Targets & KPIs:
How to Align and Measure What Matters
About Targets & KPIs
Targets & KPIs is designed to provide high-quality insights into what your company’s most important numerical targets and key performance indicators (KPIs) should be. Targets & KPIs are used across the organization to set direction, goals, and focus.
It is important to have both targets and KPIs. The two work together. Think of Targets as outputs. They are the desired, measurable, quantifiable outcomes of the business. Targets are typically broken out by 3-year, 2-year, and 1-year milestones to achieve.
If Targets are outputs, then KPIs are inputs. As an example, if it is important to have satisfied customers, then what are the leading indicators that demonstrate that your customer service process is working well or showing early warning signs of trouble? Is it response time? Quality defects? Customer ratings? KPIs are tracked daily/weekly/monthly. Naturally, the better awareness and control your business has over its inputs, the better the outputs.
Here’s another way to think about Targets & KPIs. If you were driving a cross-country race, Targets would be the mile markers you want to reach by a certain date. KPIs would be the dials on your dashboard. Both are important to track, but the more you focus on the health of your KPIs or key inputs, the better and faster you will reach your Targets or desired destination.
Survey First, Decide Second.
The basic idea behind this approach to setting Targets & KPIs is to first survey your Leadership Team and other key influencers on what they believe the right set of Targets & KPIs should be for the next-stage strategy. The survey tool itself makes it extremely easy to use individual survey responses as inputs to create a single Targets & KPIs summary that captures the most important and quantifiable indicators across the entire business.
Does it seem a bit strange to you to ask your Leadership Team members and other key influencers to provide their inputs and perspectives into Targets & KPIs? After all, shouldn’t these kinds of metrics come from the top-down? No! Or, at least not at first. The three main advantages of surveying the team before aligning on a final set of Targets & KPIs are as follows.
Advantage 1: Holistic View
Targets & KPIs helps to create a holistic view of the entire business. What truly are the key drivers of operational efficiency? What about for sales growth? Or customer satisfaction? Getting different viewpoints on the table is essential to uncovering what truly matters.
Advantage 2: Better Accountability & Impact
Targets & KPIs allows the team to have a better understanding of the most important metrics for their peers. Accountability is not just being capable and working hard to accomplish results. It’s also about the impact we make on others. Targets & KPIs helps to quickly build shared consciousness across the team to discover what metrics are most important to their peers. If we understand why a given metric is important to our peers, this helps us to make a better impact on their outcomes.
Advantage 3: Close the Air Sandwich
Targets & KPIs helps to close the “air sandwich” that can occur between top-down goals and bottom-up execution. Getting different perspectives on the table in a structured way up front allows for a much more pointed discussion and understanding of what the final metrics should be, as well as how each member of the team can help to close the execution gap. It shifts the conversation away from “your metrics” to “our metrics.”
Assigning Accountabilities for Targets & KPIs
A best practice is to have one role accountable for each individual Target and KPI. If you find that you are assigning most accountabilities to just one or two roles, this could indicate that you either have a structural problem with collapsed and conflicting accountabilities assigned to one role, or that you need to broaden the scope of the final Targets & KPIs to have greater cross-functional visibility and impact.
Review Frequency for Targets & KPIs
Tracking how the business is performing against its Targets & KPIs should be done weekly as part of the Leadership Team dashboard review. Communicating to the entire company how the business is performing to date against its Targets & KPIs is an accountability of the CEO and should be done as part of his or her weekly and monthly strategic communications cadence.
Please note that this is a one-and-done survey. Meaning, the only reason you would repeat the Targets & KPIs survey would be if there were a material change in strategy that required a new set of Targets or KPIs. Otherwise, you will use your existing dashboard system to track your metrics and manage to plan. This tool brings tremendous insight and clarity but it is not an ongoing management dashboard.
Become Your Company’s Sponsor
Since this is a new tool, you’ll need to take it for a test drive to really understand it and see if it’s right for your organization. Register for the free 30-day trial below. After you register, we recommend that you complete the Targets & KPIs survey yourself first. Then close it to view the report. You can edit the answers at any time. Once you’re comfortable and confident in the basic system, re-open the survey, or create a new one, and send it to selected Leadership Team members for them to complete as well. You’ll receive their answers and be able to easily select the best ones or edit them to include in the final Targets & KPIs document.
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