You know the saying that the only certainties in life are death and taxes? I’d like to add one more item to that list — scrambling to report on metrics at the end of every quarter. Well, that’s why we have our trusty KPIs.
We have entered into the age of data-driven or data-informed decision making, and I’ll be the first to say that it’s awesome. Using analytics to run our businesses has become so ingrained in our professional cultures and management strategies that it usually comes all the way down from the C-Suite, and I’ll be the first to say that makes it doubly awesome.
These KPIs, metrics, reports, and leading indicators help teams prove value, identify gaps, highlight successes, mitigate risks, aid in determining which tactics to continue and find areas deserving of scrutiny, and all that jazz.
But the problem with this approach, while it’s great in theory, often comes in its implementation.
Implementation of KPIs
Metrics are measured monthly, quarterly, or even yearly and are not given a second thought until the day they are due. So instead of being used to guide day-to-day decisions and align regular activity to these goals and metrics; every three months, analysts are asked to report on these metrics. This results in business owners struggling to drink from the fire hose and make sense of them.
Oftentimes, KPI reporting can become the most stressful part of the quarter for both analysts and their stakeholders. Instead of being a goal post that they are tracking against throughout the quarter, the collection of metrics becomes a sort of periodic report card. This leads to misunderstandings about something that should be familiar but is still foreign, questions about how the metric is calculated, surprises at poor performance, defensiveness, and a general lack of adoption.
But this shouldn’t be the case! Incorporating KPIs into the daily lives of decision-makers to avoid the quarter-end reporting stress can be done in four simple ways. Here’s how:
Give your users the ability to get to the metrics themselves quickly and before the end of the quarter (Qlik Sense Desktop or Qlik Sense Cloud, for example, …just sayin’).
Push something into their inbox vs. them pulling it out of you at the end of the quarter. Almost every BI tool can do this today (Qlik NPrinting, anyone?).
Make the KPI applicable to them in a daily way
Change the nature of the metric into a more bite-sized portion. If you have a quarterly number, create a daily or weekly version when possible so that it can be looked at every day.
Get involved in the planning stage
When stakeholders are engaged in planning, many times they don’t have KPIs in mind; they’re thinking about budget, capacity, headcount, and activities. Introducing key performance metrics at initial stages can lead to changes in how supporting tools and systems are set up, target setting, and potentially what is and what is not executed.
A great example of this is financial budgeting. Everyone is familiar with hockey-stick spending, which spikes at the end of the year or at the end of each quarter when crunch time kicks in and the “use it or lose it next year” message comes down. The classic approach is to set a budget vs. actual target percentage.
However, that can still lead to spikes if it isn’t done correctly. To avoid this, take it one step further and create smaller incremental benchmarks such as 25% after month one, 50% after month two, and so on. This more manageable cadence will dramatically improve accountability and relevance to a metric that you can use every month rather than at the end of the year.
Reporting doesn’t have to be intimidating. Together, we can end the KPI stress. Together, we can make analytics great again!