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The Art and Science of KPIs

By Phil Holberton

Every business leader needs to organize a set of KPIs. These KPIs have two purposes:

  1. To track the progress of a business.
  2. To motivate the organization to stretch and achieve its maximum performance.
KPI Capture

Click to view Phil’s March 2016 webinar on linking performance management to KPIs.

Where Do You Start?
Begin with a few KPIs — five is a good number. Choose KPIs that drive financial results; those KPIs that can measure the performance of the team or company. KPIs need to measure critical activities and the effectiveness of those activities, such as customer retention rate or average order size. Choose those KPIs that you can frequently measure, whether it’s weekly, daily or monthly. Assign responsibility for those KPIs — someone on your team needs to take ownership.

The Technical Aspects
Select KPIs that you can calculate easily. On the surface, everyone should be able to understand them. The top KPIs are those that indicate if individuals are doing their job, and can motivate them to change their behavior and influence the results. Spending is an easy KPI to use — am I under/over budget? Another is sales — can I do something to create improvement in the sales results? Can I make one more sales call or go that extra mile for a customer that results in incremental business?

The Emotional Impact
Psychologically, employees will look at KPIs as their individual report card – how did I do? The trick for the leadership team is to develop and use KPIs to help motivate its employees, not use them as a demotivator. If KPIs are used to discipline an individual, they will fail and not be supported by the rank and file. Use KPIs as a way to measure your progress and as a coaching tool to attain even more effectiveness from the organization.

Identifying the right KPIs is not easy – yet it can be very simple to organize a few KPIs that everyone can wrap their mind around and support. Why is it not easy? Because we have many choices. If you ask ten employees, you may get ten different lists of KPIs. If we step back, I can safely say there could be hundreds of KPIs, each of them having a precise significance yet can be distracting if used only by itself. In this case, the saying “Less is More” prevails.

KPIs, when well established, can be a system that allows for continuous improvement, allowing you to refine your business processes over time, become more efficient and continue to drive overall financial and employee performance. Use KPIs as a means to view the glass as half full, not as half empty and bringing the best out of your employees. Everyone will feel better about themselves.

Ask yourself, am I a leader?

Phil Holberton is the founder of Holberton Group Inc. – Speaking of Leadership, a business advisory firm specializing in strategic, organizational and executive coaching. He also teaches courses in the Project and Program Management and Strategic Analytics programs at Brandeis University Graduate Professional Studies.

From Registered Nurse to Informatics Analyst

Theresa Harrigan is a graduate from Brandeis Graduate Professional Studies Master of Science in Health and Medical Informatics. She is currently an Informatics Business Analyst for EPIC implementation at Massachusetts General Hospital.

I am atheresa blog photo registered nurse and have worked in health care for more than two decades. If you had asked me 10 years ago if I would be furthering my education, I would likely have said no.  My family and professional life was simply too demanding and I could not imagine myself finding the time to attend classes.  Fast forward a few years and you will find me celebrating the completion of my master’s degree from Brandeis in Health and Medical Informatics.   The online-learning program at Brandeis provided me with the opportunity to expand my knowledge and understanding of health care relative to the application of technology solutions and opened new doors for me. I was able connect with and learn from experienced leaders in the industry in the industry as well as with other students from a wide variety of professional backgrounds and from all over the world. While a student at Brandeis, I discovered new opportunities and pathways for professional growth that I never realized existed.

My professional work continues to evolve and I have become involved in promoting technology solutions as an informatics analyst  aMedizint Massachusetts General Hospital. My mission is to simplify health care for both providers and patients.  Because of my educational experience and the knowledge gained, I believe I will be able to make a direct contribution to improving patient care outcomes and the delivery of health care.

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