Module 4: Key Performance Indicators

What is a KPI and why is it important?

Key Performance Indicators (KPIs) are statistics or data points that are used to measure your organizations progress against its vision or strategy and serve as indicators of success.

 

KPI’s are important to your organizational strategy because they help tell your story, demonstrate your impact, and show progress toward achieving your goals. KPI’s keep you stay focused and provide a map to your organization’s vision, placing emphasis on the needle you are aiming to move.

 

This section provides guidance on how to identify key performance indicators for your area. Keep the following steps in mind when setting KPIs.

  • Prioritize – KPIs should emphasize what your organization cares about most and directly align with your organization’s strategic goals, outcomes, vision, or mission. If it does not connect to one of these guiding frameworks or you cannot easily provide a rationale for focusing on it, then you should probably reconsider its position as a KPI. You should not select KPIs that your department does not have a meaningful impact on.
  • Build Commitment – KPIs should be clearly understood and recognized by the members of your organization. This sustains a shared commitment to the goals behind your KPI and maintains organizational momentum.
  • Select Measure – Determine the depth of your indicator. KPI’s range from progress indicators or operational counts, to change measures. Progress indicators, often illustrated with a percentage, are helpful for demonstrating how close you are to achieving your desired outcome. Whereas, operational counts reflect broad numbers or raw data, and change measures drive the direction of your goals.
  • Define Target – Setting a target for your KPI provides your organization a destination to reach. Targets should be both numerically and time bound. How much will you achieve and by when? Your target measure should clearly demonstrate your desired outcome.
  • Identify Data Source – When setting KPIs, be sure to clearly define your methodology; specifically identify what you are going to measure, how you are going to measure it, and when. Data sources should be readily accessible for your designated KPIs.
  • Determine Frequency – KPIs should be measured consistently overtime. Building on the previous point, when setting KPIs, you should identify how often you will track this measure and adhere to it. Will it be measured daily, quarterly, annually, etc.? How does the frequency of reporting align with your organization’s regular reporting cycle? Also, consider the time importance of the data and how often the data changes; this will help you ensure that you are not over or under reporting your progress on the indicator.
  • Reassess Periodically – Do your organization’s priorities still align with your KPIs? You may need to periodically adjust and realign your priorities or your KPIs for maximum performance.

 

Identifying your organization’s KPIs is an important component to strategic planning or strategic management. Ensuring a balanced set of metrics will help you track the progress of organization, gage the health of organization, and drive your organization forward.

KPI Resources

For supplemental information on key performance indicators, watch this video Links to an external site.by OnStrategy Links to an external site.. 

 

For examples of common Key Performance Indicators by functional area, check out this KPI resource by CampusLabs Links to an external site.: 

 

Explore some examples from select institutions on the variety of KPIs and how they can be used: