You want to establish actionable KPI targets that are tangible and immediately relevant. Aim too high with your targets, and you risk deflating your team before you start. Aim at a target that doesn’t exist today, and you’ve created noise without any signal.
Here’s a process for setting actionable KPI targets:
Review business objectives
A KPI is a metric with a target that is core to your business’s performance. Every business has objectives, which are typically goals in regards to revenue, customer success, marketing mindshare, and productivity.
Analyze your current performance
You can’t get from point A to point B without understanding point A, your starting point. Dig into the data, allow yourself time for discovery, and provide an honest reckoning of your performance. This will give you the basis of setting your KPI targets. By evaluating your current performance, you get a dose of reality. Nothing kills KPIs or motivation like impossible stretch goals!
Set short and long-term KPI targets
You’ve interrogated the data, and now know the truth behind your numbers. It’s time to start plotting your way forward and start by setting a long-term KPI target. This gives an overall vision to your strategy, and a goal to work backwards from. From here, you can start to figure out short term KPI targets. The real benefit of setting short term KPI targets is that it gives you almost immediate feedback on your processes and ability to execute. Unachievable objectives deflate teams and drain morale. KPI targets must motivate and reward hard work.
Review targets with your team
Success is not created in a vacuum. Leading businesses and growth experts are democratic in the way they rally their team. Data transparency is a success factor.
In other words, take your KPI targets to your team and review them in an open, honest environment. Encourage feedback and act on it. If you’re a sales director, and your frontline team is telling you that there’s no way they can hit your new targets, then you must listen to them.
We aspire to achieve KPI targets because we want to push ourselves to do better and improve. If the targets you’ve suggested instantly deflate your team, identify root causes. Are they lacking visibility into the processes that influence positive outcomes?
The journey towards achieving KPI targets will have you innovating and auditing current processes. You can be firm on your targets, yet still empathise with the challenges in execution. As a manager, your job is to remove obstacles.
Review progress and readjust
The business world would be much simpler if you could just set KPI targets and automagically achieve them. It’s not. Business is complex, and growth is challenging.
You need to continually evaluate your performance at regular intervals. A monthly reporting cadence is natural and an ideal starting point. It allows time for your projects to take hold and influence your numbers.
The key to it all is communication. Be bold in your transparency and you’ll be rewarded with input and contributions from unexpected places.
Part of communication is championing the continuous review of your KPI targets. Keeping a direct line of sight on your performance and talking about it openly helps everyone stay on track.