set of KPIs are just no longer state-of-the-art. On the contrary, you have to set up solutions and processes that allow you to adapt new KPIs and replace or adjust existing ones swiftly.
The current pandemic powerfully underscores the relevance of this best practice. From one day to the other current KPIs are no longer relevant (at least temporarily), and a whole bunch of new KPIs is required to assess the situation.
So, you should definitely start thinking of key performance indicators dynamically.
Best Practice #3: Discover Smart KPIs
Probably one of the hottest new concepts when it comes to KPIs. Simultaneously, the most important best practice. The idea behind smart key performance indicators is to not only calculate 10, 15, or 20 different KPIs but to calculate thousands of KPIs automatically.
How to do that?
- Apply all possible dimensions to a KPI
- Compare the KPI with a similar KPI of the previous day, week, month.
- Compare the KPI with average values, targets, etc.
- Put the KPIs in context with other KPIs
By doing so, you quickly end up with hundreds of different KPIs. But why do I call them smart? The “smartness” starts when it comes to providing the KPIs to your users. Instead of showing all hundreds and thousands of KPIs to your users, you only show the essential one. Therefore, you’re not only providing KPIs but smart knowledge that drives new insights.
Best Practice #4 Mix Your KPIs
Providing an unmatchable situational awareness and source for insights is always about the perfect mixture of KPIs. Similar to any other product, the composition of its ingredients is essential. My piece of advice in this context is to mix KPIs.
If you ask how: The 60-30-10 approach is the ultimate KPI best practice in that context.
60% of your dashboard should contain so-called Evergreen KPIs. Evergreen KPIs are the ones that have been around for centuries and will play a significant role in the future.
30% of your KPIs should concentrate on dynamic/temporary KPIs. These are the KPIs that are important for a certain period, projects, or specific circumstances.
10% of your KPIs should focus on new aspects. These are your trial-and-error KPIs. You can use them to a) test if they support your staff or b) test if a particular topic is relevant.
Best Practice #5: Keep Your KPIs Minimalistic!
The last KPI best practice actually is the fundament for everything.
I’ve written tons of posts about how to set up and design KPIs. Still, this is done wrong so very often. Don’t over-engineer or overthink your KPIs. Keep them straightforward in both their definition/calculation and design. Having complex KPIs that no one understands or a design that no one understands is the absolute killer.
Although this KPI best practice sounds super-trivial, it turned out that it is the most complex.